The interpretations of startups and entrepreneurial entities may differ across countries and organizations. Broadly, a startup is a pioneering initiative poised for significant growth, propelled by technology, and distinguished by possessing a functional prototype along with a scalable, replicable business model. These ventures are established to address inventive problem statements, frequently focused on technology and to seize emerging market opportunities.
Oman is actively positioning itself as a focal point for technology entrepreneurs, taking significant steps in this direction. Embracing a forward-thinking strategy outlined in Oman Vision 2040, the nation aims to shift its economic reliance from oil and gas to a diversified, knowledge-driven model.
Supported by initiatives such as the Oman Future Fund and the National Initiative for Artificial Intelligence, along with considerable budgetary allocations, the country is proactively driving economic diversification. The Rising Omani Startups Programe is dedicated to nurturing innovation, supporting the establishment of startups, facilitating business collaborations, and identifying investment opportunities.
Companies and Entities Supporting Startups in Oman
While Oman currently lacks a specific legal framework delineating the details of startups within its legislative structure — apart from the criteria defining Small and Medium Enterprises (SMEs) — the government is actively undertaking regulatory improvements aimed at fostering the growth of startups. As an illustration, the entrepreneurial ecosystem supports innovation and economic advancement by providing startups with the Entrepreneurial Card, a valuable asset connecting them to various benefits and support services.
Meeting the eligibility criteria for these advantages not only encourages small ventures like startups but also includes tax exemptions to bolster their financial viability and facilitate expansion. The primary objective of the Rising Omani Startups Programme is to facilitate innovation, assist in the establishment of startups, create connections between founders and business prospects, and identify investment opportunities for expansion beyond Oman.
This program extends support to entrepreneurs at every stage. Omantel Labs collaborates with the Central Bank of Oman (CBO) to host an expanding Fintech sandbox and offers a six-month accelerator for startups engaged in solutions related to 5G, IoT, Cybersecurity, customer experience, and Big Data.
The ITHCA Group, a government investment arm, concentrates on developing Oman's IT infrastructure and digital capabilities. The Oman Technology Fund administers the OTF Techween, a pre-seed fund program providing funding, co-working space, and mentoring. Additionally, the crowdfunding platform Beehive facilitates connections between investors and startups, while Ethisx serves as an investment platform dedicated to impact-driven crowd-investments and financing.
Government Incentives
Tax Incentives
The government provides several tax concessions for businesses and startups in Oman. Key points include no personal income tax, a standard corporate tax rate of 15%, a reduced corporate tax rate of 3% for eligible Small and Medium Enterprises (SMEs), and a 30-year income tax exemption for companies in Special Economic Zones.
Additionally, businesses can deduct startup expenses in their first year, and companies operating in specific sectors are exempt from customs duties for five years. The carryforward of losses is generally limited to five years, except for companies in a mandatory tax-exempt period, allowing indefinite carryforward of losses for offsetting future profits. Goods of Gulf and Arab origin are exempt from customs duties under specific agreements.
Non-tax incentives
Oman provides a variety of non-tax incentives to support economic development and enhance global competitiveness. Sharakah, established by a Royal Decree, focuses on fostering SME growth through education, financial support, and advisory services.
It offers programs like a loan scheme, bill discounting scheme, and equity scheme for technology and innovation. The SME Development Authority has programs financing working capital and fixed assets, promoting local added value, supporting incubated institutions and accelerators, and financing various projects, including industrial, manufacturing, service, commercial franchising, mining, logistics, and tourism. The funding limits range from OMR 70,000 to OMR 250,000, depending on the program and project type. These initiatives contribute to the overall economic vitality of Oman.
Promising Sectors and Success Examples
E-commerce
Oman's e-commerce market is anticipated to achieve a value of $868 million by 2025. The sultanate boasts a robust internet penetration rate exceeding 95.2%, coupled with widespread mobile broadband access and a strong 5G network.
Noteworthy e-commerce startups in Oman include Tanweel, Bon, and X Garage. Talabat, a regional startup under Delivery Hero, has been operating successfully in the country since 2018. Floward specializes in Ecommerce for flowers and gifts, while Akeed Delivery, an Omani startup for food and grocery delivery, has secured USD 2.5 million in funding across multiple rounds.
Clean tech
Oman is swiftly expanding its Clean tech infrastructure, with a target of attracting $140 billion in investments solely for developing the green hydrogen sector by 2050. The Ministry of Transport, Communications, and Information Technology aims for all new vehicles to be electric or hydrogen-fueled by 2050. During Oman Sustainability Week 2022, Oman Shell and Oman Airports Management Company unveiled the Green Hydrogen for Mobility project, marking Oman's inaugural hybrid hydrogen station.
Ask Wire offers an innovative solution for permanently removing carbon dioxide (CO2) from the atmosphere through a safe, efficient, and cost-effective method. Across three funding rounds, they have successfully raised a total of USD 6.2 million. Notably, 44.01 has garnered support from esteemed investors like Earthshot Prize and Breakthrough Energy Ventures, reinforcing their dedication to making a substantial environmental impact.
Fintech
The Central Bank of Oman (CBO) is actively involved in initiatives related to Open Banking and digital currency. The country's strategic plan includes various components such as accelerators, a regulatory sandbox, a cloud-computing framework, and an e-KYC initiative. Collaborating with Omantel, CBO has established a fintech accelerator to support promising startups.
