ESTABLISHING A BUSINESS IN QATAR

Acknowledgement.

A Guide to Setting Up a Business in Qatar

Qatar Business Handbook

To conduct business in Qatar it is necessary to register a company. Non-Qatari nationals are not permitted to own businesses and must have a Qatari owner who must own at least 51% of the company.

Whatever your situation the best advice is to take good professional advice to guide you through the labyrinth of legalities and procedures... and do this early early, before you start spinning your wheels in the wrong direction.

Your agent / sponsor / distributor / intended partner will be able to help and will almost certainly be happy to explain the "ins-and-outs" of the options and procedures. However, as always, be cautious. Taking third party advice is a good idea. If your intended partner or sponsor does get seriously upset because "you don't trust his advice", then maybe you want to reconsider the whole arrangement and his suitability anyway.

In recent years there has been a surge in new legislation all designed to bring the commercial environment in Qatar into line with what the international business traveller would expect. The following highlights the laws that would most have a bearing on establishing a business in Qatar

The Business Law

A list of the laws is as follows. PDF copies of these in English can be downloaded from www.investinqatar.com.qa.

Law No. 13 of 2000: Qatar’s Investment Law Regulating the Investment of Foreign Capital in Economic Activities.
Decree Law No.(31) of 2004 on Amendment of some provisions of Law No.(13) of the year 2000 on Organization of Foreign Capital Investment in Economic Activities
Law No.(2) of 2005 on the amendment of some provisions of law No.13 of 2000 on Organization of Foreign Capital Investment in the economic activities.
Law No. (5) of 2002 Commercial Companies Law
Law No (8) of 2002 on Organization of Business of Commercial Agents
Law No. 7 of 2002: Law on the Protection of Copyright and neighbouring rights
Law No. 9 of 2002: Law on Trademarks, Commercial Indications, Trade Names, Geographical Indications and Industrial Designs.
Law No. 30 of 2004 Regulating Control of Accounts
Law No. 5 of 2005 on Protection of Secrets of Trade

Obviously there has been little opportunity for the new and amended laws to be tested in the courts and therefore the advice holds even more strongly to get good, qualified, legal advice.

OPENING MOVES

Pleasantries follow and they can be as inane as you like but don’t ask about wife and family – you don’t know them well enough yet. Keep it general. Soccer or the weather is always an opener. Show your interest in the country by mentioning some local news from the morning paper.

You will be asked what you would like to drink. The opportunities are seemingly endless from water through various types of tea, coffee and infusions to Arabic coffee. Whilst an acquired taste, the visitor should have one cup and even two if enjoyable. Signify that you have had your fill by shaking the little cup when the coffee man comes by. This sounds tricky but is easily mastered. Say “shukran” (thank you) to the tea-boy. It shows respect and is often noted by the host.

The Permitted Company Structures.

Local Joint Venture Company

This is the famous 51 / 49 % arrangement where the local (Qatari) partner must hold a minimum of 51% of the shares in the business. The foreign partner frequently runs the business while the local partner contributes with administration and support in the market and the majlis.

Branch of a Foreign Company

A foreign company may, by issue of Ministerial Decree (through the Ministry of Finance, Economy and Trade), establish a branch in Qatar to invest monies for economic development purposes, to facilitate the performance of a public service or to achieve a public utility in selected fields – industrial, agricultural, tourism etc. Branches are usually only put in place for a specific project and are wound-up at the end of that project.

Joint Liability Company

A Joint Liability Company is one consisting of two or more partners whereby the partners are personally and jointly responsible for the company's obligations:

Partnership in Commendam

A Partnership in Commendam is a company consisting of two types on partners:
Simple partners who are empowered to administer the affairs of the company and are jointly and personally responsible for the company's obligations.

Commandite (sleeping) partners merely contribute to the company's capital without being responsible for its obligations except to the value of their shares in the capital.

Limited Partnership in Shares

A Limited Partnership in Shares is a company consisting of one or more simple partners (personally responsible for the company's obligations) and at least ten shareholding partners.

Limited Liability Company

A Limited Liability Company (LLC) derives its name from the partners' limited liability towards the company's obligations. A limited liability company must have at least two partners and not more than thirty. (Note: An LLC may not engage in the business of insurance, banking or investment of funds on behalf of others.)

Shareholding Company

A shareholding company consists of an unlimited number of shareholders and must be registered with a name derived from its objectives.

Taxation

Taxation is covered by Law 11 of 1993. In general the law provides that any business activity carried out in Qatar will be subject to tax. Income tax is levied on partnerships and companies operating in Qatar whether they operate through branches or in partnerships with foreign companies. Tax is not levied on Qatari owned business enterprise, but the foreign partner must pay tax on his share of profits.

Law No 9 or 1989 provides that nationals of the GCC states be treated as Qatari citizens for income tax purposes and thus these companies also pay no income tax.

Other Considerations

There are many aspects of embarking on an overseas venture that cannot be simplified with a few trite phrases in an article. Detailed knowledge and understanding are essential and the best advice (not wishing to sound like the literary version of a cracked record) is get a professional to give you good advice. The following is a list of “don’t forget” headings which will undoubtedly save or cost you money ...depending on whether you get it right or wrong!

Workforce

With such a small native population there are few opportunities to employ host nation nationals. Generally the work force is imported. Skills and abilities are variable and immigration rules, based on a desire to manage a balanced spread of nationalities, often means visa and residence permits for the people you want are not readily available.

Salaries

Less than you would imagine but don't forget to add on the additional costs like airfares, housing, utilities, telephones, schooling, local transport, medical, end of service gratuity etc. etc. There are no personal income taxes, social insurance or other statutory deductions from salaries and wages paid to individuals in Qatar.

Housing

A full range of possibilities for housing exists but they all cost money.

Medical

Medical facilities are plentiful, not expensive and of a good quality. Make sure that you provide all your staff with the local medical card, which costs only QR100, although western expatriates will probably expect private medical cover with medical repatriation costs covered as well.

Time

Whatever you do allow for plenty time. The old adage that time is money was never so true. Things won't go smoothly.

David Chaddock …

... began life as an engineer before finding his true vocation as an international Businessman. He has worked in developing markets for nearly four decades, starting in West Africa and migrating (via the far East) to the Middle East in 1976. Tasked with opening and expanding new markets for English, American and French multi-national manufacturing companies he brought considerable experience to Qatar where he has assisted in and witnessed Qatar’s dreams come true.

Working for Stacey International he has authored their Qatar edition in the Gorilla Guide series of “business traveller’s handbooks” and revised and edited their major coffee table book “Qatar”.

Substantial discounts are available on David's books for bulk buyers - see Qatar.pdf for details.

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