Oman Royal Decree 38/2025: What Businesses Need to Know About the New Special Economic and Free Zones Law

08 April 2025

Josleen Deeb

Economic Zones (SEZs) and Free Zones, replacing the previous Free Zones Law. This decree signifies notable modifications to the legal structures that control these zones. The attached law, as stated in Article I, is now in effect, while Article II ensures that the provisions of the new law are implemented effectively. The decree was issued on April 7, 2025.

Muscat: On 7 April 2025, Sultan Haitham bin Tariq issued Royal Decree 38/2025, repealing the 2002 Free Zones Law and enacting a unified framework for Oman’s Special Economic Zones (SEZs) and Free Zones under the oversight of the Public Authority for Special Economic Zones and Free Zones (“OPAZ”).

Protection of Existing Rights All companies and investors already operating in SEZs and Free Zones (including Duqm) retain their current incentives, exemptions and guarantees until their contractual terms or concessions expire.

Executive Regulations & Transition OPAZ has one year from 7 April 2025 to issue detailed regulations. In the interim, existing zone-specific rules remain in force to the extent they don’t conflict with the new law.

Repeal of Prior Legislation Royal Decree 38/2025 expressly repeals Royal Decree 56/2002 and any other laws or regulations inconsistent with the new SEZ and Free Zones Law.

Key Implications for Investors

• Streamlined Licensing: A single “one-stop” regulatory regime for all SEZs and Free Zones

• Enhanced Incentives: Anticipated expansion of tax holidays, customs exemptions and land-lease benefits

• Greater Clarity: Consolidated legal framework reduces jurisdictional overlap and speeds up project approvals

Oman’s Competitive Edge With a 15% headline corporate tax and extensive Free Trade Agreement network, Oman’s refreshed SEZ/Free Zones law further bolsters its appeal as a regional logistics and manufacturing hub—especially given its strategic ports and proximity to GCC and Asian markets.

CONCLUSION & NEXT STEPS

• Review existing zone agreements to confirm continuity and expiry dates

•Track OPAZ’s forthcoming executive regulations to identify new licensing or incentive opportunities

• Engage legal counsel to align corporate structures and applications with the unified regime

ALKETBI TOUCH

For tailored advice on maximizing your SEZ or Free Zone investments under Royal Decree 38/2025, please contact us and our Oman Corporate & Regulatory team will assist you.