Participating companies not only gain access to space at Omantel Innovation Labs but also benefit from a network comprising over 100,000 investors, corporates, and mentors.
Ompay, a Payment Service Provider, specializes in delivering fintech services through its digital wallet and payment gateway. Ompay serves as the parent company for the OMPay (Oman Pay) brand and Lamma Chat, which is Oman's pioneering super app offering convenient payment solutions.
Lamma Chat facilitates mobile payments through a digital wallet for consumers and enables merchants to receive payments via NFC, QR codes, point-of-sale systems, bank transfers, and online payment gateways. Having secured a Series A funding of USD 750,000, Ompay has emerged as a significant player in Oman's evolving fintech landscape.
Internet of Things (IoT)
eMushrif leads the way in pioneering IoT solutions, placing a key emphasis on logistics. Originating as a transport startup, eMushrif quickly pivoted by leveraging IoT technology to expand its operations into different sectors, including school and corporate transport. Additionally, eMushrif broadens its reach to international travelers by offering IoT wearables at all border crossings, seamlessly integrating IoT innovation into the logistics sector. With significant funding backing amounting to EUR 3 million, eMushrif is well-positioned for continued growth and progress.
Software and Data
ZabonEX facilitates seamless integration with diverse data sources, streamlining the process of developing and deploying interpretable machine learning models with a focus on precision. This platform advocates for a customer-centric approach, particularly benefiting Food and Beverage manufacturers and retail establishments. It aids in enhancing sales and minimizing waste through the implementation of dynamic distribution and intelligent sales strategies. Leveraging its machine learning capabilities, ZabonEX empowers businesses to maximize the value of their products while efficiently reducing food waste in distribution and sales operations.
The Rationale Behind Moving Startups to Oman
Situated strategically on maritime routes connecting Asia with Africa and Europe, Muscat plays a pivotal role in fostering trade connections and facilitating advanced technologies in port operations, logistics, supply-chain management, and supply-chain finance.
Oman boasts several free-trade zones, such as Duqm Free Zone, Sohar Free Zone, Salalah Free Zone, Maziona Free Zone, Innovation Park Muscat, and Knowledge Oasis Muscat. Businesses registered in Oman enjoy a favorable corporate tax rate of 15%, with no personal income tax, and goods move across the Gulf Cooperation Council (GCC) without customs duties. Invest Oman offers complimentary investment advisory services, and the country excels in Intellectual Property Rights, ranking at #4 in the MENA region and #32 globally.
Oman has entered into various trade agreements, including the U.S.-Oman Free Trade Agreement, granting U.S. investors equivalent rights to their Omani counterparts.
The Rising Omani Startups Programme facilitates programs, funding, and networking opportunities for emerging businesses, while the Oman Talent Hub provides valuable work experience in advisory and technology fields. Invest Oman actively promotes Oman as an ideal business base and extends soft-landing support. The Ministry of Higher Education, Research, and Innovation (MOHERI) ensures comprehensive higher education, contributing to developing a knowledge society.
Top 5 Startups and Companies in Oman
Goodilaz
Goodilaz allows users to post requests across various categories, similar to digital classified ads. These requests can be shared again, enabling other users to participate by either meeting the requirement or providing suggestions. It's a personalized form of social commerce.
Deliver_It
The concept involves implementing smart mailboxes in front of houses with specific features: a secure box for contactless delivery, password protection, optional sterilization, and no requirement to schedule delivery times. These solar-powered boxes utilize UV sterilization to ensure the safety of delivered items, particularly food.
Bridge Wallet
Payment Bridge, in development as an application and website, offers consumers seamless bill payments, phone top-ups, money transfers, and in-store/online purchases using advanced technologies like QR codes and NFC. For merchants, it facilitates online payments, aids service providers in receiving electronic payments, and streamlines transactions through automation. The system connects payment points with advanced features, enhancing overall functionality for both users and businesses.
Quick Parking APP
A parking app for shopping malls that integrates with IoT sensors for real-time updates. Utilizing a dynamic cloud database, users can access and update relevant parking space information seamlessly.
Sims solutions
This model, designed to enhance organizations through a predictable A.I. & M.L. evolution, prioritizes compliance and progression from initial stages to advanced A.I. It assesses the current situation, prioritizes measures, and monitors departmental progress, incorporating M.L. mechanisms for comprehensive HSE management. Fostering a culture of good practice encourages adaptive elements, achieves worker behavioral adjustments, and offers a valuable product for organizations to measure progress in various goals, including H&R mitigations, incident prevention, accident prevention, and return on investment.
Conclusion
Oman is actively fostering its startup ecosystem as part of its strategic vision for economic diversification, prominently outlined in Oman Vision 2040. With initiatives like the Oman Future Fund, the National Initiative for Artificial Intelligence, and the Rising Omani Startups Programme, the country is creating a supportive environment for innovation and entrepreneurship. The government provides tax and non-tax incentives, while various entities offer financial support, mentoring and collaboration opportunities.
Oman's focus on promising sectors like e-commerce, cleantech, fintech, IoT, and software/data further positions it as an attractive destination for startups. Overall, the nation's strategic location, free-trade zones and favorable business environment contribute to its appeal to emerging businesses.
