Oman issues law for Special Economic Zones and Free Zones

On 7 April 2025, the Sultanate of Oman issued Royal Decree (“RD”) No. 38/2025 (“New Law”) promulgating the law for the Special Economic Zones (“SEZs”) and Free Zones (“FZs”), collectively referred to as “Zones”. The New Law replaces the law previously issued under RD 56/2002 for FZs and under RD 119/2011 for Duqm SEZ. The New Law introduces the legal and regulatory framework applicable to Zones operating under the supervision of the Public Authority for SEZs and FZs (“OPAZ”). The New Law was published in the official gazette on 13 April 2025 and is effective from the date of publication.

The New Law aims to enhance legal certainty, streamline licensing and administrative procedures. It enhances the competitiveness of Oman’s investment zones by providing a harmonized regime of incentives and protection to investors who have set up or intend to set up operations in the Zones.

The Executive Regulations (“ERs”) under the New Law is expected to be issued within one year of the issue of the New Law. The ERs will provide further guidance on operational implementation.

On 7 April 2025, the Sultanate of Oman issued Royal Decree (“RD”) No. 38/2025 (“New Law”) promulgating the law for the Special Economic Zones (“SEZs”) and Free Zones (“FZs”), collectively referred to as “Zones”. The New Law replaces the law previously issued under RD 56/2002 for FZs and under RD 119/2011 for Duqm SEZ. The New Law introduces the legal and regulatory framework applicable to Zones operating under the supervision of the Public Authority for SEZs and FZs (“OPAZ”). The New Law was published in the official gazette on 13 April 2025 and is effective from the date of publication.

The New Law aims to enhance legal certainty, streamline licensing and administrative procedures. It enhances the competitiveness of Oman’s investment zones by providing a harmonized regime of incentives and protection to investors who have set up or intend to set up operations in the Zones.

The Executive Regulations (“ERs”) under the New Law is expected to be issued within one year of the issue of the New Law. The ERs will provide further guidance on operational implementation.

RD 38/2025 introduces a framework that applies to SEZs and FZs, replacing RD 56/2002 along with any other legally contradicting provisions to the New Law.

With the issuance of the New Law, businesses operating or intending to set up their operations within SEZs or FZs should assess the potential impact of the New Law on their operations, investment strategy, and eligibility for incentives. It is also important to monitor the issuance of the ERs, which will clarify implementation timelines, transitional rules, and qualifying conditions in this regard.

KPMG has a dedicated team of experienced tax specialists based in Oman, supported by a wider regional network with deep expertise in SEZs and FZs regulations and tax advisory services. For a tailored discussion on how the New Law may impact your business, please reach out to your advisors at KPMG or the contacts mentioned below.