Laws & Amendments

17 Royal Decrees

The year 2025 was a landmark year for Omani legislation, introducing several major new laws that reshape the economic and social landscape. Most notably, the Personal Income Tax Law was issued, marking a significant shift in the nation’s fiscal policy. Other critical pieces of legislation included the new Banking Law, the Public Health Law, the Electronic Transactions Law, and the Law Regulating Real Estate. Significant attention was also given to social and human rights issues with the issuance of the Law Combating Human Trafficking, the Law of the Rights of Persons with Disabilities, and the Law Regulating the Transfer and Transplantation of Human Organs and Tissues.

Systems & Amendments

2 Royal Decrees

In Oman, the term “system” refers to a legal instrument that governs the operation of a government entity or the operation of a government legal process. The most significant new system that came out in 2025 was the System of the Central Bank of Oman, which accompanied the new Banking Law. Additionally, amendments were made to the System of the Social Protection Fund to align it with ongoing social protection reforms.

Gov Restructuring

10 Royal Decrees

The government continued its restructuring efforts to enhance efficiency and investment appeal. The most significant development was the establishment of the Court of Investment and Commerce and the issuance of its law. Another major restructuring involved the Secretariat General of the Tender Board, which was renamed and expanded into the Projects, Tenders, and Local Content Authority. The Alternative Investment Market was established this year.

Treaties

36 Royal Decrees

Oman ratified a substantial number of treaties this year, reflecting its active diplomatic and economic engagement. A historic milestone was the approval of Oman’s accession to the International Covenant on Civil and Political Rights. The year featured a flurry of visa exemption agreements with countries such as Russia, Iran, Indonesia, Belarus, and the Maldives, alongside double taxation agreements with nations including Bahrain, Iraq, and Tanzania.

Concessions

12 Royal Decrees

Concession agreements for exploration and mining were approved for multiple blocks, including agreements with Al Tamman Indsil Mining, Oman Chromite Company, and Wusta Mining Company. In the energy sector, the Marsa Protocol relating to the concession for Block 10 was also approved.

Nationality

7 Royal Decrees

Omani nationality is granted, revoked, and re-instated by royal decree and this category had 6 royal decrees in this area, including decrees granting Omani nationality and explicitly authorizing dual nationality with British and Russian citizenships.

Appointments

14 Royal Decrees

The most significant appointments made by royal decree this year were the appointment of a new Governor for the Central Bank of Oman along with confirmation of the appointment of a President for the Projects, Tenders, and Local Content Authority.

Misc

12 Royal Decrees

In addition to the categories detailed above, there were 9 royal decrees regarding miscellaneous, yet important, topics such as approving the General Budget of the State for 2025 and establishing the Special Economic Zone in Rawdah and the Special Economic Zone in the Governorate of Dhahirah, as well as licensing Space Communication Technologies.

2025 Wrapped

This post outlined the royal decrees issued this year, but this is merely a portion of the Omani legislation that was issued this year which includes ministerial decisions and regulations, all of which are available on Decree.

The year 2026 is expected to have even bigger legal developments. To stay up to date with new laws as they come out, make sure that you follow Decree on LinkedIn, Instagram, and Bluesky.

Maximum Overtime Working Hours

Under articles 70 and 71 of the Labour Law, the maximum regular working hours are capped at 8 hours per day and 40 hours per week. The law also caps the number of regular hours plus overtime to 12 hours.

It is important to note that these hours are “actual” working hours hence, they do not include the mandatory daily rest and lunch break. The law stipulates that a continuous working period must not exceed 6 hours without a break, which is generally one hour.

This distinction that rest periods are not working hours has been reinforced by the Omani judiciary. A notable principle from Supreme Court Contestation 766/2017 confirms that rest time is excluded from overtime calculations, ensuring that compensation is based strictly on time spent working.

Consent is Required for Overtime Work

A primary requirement is that employers must obtain the worker’s written consent before assigning overtime, ensuring the employee agrees to the extra work.

Despite the general requirement for consent, there are specific exceptions under article 72 of the Labour Law. For example, article 72(1) permits the employer to require the employee to work overtime in cases such as annual inventory work, budget preparation, liquidation, and the closing of accounts. Article 72(2) also permits the employer to require the employee to work overtime if it is required to prevent the occurrence of an accident or other similar emergencies. However, in this case the employer is required to inform the Ministry of Labour of this.

