Doing Business In Qatar

Doing Business in Qatar

Doing Business In Qatar

Qatar, officially the State of Qatar, is a sovereign country located in Southwest Asia, occupying the small Qatar Peninsula on the north eastern coast of the Arabian Peninsula. Its sole land border is with Saudi Arabia to the south, with the rest of its territory surrounded by the Persian Gulf. A strait in the Persian Gulf separates Qatar from the nearby island of Bahrain, as well as sharing sea borders with the United Arab Emirates and Iran. Qatar is a hereditary monarchy. It is a high income economy and is a developed country, backed by the world’s third largest natural gas reserves and oil reserves.Qatar is one of the most prosperous countries in the world and has the fastest growing economy in the Gulf Cooperation Council (the GCC). Qatar’s real GDP compounded annual growth rate was13.9 per cent between 2007 and 2011.

Quick Points

Currency: Qatari Riyal (QAR) where 1QAR is $0.27 approx.
Official Language: Arabic (English is used commonly in business)
Population: Approx. 2 million (80% Population comprise of expats)
Religion: Main Religion of the State is Islam but there is also small population of foreigners such as Christians, Jews, Hindus, Bahais and others.


Qatar gained full independence in 1971 and has been ruled since June 1995 by the Emir His Highness Sheikh Hamad bin Khalifa Al-Thani. The hereditary successor to the Emir is the Emir’s fourth son, the Heir Apparent His Highness Sheikh Tamim bin Hamad bin Khalifa Al-Thani. The permanent Qatar Constitution (the Constitution) came into effect in 2005, replacing the constitution that had been created shortly after independence. The Constitution separates powers between the executive branch, which is comprised of the Emir with assistance from his cabinet (the Council of Ministers), the legislature (the Advisory Council) and the judiciary. The Constitution guarantees all residents of Qatar equality before the law, regardless of their origin, language, religion or gender.

Banking and Financial Services

The banking sector is supervised by Qatar Central Bank (QCB) and comprises of a combination of national and foreign banks. A total of 15 banks currently operate in Qatar, seven of which are Qatari owned institutions, including five commercial banks (Al Ahli Bank, Commercial Bank, Doha Bank, Grindlays Qatar Bank, and Qatar National Bank) and two Islamic institutions (Qatar Islamic Bank and Qatar International Islamic Bank and Masiat Al Rayan. Also represented in the local branches of foreign banks are Arab Bank, HSBC Bank, Mashreq Bank, Bank Saderat Iran, BNP Paribas, United Bank and Standard Chartered Bank. Qatar Industrial Development Bank was established 1997 and provides financing to small and medium scale industries. The insurance sector is one of the savings and investment facilities available within the country’s economic structure and participated with the national banks in the establishment of the privately owned companies. There are eight insurance companies currently operating in Qatar, in which four are joint stock companies, while the rest are representative agencies of overseas insurance companies.

Ministry of Business and Trade

The Ministry of Business and Trade (the MoBT) is Qatar’s key commercial and insurance regulator and the scope of its authority is wide-ranging. Among other things, the MOBT is responsible for the planning and execution of the State’s general budget, monitoring the Government’s accounts and expenditure, evaluating and implementing taxation policy, coordinating with the Qatar Central Bank with respect to monetary policy, approving new commercial registrations and approving the registration of trademarks.

Qatar Exchange

In June 2009, Qatar Holding LLC (QH), a wholly owned subsidiary of the QIA, and NYSE Euronext formed a strategic partnership. This came about following the US$200 million acquisition by NYSE Euronext of a 20 per cent stake in the Qatar Exchange (the QE) (known prior to the transaction as the Doha Securities Market or DSM). QH retained an 80 per cent stake in the QE. The QE currently lists equity securities only. As of January 2011, there were 42 companies listed primarily from the banking and financial services, insurance and industrial sectors.

Qatar Central Bank

The Qatar Central Bank (the QCB) was established in 1993 and operates in coordination with the Ministry of Economy and Finance. The QCB is managed by a board of directors and chaired by its governor. In its supervisory capacity, the QCB oversees the activities of all of Qatar’s commercial banks and non-banking financial institutions (with the exception of insurance companies) with a view to minimizing banking and financial risk in Qatar’s financial sector. The QCB conducts regular inspections of and reviews reports and other mandatory data submitted by commercial banks, including monthly capital adequacy compliance reports.

