The Financial Services Authority (FSA) of the Sultanate of Oman has taken a decisive step forward in transforming Oman's capital markets landscape with the issuance of Decision No. 28/2025 (the Regulation), which establishes the regulatory framework for the Alternative Investment Market (AIM). This regulation, implementing Royal Decree No. 18/2025, represents a significant moment for Oman's economic diversification strategy and aims to open opportunities for small and medium enterprises, startups, and private companies seeking capital market access.
Strategic context and objectives
The introduction of the AIM demonstrates Oman's ongoing commitment to creating a more dynamic and accessible investment environment. The initiative specifically targets several strategic objectives: upgrading the Muscat Stock Exchange (MSX) to emerging market status, expanding the investor base, enhancing market liquidity, and importantly, providing alternative financing routes for companies that may not yet meet the more exacting requirements of the main market.
From a legal and regulatory perspective, the introduction of the AIM represents a significant approach to market development, creating a tiered capital market structure that accommodates companies at different stages of their growth journey.
Dual listing framework: flexibility with oversight
The Regulation establishes two distinct listing pathways, each tailored to different company profiles and capital requirements. The direct listing route caters to established, profitable companies seeking market access without immediate capital raising needs. Companies pursuing this route must demonstrate consistent profitability over three years, maintain annual revenue growth rate of at least 14.4 per cent., and establish a minimum shareholder base of 20 investors.
The indirect listing pathway, on the other hand, accommodates capital-raising activities and offers greater flexibility for emerging businesses. This route requires companies to offer at least 20 per cent. of their capital through private placement, with a limited operational history requirement of two years.
Companies in conception
One of the most interesting features of the Regulation is that it provides an innovative provision for companies still under establishment, allowing them to access the capital market without meeting the standard performance criteria, provided they satisfy other regulatory conditions. This provision essentially allows new, pre-revenue companies to raise capital through public markets, with the intention being to broaden the access of business ventures to the capital markets.
However, this approach represents significant challenges, including heightened due diligence requirements for investors evaluating companies without an operating history, the need for increased regulatory scrutiny to prevent speculative or 'reckless' businesses from accessing the public markets and potential (significant) reputational risks for the MSX and the Omani capital markets as a whole, if early listings fail to deliver on projected performance.
Streamlined regulatory process
The Regulation places significant emphasis on regulatory efficiency. The FSA has committed to a three-working-day review period for listing applications, with a unique "deemed approval" mechanism where applications are automatically approved if no response is provided within the specified timeframe. This approach significantly reduces regulatory uncertainty and accelerates time-to-market for companies coming to market.
Investor protection and market integrity
While promoting accessibility, the Regulation maintains investor protection measures. Trading on the AIM is restricted to qualified investors, including licensed securities entities, insurance companies, investment funds, and high-net-worth individuals with appropriate financial sophistication. This approach seeks to balance market development objectives with prudential considerations, by ensuring that participants have the necessary expertise to evaluate investment opportunities in this market segment.
The Regulation also implements comprehensive disclosure requirements, utilising simplified International Financial Reporting Standards for SMEs (IFRS-SME). Companies must provide semi-annual unaudited financial disclosures within 30 days of half-year ends and annual audited statements within 90 days of financial year-end, ensuring transparency while reducing compliance burdens compared to main market requirements.
Founder and management considerations
The Regulation imposes certain restrictions on founder and management share disposals. A one-year lock-up period applies to founder shares from the listing date, with limited flexibility allowing up to 10 per cent. disposal under specific exchange rules. For companies under establishment, the restriction extends until one full financial year after registration, with FSA discretion to extend this period further. These provisions are intended to help ensure management commitment while providing some liquidity options.
Legal and advisory implications
For legal practitioners and corporate advisors, the AIM regulation creates significant opportunities to guide clients through this new market access route. The regulatory framework requires careful consideration, particularly regarding disclosure obligations, corporate governance requirements, and the transition from private to public company status.
Companies considering an AIM listing will benefit from early engagement with experienced capital markets counsel to ensure compliance with the evolving regulatory landscape. This interplay between the AIM requirements and existing corporate law frameworks will require careful analysis and planning.
Looking forward
The establishment of the AIM represents a crucial building block in Oman's economic transformation strategy. By creating accessible capital market entry points, the regulation should stimulate entrepreneurship, improve corporate transparency, and contribute to the broader objective of economic diversification away from oil dependency.
With over four decades of experience in Oman and a deep specialism in capital markets matters, our on-the-ground experts are ideally placed to provide guidance on AIM listing requirements and how the new framework might best support your business goals. Please get in touch with our capital markets team in Oman for more information.