Calculating Overtime Compensation

When employees agree to overtime, they are entitled to their basic wage plus a surcharge that scales based on when the work is performed. For instance, daytime overtime commands a minimum 25% increase, while night work which is defined as 9pm to 5am that requires at least a 50% surcharge. Work on weekends and official holidays is compensated with a 100% surcharge or a compensatory rest day. However, in mandatory emergency situations where consent is waived, these rates are 50% for daytime hours, 75% for night hours, and 200% for work performed on rest days or holidays.

Conclusion

We highly recommend that both employers and employees make themselves familiar with the legal provisions relating to overtime by reading the full text of the Labour Law on the link below:

Written by:

Nadine Al-Barwani

Nadine a legal intern at Decree. She has previously interned in several international law firms in Muscat. She is interested in corporate law and energy law. She holds an LLB from Leeds Beckett University.

This blog post will highlight the key provisions relating to probation periods under the Labour Law.

Probation is defined under article 1(21) of the Labour Law as the initial phase of the employment contract during which the employee’s suitability for the job is assessed. The Labour Law sets out the maximum duration of this period: up to three months for workers paid on a monthly basis and up to two months for workers paid by any other method.

The law also makes it clear that a worker may only be placed on probation once with the same employer. Not only does this mean that employers cannot impose a new probation period upon contract renewal or when an employee is promoted internally, but an employee who quits working for an employer after completing their probation period, moves to another employer, and then returns to a new job for the first-mentioned employer does not have a probation period.

The law also provides that the employer may terminate the employment contract during the probation period if the employee is deemed unsuitable to continue without the need to provide any justification, by giving a seven-day written notice. In Supreme Court Contestation 802/2020, the Supreme Court ordered an employer to compensate an employee for terminating his employment during the probation period without giving the seven-day notice. However, the compensation was limited to the equivalent of seven days pay.

We highly recommend that both employers and employees make themselves familiar with the legal provisions relating to probation periods by reading the full text of the Labour Law on the link below:

Written by:

Abdulrahman Al-Farsi

Abdulrahman Al-Farsi is Legal Associate at Decree. He holds an LLB from the University of Liverpool and had previously worked in an Omani law firm.

Oman routinely signs BITs with other countries as part of its strategy for foreign investment and has 30+ agreements with countries such as the UK, Germany, and Japan.

Here are some key investors rights commonly found in BITs:

The Right to “Fair and Equitable” Treatment

To avoid any arbitrary or discriminatory actions that could harm the investors or their investments, the host government must maintain full transparency and uphold a minimum standard of treatment, that is established in the treaty, to be given to the investors and their investments. This right extends beyond simple “fairness”, it obliges the host government to act transparently, consistently, and in good faith towards foreign investors.

Examples of cases brought forward include claims of unfair treatment, abuse of power or bad faith, fundamental changes in the law that contradict expectations, and inconsistent application of legal procedures and regulations that violate the right to fair treatment.

The Right to Compensation for Expropriation

It is important to note that the host government is entitled to expropriate the property of the investors; however, it must be for legitimate public use, non-discriminatory, done in accordance with due process, and followed by an adequate market value compensation paid without delay and freely transferable. The right covers both direct (where the property is physically transferred to the government or it’s entities) and indirect expropriation (where the property isn’t physically transferred but the goverement deprives the investors of the property’s full economic use and enjoyment). For example, implementing excessive regulations and stripping control from the investors.

The Right to Allow Free Transfer of Funds

Another common right under BITs is related to cross-border fund transfer, which allows investors to make transfers in and out of the host country with ease and without delays. This obligation prohibits any hinderance from the host government that might trap profits within the host country. It ensures liquidity and financial stability, which are crucial for international business, as well as reinforcing investor confidence by guaranteeing free flow of funds and smoother economic operations. The guarantee of free transfer typically covers the following types of flows; profits, interest, dividends, proceeds from sales or liquidations (total or partial), capital funds, and loan payments, etc.

This right also prevents the implementation of currency controls by guaranteeing market exchange rates at the time of the transfer. However, the government may also exercise its right to delay or halt transfers, while still acting good faith, in the events of bankruptcy, enforcement of creditor rights, criminal investigations, financial regulatory requirements, or compliance with court orders and judgments.