Qatar Financial Markets Authority

The Qatar Financial Markets Authority(the QFMA) was established in 2005 as an independent regulatory authority for Qatar’s capital markets. The QFMA is mandated to (i)regulate and supervise the QE and the securities industry in Qatar and(ii)implement a new regulatory framework for Qatar’s capital markets and securities industry based on international best practices.The QFMA’s primary objective is to ensure market integrity and transparency through impartial monitoring and independent regulation of Qatar’s capital markets. The QFMA also sets regulatory policy for the securities markets, drafts and issues relevant rules and regulations, oversees admission to listing and enforces relevant laws and regulations applicable to market participants.

Qatar Financial Centre Authority

The QFC was established in 2005 with the objective of attracting international financial service providers to Qatar. Unlike other financial centers in the Middle East, the QFC has no physical boundaries and QFC-registered entities may conduct business internationally and throughout Qatar. QFC-registered entities can locate anywhere in Qatar, subject to approval by the QFC and the Council of Ministers. Much of Doha is already authorized as a “QFC zone” and the authorization process is generally straightforward. The Qatar Financial Centre Authority (the QFCA) is the commercial arm of the QFC and is responsible for the licensing, registration and incorporation of QFC entities amongst other things. The QFCRA is the independent regulatory arm of the QFC. Any QFC entity that is engaged in a regulated activity (including banking, asset management and insurance activities) must be authorized to conduct such activity by the QFCRA. The QFCRA has a broad range of regulatory powers to authorize, supervise and discipline QFC firms and individuals.

Simple Partnership Company

A Simple Partnership Company is a company formed by two or more natural persons who are personally and jointly responsible for the liabilities of the company. The name of the company shall be formed by reference to the name of all the partners, or the name of one partner followed by the words “And Partners”. A company may have a special commercial name, provided it is connected with the fact that it is a simple partnership company. All the partners in a simple partnership company must be nationals of the State of Qatar. A simple partnership company should have a Memorandum of Association.

Single Shareholder Companies

Single shareholder companies are limited liability companies whose capital is fully owned by a single natural or corporate person. The liability of the owner is limited to the extent of the capital invested in the company. The capital of a single shareholder company should not be less than QR50,000. In other respects a single shareholder company is governed by the same regulations as Limited Liability Company.

Joint Partnership Company

A Joint Partnership Company is a company consisting of two types of partners:

  • Joint Partners who are empowered to administer the affairs of the company, and are jointly and personally responsible for the company’s liabilities.All the Joint partners in a joint partnership company must be nationals of the State.
  • Trustee Partners, who merely contribute to the company’s capital without being responsible for its liabilities except to the value of their shares in the capital. A Trustee Partner shall not interfere in the management of the company.

Joint Venture Company

A Joint Venture Company is a company formed by two or more persons. It is an un-incorporated entity, without liability against third parties and has no legal personality and is not subject to any registration procedures in the commercial register. A Memorandum of a joint venture may be proved by all evidential means including substantive and circumstantial evidence. The resolutions of a Joint Venture Company are decided by the unanimous vote of all the partners, unless stated otherwise by the Memorandum. If non-Qataris are partners in a Joint Venture Company, then the company is allowed to carry out only those business activities stipulated by law for non-Qatari.


Corporations can take the form of closed stock companies or public stock companies. The closed stock company may be 100% foreign – owned, while the foreign ownership of a public stock company is restricted to a maximum of 49%. Every company registered in Qatar should have its head office in the country.

Public Shareholding Company

A Public Shareholding Company is a company whose capital is divided into shares of equal value, which are transferable. Shareholders of a Public Shareholding Company are not liable for the company’s obligations except for the amount of the nominal value of the shares for which they subscribe.A Public Shareholding Company should have a minimum of five shareholders and in all cases the name of the company should be followed by the words “Qatari Public Shareholding Company” A Public Shareholding Company shall have a definite term, which should be indicated in the Memorandum of Association and in the Articles of Association, in accordance with a format issued by a Ministerial Decree. The fixed term of a Public Share holding Company may be extended by an extra ordinary resolution of the General Assembly. The capital of a Public Shareholding Company should not be less than QR 10,000,000/- (Ten Million Qatari Riyals).

