Muscat, Oman

The Financial Services Authority (FSA), regulator of Oman’s capital market and insurance sector, has issued Decision No. 28/2025 to promulgate the Regulation for the Promising Companies Market, following Royal Decree No. 18/2025 establishing a secondary market within the Muscat Stock Exchange under the name 'Promising Companies Market.'

This decision comes in line with the Royal Directives to launch the Capital Market Incentive Programme, aimed at enhancing the investment and business environment in the Sultanate of Oman, broadening financing options for companies of all types, strengthening corporate governance and sustainability, improving reliability, upgrading the Muscat Stock Exchange to emerging market status, expanding the investor base, facilitating exits and boosting market liquidity.

The regulation forms part of ongoing efforts to strengthen the legislative and regulatory framework of the capital market sector, enhancing the ability of Omani companies to access financing tools and preparing them for gradual integration into the main market through a phased approach.

It sets out the procedures and conditions for listing promising companies, enabling start-ups, SMEs, and private and family-owned companies to benefit from a streamlined regulatory environment tailored to their needs, with financing and operational incentives that support sustainability and growth.

The regulation provides for two listing options, direct listing and indirect listing. Direct listing allows a company to list without increasing capital or allocating part of its shares via private placement. It requires the company to have achieved net profits over the past three years, an annual revenue growth rate of at least 14.4% during that period, and a minimum of 20 shareholders.

Indirect listing involves raising capital or allocating part of the shares through private placement, requiring at least two years of operational and financial performance, offering at least 20% of capital via private placement, and meeting a minimum shareholder threshold.

Companies under establishment may list via the indirect route without meeting the two-year performance requirement or providing audited financial statements, provided they comply with other stipulated conditions.

The regulation outlines the process for submitting listing applications to the FSA, with a three-working-day review period from the date all requirements are met. If no response is given within this period, the application is deemed approved. The Muscat Stock Exchange may cancel a listing in cases of regulatory breaches, subject to approved guidelines. Trading in the Promising Companies Market is restricted to qualified investors, including licensed securities sector entities, insurance companies, the Social Protection Fund, investment funds, and high-net-worth or financially knowledgeable individuals.

Listed companies must comply with periodic financial disclosure requirements, applying the simplified International Financial Reporting Standards for SMEs (IFRS-SME). This includes semi-annual unaudited disclosures within 30 days of the half-year end, and annual audited disclosures within 90 days of the financial year end. They are also subject to disclosure rules for material information under related regulations.

The regulation restricts founders from selling their shares for one year from the listing date, with a permitted exit of up to 10% under exchange rules. For companies under establishment, founders may not dispose of their shares until one full financial year after registration, with the FSA able to extend this period.

It is accompanied by detailed schedules outlining the service fees related to listing and issuance, reflecting the Authority’s approach to simplifying the financial and operational burdens on target companies, and contributing to encouraging their participation in the market and promoting a culture of corporate transformation and financing through the capital market.

This regulation represents a significant implementation step in developing the regulatory framework for the Promising Companies Market, translating Royal Decree No. 18/2025 into action, and aligning with national objectives to empower the private sector, support value-added companies, and foster an attractive investment climate that diversifies Oman’s economic base.