The Right to Resolve Disputes with the Government

One of the most powerful rights given to investors under BITs is the right of the investor to resolve disputes the investor has with the host state using a variety of dispute resolution venues such as domestic courts and international arbitration. The actual venues that the investor has access to and the process for resolving disputes depends on the actual text of the treaty, however, most treaties require a cooling-off period for negotiations before resorting to a formal dispute resolution mechanism. If no settlement is reached, the investors may then bring a claim before the domestic court, ad hoc arbitration, or the ICSID, which Oman is a member of, insuring independency from domestic courts.

Conlcusion

In summary, Bilateral Investment Treaties, or BITs, are a fundamental tool that protects foreign investors by ensuring fair treatment, compensation for expropriation, and free fund transfers, while allowing direct dispute resolution against host governments. They create a stable legal framework that balances investor rights with legal government actions, developing confidence and promoting cross-border investment.

The Oman-Iran BIT is the most recent BIT that Oman entered into and was singed in Muscat on May 2025.

Written by:

Shiyam Al-Harrasi

Shiyam is a Legal Intern at Decree. She has previously interned in international and Omani law firms. She is interested in commercial and corporate law. She holds an LLB from the Leeds Beckett University.

Defining the Zones

It is worth noting from the start that the new law does not explicitly define special economic zones or free zones. However, it can be understood from the law that a special economic zone is a wider concept than a free zone as special economic zones can include within them free zones, while free zones cannot include within them special economic zones. Furthermore, special economic zones are direclty managed by OPAZ, while free zones are managed by an operating company that is designed through a concession agreement.

Both special economic zones and free zones offer incentives like tax exemptions, 100% foreign ownership, and simplified administrative processes, making them attractive for industrial, commercial, and recreational projects that contribute to long-term national growth.

Key Functions and Exemptions

Special economic zones and free zones in Oman serve as dynamic investment hubs designed to simplify business operations and increase economic growth. Through a one-stop-shop system, investors benefit from simplified administrative procedures, fast-track permits for non-Omani workers, and an exemption from the minimum capital requirement set under the Commercial Companies Law, etc. Moreover, investors enjoy full protection from nationalisation, seizures, or asset freezing, and have the freedom to transfer profits and capital abroad. Special Economic Zones and Free Zone companies are also exempt from the Commercial Agencies Law, meaning they can engage in trade without requiring a local agent. However, some sectors such as, banks and financial institutions, insurance and reinsurance companies, and telecom service providers, and the like are excluded from income exemptions.

Effects of Legal Shifts

Prior to the issuing of this law, Oman’s special economic zones and free zones operated under separate decrees, and this new law created a unified legal framework that consolidates the regulation of Oman’s special economic zones and free zones.

Overall, this reform transforms Oman’s zoning landscape from a fragmented system into a coordinated national framework. It creates a more predictable environment for investors, improves administrative efficiency, and ensures that both special economic zones and free zones contribute cohesively to Oman’s long-term diversification goals under Oman Vision 2040.

Written by:

Shiyam Al-Harrasi

Shiyam is a Legal Intern at Decree. She has previously interned in international and Omani law firms. She is interested in commercial and corporate law. She holds an LLB from the Leeds Beckett University.

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:

One of the most signed treaties by the Sultanate of Oman is a DTT, also known as a Double Taxation Agreement (DTA). It is a bilateral agreement between two countries that aims to prevent the same income from being taxed by both jurisdictions, thus facilitating the flow of foreign investment. A DTT clearly outlines which country has the primary taxing rights, this clear structure and the elimination of the burden of double taxation are great advantages to foreign investors.

It is very rare for DTTs to have identical provisions, as the process of signing one involves starting with a model agreement and involves a cycle of negotiations between the governments regarding priority over taxing rights and the exact anti-abuse policies they want to implement. For example, a principal purpose test is a provision that can deny the benefits of the treaty if the true purpose was only to exploit those benefits. Model agreements are published by large organisations like the UN and the OECD, and many countries follow the models with small tweaks to better suit their interests. A provision mandating tax withholding by parties in the Sultanate is not uncommon in treaties it signs.

