OMAN Law and Practice Contributed by: Ahmed Said Al Jahwari, Idil I. Kaner and Al Muhalab Al Issai, Dr. Ahmed Said Al Jahwari & Partner Law Firm
challenges or obstacles to its expansion. In fact, cur - rent regulations provide incentives for growth, includ - ing tax exemptions for investment funds and financial trusts, as well as benefits for foreign investors bringing capital into Oman. 1.5 Sponsored/Non-Sponsored Debt The primary focus of private credit providers has been on founder-owned companies and SMEs. As banks tend to prioritise financing government-backed con - tracts, larger corporations, and established family groups, SMEs and non-sponsored companies that need flexible capital often turn to private credit pro - viders. Private credit is also accessible to public com - panies where appropriate. There is an increasing trend among private credit providers to offer “pink loans,” aimed at financing women-owned businesses. 1.6 Recurring Revenue Deals and Late-Stage Lending The recurring revenue market in Oman is still in its early stages. As such, private credit providers often do not offer bespoke services in this area. Lending remains predominantly asset-backed and conserva - tive. 1.7 Deal Sizes, Fund Sizes and Fundraising Typically, private credit transactions in Oman range from OMR500,000 to OMR5 million. Fund sizes are modest, generally between OMR10 million and OMR50 million. Most private credit providers are small, rely on their own balance sheets, and have a conservative investor base. While incentives exist to attract foreign investment and support Oman’s Vision 2040 goals, awareness of these regulatory frameworks remains limited, which can constrain fundraising efforts. 1.8 Impending Regulation and Reform Oman does not regulate private credit as a separate sector, and there are no pending proposals to intro - duce specific regulations for private credit funds. The Central Bank of Oman currently oversees all lending activity, meaning that any systematic or commer - cial lending requires a licence, regardless of how it is structured. Recent reforms have tightened these requirements, making unlicensed direct lending more difficult for foreign private credit providers. Capital-
market reforms have primarily benefited bond and sukuk investors, rather than private credit lenders.
2. Regulatory Environment 2.1 Licensing and Regulatory Approval Whether a lender requires a licence to provide loans to Omani borrowers depends on the nature of the activ - ity. Local lenders must obtain a licence from the Cen - tral Bank of Oman. Licensing requirements for foreign lenders vary depending on the specifics of the trans - action, including whether the lending is isolated, off - shore, or non-systematic. Taking security over assets located in Oman is permitted, subject to compliance with local perfection and enforcement rules. 2.2 Regulators of Private Credit Funds Oman does not have a dedicated regulator for private credit activity. Regulation is activity-based: the Central Bank of Oman oversees lending and finance activi - ties, while the Financial Services Authority regulates securities, funds, bonds, and sukuk. 2.3 Restrictions on Foreign Investments There are no explicit restrictions on foreign invest - ment in private credit funds (apart from customary know your customer (KYC), anti-money laundering and combating the financing of terrorism (AML/CFT), and sanctions requirements). Restrictions may arise indirectly if activities amount to regulated lending, which trigger licensing and registration requirements. Foreign ownership is permitted under Oman’s Foreign Capital Investment Law. 2.4 Compliance and Reporting Requirements There are no specific compliance or reporting require - ments that apply solely to private credit providers in Oman. Applicable obligations depend on the structure of the transaction and may include AML/CFT compli - ance, registration of security interests, and ongoing reporting obligations for licensed entities. 2.5 Club Lending and Antitrust General competition law applies to private credit pro - viders. Club lending is permitted, provided it does not amount to unlicensed banking activity. The Competi -
212 CHAMBERS.COM
Powered by FlippingBook