While Oman has had free zones (such as Sohar Free Zone) and special economic zones (such as the Special Economic Zone in Duqm) for decades, these free zones were primarily designated to facilitate trading in physical goods, and as such focused on providing customs and tax exemptions and remained subject to standard Omani laws such as the Labour Law, the Commercial Companies Law, and all other laws that govern the way a business operates in Oman. IFCO is similar to free zones in that it is a zone within certain boundaries that has its own legal framework, but unlike industrial free zones that facilitate trading in goods, as a financial free zone, IFCO is intended to facilitate trading in capital. This goal is achieved by creating a financial regulatory framework that meets the requirements of international financial regulatory bodies in a way that makes it attractive for international financial institutions to operate from within the zone. To enable IFCO to achieve the required standard for its financial regulatory framework, IFCO will operate independently from the rules of the Central Bank of Oman, the Financial Services Authority, and all other regulatory bodies in Oman. In fact, IFCO will not be subject to any Omani laws other than the Penal Law, the Law of Anti-money Laundering and Counter-terrorist Financing, and certain aspects of Omani tax laws.

Financial free zones are not a new concept in the GCC as the DIFC in Dubai, QFC in Qatar, and ADGM in Abu Dhabi operate under this same exact model.

According to last week’s royal decree, IFCO will report directly to the new Office of Deputy Prime Minister for Economic Affairs, i.e. Sayyid Theyazin. It will have a board of directors appointed by royal order, and will primarily operate under three sub-authorities, an executive authority to manage the centre and create the infrastructure, a regulatory body to set the regulatory framework, and a dispute resolution tribunal to oversee the court system of IFCO. The royal decree gave IFCO the power to create its own legal framework without being bound by Omani law. DIFC, QFC, and ADGM have chosen to operate under a common law legal framework that operates entirely in English. It is likely that IFCO will operate under a similar approach.

This means that if a company is registered in IFCO, this company will not be subject to the Omani company law or the Omani labour law, but instead by new IFCO laws inspired by common law legislation. If there is a dispute between this company and third parties, the dispute will not be resolved by Omani courts, but by IFCO courts that operate using a common law legal framework, most likely by judges and lawyers trained in common law jurisdictions. In DIFC, QFC, and ADGM, all the presidents of their courts are international jurists from common law jurisdictions rather than nationals.

Last week’s royal decree merely set the very high-level structure and legal framework for IFCO, and it will be up to IFCO to create its own rules for what companies will be able to register in the zone. However, the royal decree states that companies can be registered under two categories: companies providing financial services (that is the key target of the zone—such as banking services, insurance, investment management, etc) and companies providing ancillary services (these are companies that provide support to financial service providers—such as legal services, accounting services, etc). The royal decree provides a non-exhaustive list of financial services that are permitted, and it is up to IFCO to determine the actual activities and the requirements for registration.

For a company to register in IFCO, the company must have physical presence in IFCO. The law also states that registration in IFCO allows you to operate in IFCO itself, but if you wish to operate outside IFCO in Oman, you will be bound by Omani law. The most obvious example of this is that if you are licensed to provide financial services in IFCO, this doesn’t mean that you can open an outlet outside IFCO and provide services to the Omani public without FSA’s approval. There is a small exemption that allows IFCO companies to promote their services or provide advice regarding IFCO legislation outside the zone and on the Omani mainland.

While the key objective of IFCO is to attract international financial institutions to Oman, registering in IFCO can provide significant advantages for Omani and non-Omani businesses that do not wish to be bound by Omani law and fall within the categories of financial services providers or ancillary service providers. For example, if IFCO permits the creation of holding companies created to own shares in other companies, a common law legal framework similar to that of England and Wales is likely to grant a higher level of autonomy for the shareholders in a way that Omani law currently does not provide. The mainland Omani legal system is known to being open to disregarding the concept of separate legal personality of LLCs and holding shareholders liable for the conduct of companies they own shares in. Creating a holding company in IFCO that owns the local Omani subsidiary can be extremely advantageous to Omani shareholders, even if the subsidiary is still subject to Omani law.

In addition to the benefits of not being bound by Omani law, companies established in IFCO will enjoy an exemption from corporate tax until 2076, non-Omanis working in IFCO will not be subject to personal income tax, and the zone is declared a zero-rated special zone for VAT purposes.

The creation of IFCO is a major and unprecedented development for the Omani legal system as a whole, not only for the way financial business is conducted in the country.

The royal decree came out only a few days ago, and it will take IFCO months, if not years, to start its actual operations, as it needs to develop its entire legal framework in a manner that complies with the international requirements of regulatory bodies and provide physical office space for the companies wishing to register in IFCO.

The Law of the International Financial Centre of Oman has already entered into force. You can read it in full in English on the link below:

Domestic workers are excluded from the scope of the Labour Law as they are considered to be one of the categories that are governed by special laws or systems. The new regulation has expanded the scope of those excluded categories from just domestic workers to 12 distinct categories including nannies, drivers, and others as listed in article 12 of the regulation. The new regulation introduces rules that are at times more restrictive and at other times less restrictive than the Labour Law. For example, the regulation requires the worker to be at least 21 years of age, whereas the Labour Law requires the worker to be at least 18 years of age and has provisions that allows hiring juvenile workers who are at least 15 years of age. The regulation also has some rules that are less restrictive than the Labour Law. For example, the working hours for domestic workers and their equivalent can be up to 12 hours per day, while the Labour Law caps this to 8 hours per day.