The Sultanate has signed at least 40 DTTs with countries across the globe, the most recent one being signed with Bahrain earlier this year and recently ratified by Royal Decree 62/2025. While it might seem unusual that Oman has signed DTTs with only two countries in the GCC, one of its closest groups of allies, but this is due to the relatively new implementation of tax systems in GCC countries, and it is very likely that we will see such treaties emerge with the complete implementation of tax systems in GCC countries.

In a practical example of the application of a DTT, if a consultant based in Spain was hired for a project by a company based in Oman, under article 52 of the Omani Income Tax Law, the Omani company should withhold tax in connection with any payment made to the Spanish consultant. However, to avoid double taxing the same revenue twice, the DTT between Oman and Spain stipulates in article 14 that income derived by such a consultant can only be taxed in the country of residence and not the other countries, which eliminates the requirement of withholding tax in Oman, and therefore reduces the tax liability of this consultant when doing work in Oman.

Double Taxation Treaties are essential tools in international tax law. They provide clear guidelines for investors and governments on their rights and responsibilities—clarity that is crucial when dealing with multiple tax jurisdictions.

You can use Decree search to locate DTTs signed by the Omani government, and you can view the most recent one signed between Oman and Bahrain on the link below:

Written by:

Al-Julanda Al-Rashdi

Al-Julanda is a Legal Intern at Decree. He has previously interned in international and Omani law firms in addition to interning in an in-house legal team in the banking sector. He is interested in commercial law and banking law. He holds an LLB from the University of South Wales.

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:

Legal Status

Law firms must be established as either advocacy firms or as consultancy firms, and the two cannot be combined and they must be owned by advocates or legal consultants and they cannot be partners in more than one firm.

This segregation of the two specialisations assumes that their work is sufficient as a stand alone service, however the truth of the matter is that they are complimentary services, a system like the UK’s LLP structure allows both to work together. This will have ramifications to firms with foreign investment as they will not be able to register as advocates, and those having two teams of corporate and litigation will most likely have to split. Another consequence will occur to clients who had their work previously done by one firm, as now they will have to go to two distinct firms to manage their disputes and contracts.

Limited liability

Article 51 of the Executive Regulation of the Advocacy and Legal Consultancy Law stipulates that a “partner in the firm is personally liable towards the firm and the rest of the partners for his professional mistakes, and the firm is liable for the mistakes of the partners before third parties”. This can be contrasted to the shareholders of an LLC, who are liable up to the extent of their contribution to the capital, and their personal assets are protected. This demonstrates that the partners of a law firm do not have limited liability provided by LLCs and one-person companies.

It can be argued that these distinctions illustrate that law makers hold law firms to a higher standard as their value is derived from their professionalism and not the unique name, thus requiring them to offer more value than a mere alluring marketing scheme.

Naming

According to article 40 of the Advocacy and Legal Consultancy Law, the “name of the firm must be derived from the name of its owner or one or more partners in it”. In the case of a death of one of the partners, their name should be amended unless the partners obtain the written consent of the heirs to keep the deceased name, as stipulated by article 59 of the executive regulation.

This limitation does not exist for LLCs and one-person companies as their name does not have to be tied to the identity of the shareholders, which provides LLCs and one-person companies with more freedom to be unique and distinctive.

Succession

A major difference between law firms and traditional LLCs and one-person companies is the mechanism by which the ownership of the law firm is transferred to the heirs of the owner. For a law firm owned by a single person, the law firm ceases to exist after his death, unless the shares are collected by heirs who are advocates or legal consultants. If the law firm is a partnership, the law firm does not cease to exist, but the shares do not transfer to the heirs unless they are advocates or legal consultants, if they are not, they must transfer the shares to a registered advocate or legal consultant within 90 days of the death of the partner as stipulated in article 58 of the executive regulation.

This is not the same as a traditional LLC or a one-person company where there is no pre-requisite for the successors to meet certain professional qualifications before they inherit the shares.

Conclusion

This post provided a few examples of the differences between law firms and traditional companies types such as LLCs and one-person companies. To learn you more about the process for establishing a law firm, you can read the Advocacy and Legal Consultancy Law and its executive regulation in English in full on the link below:

Written by:

Abdullah Al-Azri

Abdullah is a Legal Intern at Decree. He has previously interned in an international and in an Omani law firm. He is interested in corporate law and holds an LLB from the University of Sheffield.