Limited Shares Partnership Company

A Limited Shares Partnership Company is a company formed by two groups, namely:

  • Joint Partners comprising of one or more joint partners who are personally liable for the debts of the company.
  • Trustee Partners comprising of not less than four shareholding partners whose liability is limited to the value of shares held in the capital.

The company should have a Memorandum and Articles of Association signed by all founding partners. In all cases, the words “Limited Shares Partnership Company” should be added to the name of the company. For the joint partners, the company shall be governed in the same manner as a Simple Partnership Company and all the joint partners must be nationals of the State of Qatar. The company should have a minimum capital of QR 1,000,000/- (One Million Qatari Riyals), divided into shares of equal value that are transferable and indivisible and should be fully paid upon incorporation. The company must have a General Assembly composed of all joint and trustee shareholding partners. A Limited Shares Partnership Company is managed by one or more joint partners.

Types of Business

Foreign investment in the banking and insurance sectors is only permitted on a case by case basis upon the prior approval of the Council of Ministers. Foreign investment in commercial agencies and trading in real estate is not generally permitted.Foreign investors who wish to engage in engineering activities, including engineering consultancy, are governed by Law No. 19 of 2005 (Engineering Law). Under this law, foreign engineering firms are permitted to register temporary branches in Qatar. There are, however, strict registration requirements. If a foreign firm cannot meet these requirements, the Engineering Law states that foreign investors can establish a local engineering firm as a joint venture with a Qatari partner, with a maximum of 49 per cent foreign ownership. The registration requirements for engineering firms are regulated by the Urban Planning and Development Authority.

Incorporating or Registering within the QFC

Entities licensed by the QFC and operating under the auspices of the QFC may be fully owned by non-Qatari natural or legal persons. Full repatriation of profits and capital is expressly permitted for QFC entities. Entities wishing to operate from the QFC must be engaged in specific QFC-permitted activities.

Permitted Activities for QFC Entities

Only entities performing certain limited activities are allowed to operate within the QFC.
Permitted activities fall into two broad categories:

  • Regulated activities
    The QFCRA authorises QFC entities to conduct regulated activities from within the QFC. These regulated activities include activities relating to financial services, insurance reinsurance, asset management, funds administration, funds advisory, pension funds, the provision of credit, brokerage services, financial agency, corporate finance advisory and custodian services.
  • Non-regulated activities
    The QFCA may licence QFC entities to conduct permitted activities, which are considered non- regulated activities, from within the QFC. These non-regulated activities include ship broking, ship agency services, classification services, grading services, company administration services, the business of holding companies, the formation, operation and administration of trusts and professional advisory services (including accounting, audit, tax, consulting and legal services).

Temporary Branch or Representative Office

Under Article 3 of the Foreign Investment Law, a foreign company can open a temporary branch office in Qatar if the company is awarded a specific contract involving a project that contributes to public service or interest. In this situation, the Minister of Business and Trade can license the foreign company to conduct business in Qatar for the specific purpose of completing the contract. The license to operate the temporary branch office will expire once the contract is completed.A foreign company can open a representative office by filing an application at the MoBT. A representative office cannot conduct financial transactions in Qatar and its activities are limited to marketing and administrative functions.

Incorporating in Qatar Science and Technology Park (QSTP)

The QSTP is, for the time being, the only free zone in Qatar. The capital of companies registered in the QSTP can be entirely owned by foreign investors. QSTP companies are permitted to trade directly in Qatar without a local agent.Other free zone benefits include the absence of taxation and the ability to import goods and services free of any Qatari added tax or customs duties. In addition, rent for QSTP premises are highly subsidized. In order to incorporate or register in the QSTP, the majority of an entity’s activities must contribute to the advancement of science, technology or research and development. More than 20 companies are currently listed as operating in the QSTP, including Chevron, Cisco, GE, Microsoft, Rolls-Royce and Tata.

Licenses issued by the QSTP

  • Standard License:

Issued to businesses that incorporate in the free zone as a QSTP LLC or register as a branch office. QSTP LLCs must have at least two shareholders and a minimum capital of QR 200,000. These incorporated or registered businesses are entitled to all free zone benefits.