A significant new provision is introduced under article 31, which establishes an end-of-service gratuity for domestic workers upon the end of their employment contracts. This benefit was absent in the previous decision and is no longer found in the Labour Law.

This decision also amends pre-existing requirements regarding healthcare coverage. The previous decision only required employers to provide free local medical treatment throughout the contract period, the new decision mandates health insurance coverage for domestic workers.

The new regulation has already entered into force and employer have three months to comply with the law. You can read the decision in English in full on the link below:

The amendment makes it clear that the Official Gazette is to be published electronically, and that the MJLA can, if it wishes, publish it in a paper format as well. The amendment also stipulates that the MJLA may published certain items from the Official Gazette before the full publication of the issue. These two practices are already adopted by the MJLA and these amendments merely add a legal basis for the practices of the ministry.

Another change that is not based on current practices is the removal of the mention of the Directorate General of the Official Gazette from the law and its replacement with a generic term for the “competent division”. This suggests that the MJLA might be in the process of a restructuring that would move the mandates relating to the Official Gazette into another administrative division within the ministry.

You can read the full text of the new amendments to the Law of the Official Gazette on the link below:

You can also read the consolidated version of the Law of the Official Gazette on this link:

Companies subject to this law are required to comply with this obligation within a year from the date of the commencement of the commercial activity of such company.

Existing companies have up to 6 months to comply with this obligation starting from the date of renewal of the commercial register, or the issuance or renewal of the work license, whichever occurs first.

It is worth-noting that even though this is a new obligation under the Executive Regulation of the Foreign Capital Investment Law, the Ministry of Labour has previously issued instructions in the form of a circular requiring both foreign investor companies and local companies to employ at least a single Omani national.

The new amendment to the Executive Regulation of the Foreign Capital Investment Law enters into force today. You can read it full in English on the link below:

You can also view the consolidated version of the Executive Regulation of the Foreign Capital Investment Law on the link below:

This regulation supplements the Executive Regulation of the System of the Ownership of Real Estate in Integrated Tourism Complexes by adding new obligations to developers, buyers, and owners in Jebel Sifah Resort. Some of the new key obligation for developers under the new regulation include obligations to use an escrow account, appoint an independent audit office, and insure all units.

This new Jebel Sifah Resort Regulation enters into force tomorrow. You can read it in full in English on the link below:

The Law Combatting Human Trafficking of 2025 adds new detailed definitions for human trafficking concepts that were not defined in the previous law, such as sexual exploitation and forced labour. The law also criminalises new trafficking activities such as deporting and detaining of humans in the context of human trafficking. The punishments under the law have also been increased so that the maximum prison sentence for general offences is increased from 7 to 10 years.

The Law Combatting Human Trafficking of 2025 has already entered into force. You can read it in full in English on the link below:

The new decision sets employer and employee obligations in the remote work environment. Employer obligations including matters such as providing the equipment required for remote work and bearing the costs for their installation and maintenance as a default position unless agreed otherwise with the worker. The new decision also prohibits employers from violating the privacy of their workers when employers monitor the performance of remote workers. Workers also have obligations under this new decision such as an obligation to carry out the work assigned to them during the agreed working hours.

One of the most interesting aspects of this MOL decision is that it only recognises remote work conducted within the Sultanate of Oman and prohibits employers from hiring workers working remotely outside the Sultanate. This, of course, has no restrictions on the ability of an employer in the Sultanate of Oman to hire independent contractors working remotely outside the country, the law merely does not recognise this as employment under the Labour Law.

The Ministry of Labour Decision 523/2025 Regarding the Governance of Remote Work has already entered into force. You can read it in full in English on the link below along with our compliance toolkit:

Prior to this new decision, employees subject to the Labour Law were entitled to a 3% annual increment on their basic wage as long as the performance of the employee is not deemed “poor”.

Under the new decision, the percentage of the annual increment can range between 5% and 2% depending on the performance of the employee, and can be withheld completely if the performance of the employee is deemed “poor”.

This obligation is imposed in relation to Omani employees only. Employers found in violation of this decision are to be fined 50 Rial Omani for each employee against whom a violation is committed.

The decision also provides some grounds for suspending the implementation of the annual increment in general as we all rules for withholding the increment for individual employees.

This new decision enters into force tomorrow. You can read it in full in English on the link below:

Under the original royal decree the branch of insurance against work injuries and occupational diseases for non-Omani workers was supposed to enter into force in July 2026, today’s royal decree pushed this date to July 2028. Similarly, the branch of insurance of sick leave and extraordinary sick leave was supposed to enter into force in July 2025, it has now been pushed to July 2026. Finally, the savings system was supposed to enter into force in July 2026, and now it will enter into force in July 2027.

You can read Royal Decree 60/2025 in English in full on the link below:

The amendment created a new requirement for authorised signatories to fall under specific categories of individuals who can take this role, such as partners in the company, members of the board of directors, and administrative and finance staff. Notably it appears that it is now not possible to appoint an employee of another company who does not fall under any of the categories specified as authorised signatory.

This amendment of the Commercial Companies Regulation enters into force tomorrow. You can read the full text of this amendment in English on the link below: