Oman issues Executive Regulations for Special Economic Zones and Free Zones Law

• Oman’s Executive Regulation for Special Economic Zones and Free Zones has applied since 21 September 2026 and covers licensing, incentives, compliance obligations and strategic investments.
• Qualifying enterprises may receive income tax exemptions for up to 30 years, but exempt businesses remain subject to applicable tax filing, record-keeping and other compliance obligations.
• Existing zone operators have six months from 21 September 2026 to align with the new regime and should separately review the VAT and customs treatment of goods entering, moving through or leaving a zone.

Extended article

Oman has implemented a new Executive Regulation governing its Special Economic Zones and Free Zones.

The Public Authority for Special Economic Zones and Free Zones issued Decision No. 81/2026, publishing the Executive Regulation of the Law of Special Economic Zones and Free Zones issued under Royal Decree No. 38/2025.

The regulation was published in Oman’s Official Gazette on 20 September 2026 and entered into force on 21 September 2026.

It establishes a detailed framework for:

• licensing;
• tax exemptions;
• strategic enterprise incentives;
• compliance obligations;
• land and real-estate arrangements; and
• the administration of businesses operating in the zones.

Income tax exemption

Enterprises and zone operators may apply through the one-stop shop for an exemption from income tax.

An approved exemption may initially apply for 10 years from the date on which the activity commences. For activities of a special nature, the exemption may be renewed for two additional periods of 10 years each, potentially providing an exemption for up to 30 years.

The exemption is not automatic. It depends on the nature of the activity, satisfaction of the statutory requirements and approval by the competent authorities.

Qualifying activities

The regulation identifies a broad range of potentially qualifying activities, including:

• petrochemicals, minerals and basic metals;
• renewable energy and green hydrogen;
• logistics and port handling;
• advanced technology;
• data centres and artificial intelligence;
• strategic infrastructure;
• food-security projects;
• pharmaceutical, medical and biotechnology activities;
• recycling projects;
• administrative offices;
• commercial representation; and
• import and export activities that add value to Oman’s economy.

Certain service providers may also qualify where their contract period is at least 15 months at the time of the exemption application.

The Authority’s Board of Directors may approve other activities that provide economic or strategic value.

Excluded sectors

The regulation excludes several sectors from the income tax exemption, including:

• banks and financial institutions;
• insurance and reinsurance businesses;
• telecommunications providers;
• contracting companies; and
• road and maritime transport businesses.

Companies should confirm the precise classification of their activities before incorporating an expected exemption into an investment decision or business case.

Compliance obligations continue

An exemption from income tax does not relieve an enterprise of its tax-compliance obligations.

An exempt entity may therefore still need to maintain registrations, submit returns or declarations, retain accounting and transaction records and respond to requests from the competent authorities.

The broader VAT and customs position must also be determined separately. A zone incentive under the new regulation does not automatically establish the VAT or customs treatment of:

• goods imported into Oman through the zone;
• supplies made within the zone;
• goods moved between the zone and mainland Oman;
• exports from the zone;
• services supplied to or from a zone business; or
• equipment and raw materials used by the enterprise.

Businesses should map the physical and legal movement of goods and identify when import VAT, customs duty or domestic VAT becomes due.

Strategic enterprises

An enterprise with an investment cost of at least OMR 10 million may be classified as a strategic enterprise if it satisfies one or more prescribed conditions relating to:

• technology transfer;
• local content;
• economic security; or
• development of exports outside Oman.

The Authority’s Board may waive the OMR 10 million investment threshold.

Subject to the applicable approvals, a strategic enterprise may receive additional incentives, including:

• relief from lease or usufruct consideration for land and real estate for up to 10 years;
• relief from Omanisation percentages for up to four years; and
• exemption from some or all applicable fees.

Transitional period

Enterprises already operating in Oman’s Special Economic Zones or Free Zones have six months from 21 September 2026 to align with the new requirements.

Existing incentives and exemptions granted under earlier legislation or agreements remain valid until their respective expiry dates. Nevertheless, existing operators should review whether their licences, activities and operational arrangements satisfy the new regulatory framework.

The transitional review should cover:

1. The activities stated in the enterprise’s licence.
2. Eligibility for existing and future incentives.
3. Compliance with exemption conditions.
4. Import and export procedures.
5. Customs classification and origin documentation.
6. Inventory and stock records.
7. VAT treatment of supplies and movements.
8. Agreements with zone authorities, logistics providers and customers.

The introduction of the new framework strengthens the investment proposition of Oman’s zones, but access to the incentives will depend on formal approval and ongoing compliance. Businesses should avoid treating economic-zone status as a blanket exemption from Oman’s wider tax and customs rules.

Source: Decision No. 81/2026 Issuing the Executive Regulation of the Law of Special Economic Zones and Free Zones