Navigating Merger Control in Oman: Al Alawi & Co.’s Insight on Competition Law Compliance
Oman’s corporate and regulatory landscape continues to evolve in line with international best practices, particularly in the field of competition and merger control law. As the Sultanate’s economy grows more diverse and interconnected, ensuring compliance with the Competition Protection and Monopoly Prevention Law (Royal Decree 67/2014, as amended by Royal Decree 22/2018) has become an integral part of due diligence for mergers, acquisitions, and corporate restructurings.
At Al Alawi & Co., we have advised on numerous complex transactions in which competition clearance was a decisive factor in the closing process. Our experience demonstrates that a detailed understanding of the statutory framework, administrative procedures, and practical expectations of the Competition Protection and Monopoly Prevention Centre (the “Centre”) is essential for executing compliant and timely transactions in Oman.
1. Legal Basis of Oman’s Competition Regime
The Competition Law was enacted to safeguard the principles of economic freedom and market fairness. Article 2 of the Law sets the overarching purpose: to regulate competition and prevent anti-competitive conduct, including monopolies, dominance, and restrictive agreements.
Article 3 extends the law’s scope to cover all economic activities in Oman and, notably, those conducted abroad that have an effect within Oman. This extraterritorial application reflects modern international competition standards and ensures that foreign mergers with local impact are also captured.
The law is administered by the Competition Protection and Monopoly Prevention Centre, established under Royal Decree 22/2018 and operating under the supervision of the Ministry of Commerce, Industry and Investment Promotion (MoCIIP). The Centre’s authority includes investigating restrictive practices, reviewing economic concentrations, and issuing binding decisions.
2. Defining Economic Concentration and Dominance
Article 1 of the Law defines “economic concentration” as any act that results in a total or partial transfer of ownership of assets, shares, or rights from one person to another, or that establishes control or joint management over two or more entities, in a way that creates or strengthens a dominant position in a market.
In practical terms, this includes:
- Mergers and acquisitions that result in one entity gaining majority control;
- Transfers of shares or assets that confer decisive influence over another undertaking;
- Formation of joint ventures that unify control or operations within the same market.
Dominance, in turn, is defined as the ability to control or influence the market, including where a person or group controls more than 35% of the relevant market. Article 11 of the Law prohibits approval of any concentration that results in a party acquiring control over more than 50% of the market.
These statutory thresholds serve as critical indicators in determining whether notification and prior approval are mandatory.
3. The Notification Requirement and Standstill Obligation
Article 11 of the Competition Law mandates that any party intending to carry out a transaction constituting an economic concentration must submit a written request to the Centre for review and decision before implementation.
The Centre has 90 days from receipt of a complete submission to issue its decision, extendable by an additional 45 days where further examination is required. During this period, the transaction cannot be completed — a principle known as the standstill obligation.
Failure to notify or proceeding before clearance may lead to serious consequences. Article 20 of the Law prescribes criminal penalties, including imprisonment for up to three years and fines ranging from OMR 10,000 to OMR 100,000. In addition, transactions carried out in breach of the standstill obligation are considered null and void under Omani law.
Accordingly, the standstill rule is both procedural and substantive — non-compliance not only attracts penalties but also jeopardises the legal validity of the transaction itself.
4. The Centre’s Practical Approach
Through our firm’s direct engagement with MoCIIP and the Centre, we have observed a structured and evidence-based regulatory approach. The Centre’s evaluation typically focuses on the following key factors:
Extent of Market Control: Whether the transaction significantly increases the acquirer’s control or ownership across undertakings active in the same market.
Market Structure and Competition: The number of independent competitors, market concentration, and barriers to entry.
Aggregation of Holdings: The Centre aggregates control interests held by the same group across multiple entities in the same sector to assess cumulative dominance.
Data Integrity: The Centre expects verifiable, Oman-specific data—such as local turnover, production capacity, and market share statistics—to support the notification.
Pre-Filing Engagement: The Centre welcomes early communication through an initial written submission, often by email, summarising the transaction, ownership structure, and key data. This step can expedite the review process and clarify documentation requirements before the formal filing.
This pragmatic and data-oriented methodology reflects the Centre’s emphasis on preventative oversight—ensuring that no group of undertakings acquires structural power to influence prices, restrict output, or deter market entry.
5. The Role of Legal Counsel
The competition clearance process requires coordination among multiple regulators, including the Capital Market Authority (CMA) for share transfers involving closed joint stock companies and MoCIIP for registration and record updates. Each stage has distinct documentation and timing requirements, which must align to ensure a seamless transaction.
At Al Alawi & Co., our competition law team assists clients in:
- Conducting pre-filing assessments and preparing the legal and market analysis required for submission;
- Drafting and reviewing the initial notification and formal filing to the Centre;
- Liaising with MoCIIP, CMA, and other authorities to synchronise approvals; and
- Structuring conditions precedent in share purchase agreements to ensure compliance with the standstill obligation.
This integrated approach reduces regulatory risk and ensures that our clients’ transactions remain enforceable and fully compliant under Omani law.
6. Looking Ahead: Compliance as Corporate Strategy
Oman’s competition framework continues to evolve toward a more transparent and predictable regulatory regime. The government’s objective is not to restrict investment but to ensure that market efficiency, consumer welfare, and fair pricing remain protected.
For investors and businesses, competition compliance is now a strategic element of corporate planning. Early engagement, sound data collection, and precise legal structuring can transform regulatory compliance from a procedural burden into a source of transactional certainty.
At Al Alawi & Co., we remain at the forefront of advising on competition and corporate law in Oman. Our deep familiarity with administrative practice, statutory interpretation, and international standards allows us to guide clients confidently through every stage of the merger control process — from structuring and notification to final clearance.