  • Restricted License:

Issued to various types of entities, which that do not qualify for the standard license. This license only provides limited free zone benefits, as designated by QSTP management.

  • Service License:

Issued to entities providing services to QSTP tenants. This license does not provide any free zone benefits.

Commercial Agency

If a foreign entity wishes to sell goods or services in Qatar but does not wish to maintain a physical presence in the country, it may enter into a commercial agency relationship with a Qatari natural or legal person. A commercial agency contract should, amongst other things, specify the products or services covered by the agreement, the territory of the distribution and the duration of the relationship.A commercial agency arrangement may be registered by the agent at the MoBT if the relationship between principal and agent meets certain criteria laid out in Law No. (8) of 2002 on Commercial Agents (the Commercial Agency Law).

Appointing a Distributor

A distributor may be appointed by a foreign investor to represent him in distributing and selling certain goods in Qatar. The distribution arrangement must be agreed in writing and include specific details regarding the limit of the distributor’s responsibilities, the fee, the geographical scope of the distribution arrangement, the term of the relationship and the use of intellectual property relating to the products that are the subject of the distribution arrangement.The distribution contract between the principal and the distributor must be for a term of no less than five years if the distribution contract requires the distributor to utilise showrooms, storerooms or to provide facilities for the maintenance of the products that are the subject of the distribution. The principal cannot appoint more than one distributor relating to the same product in the same geographic area.

Doing Business with the Public Sector

The Central Tenders Committee (the CTC) of the Ministry of Economy and Finance processes the majority of public sector tenders in Qatar. In addition, some Government entities, such as the Ministry of Energy and Industry, QP and the Public Works Authority, have internal tender committees.Bids presented by entities that are not registered in the Commercial Register at the Ministry of Economy and Finance and with the Qatar Chamber of Commerce and Industry (the Chamber of Commerce) can be discarded by the CTC. Preferential treatment is given to bids that include a high percentage of local content.

Import Regulations

Qatar is a member of the World Trade Organization and a party to various regional free trade agreements, most notably within the GCC. As a result of its participation in the GCC Customs Union, Qatar has been applying the GCC Common External Tariff Law No. (41) of 2002 that implements the GCC unified customs tariff in Qatar, imposing a 5 per cent tariff on the invoice value of most imported products.The GCC unified customs tariff has allowed exemptions for approximately 400 goods, including certain basic food products. Tobacco and manufactured tobacco substitutes are subject to a customs duty of at least 100 per cent.

Foreign Exchange Controls

Qatar does not generally have any foreign exchange controls or restrictions on the remittance of funds. Foreign investors are free to transfer profits and capital related to their investments, and proceeds resulting from the settlement of investment disputes, both into and out of the country.Law No. (28) of 2002 on Anti-Money Laundering criminalises money laundering and imposes sanctions against individuals and institutions committing this crime.

Property Ownership

In recent years, the laws regulating the ownership and lease of real estate in Qatar have become more liberal, allowing greater opportunity for investment by foreign persons. Different laws apply to: (1) foreign (non-GCC) individuals; (2) GCC citizens and (3) non- Qatari companies.Non-Qatari individuals can also obtain usufruct rights, which are registrable, for 99 years in certain industrial areas designated by the Council of Ministers and in residential areas under terms set by the Council of Ministers

GCC Citizens

GCC Citizens are permitted the same rights as other foreign individuals but are given additional privileges. GCC citizens are permitted to own up to three residential real estate assets, although the maximum size of these assets cannot exceed 3,000 square meters. GCC citizens can also own real property and residential units in investment areas designated by the Council of Ministers. Three investment areas have currently been declared: Lusail, Al Khuraj and Thaayleb Mountain.

Non-Qatari Companies

Not permitted to invest or trade in real estate. However, entities that are not 100 per cent Qatari-owned can lease real estate for investment projects for up to 50 years.


As a country with a very high percentage of expatriates (around 80 per cent of the total population), Qatar is generally accommodating to legal immigrants and visitors. Visas are available for business and tourist visits, transit and residency. Visitors from approximately 30 countries can obtain visit visas upon arrival in Qatar.For an employee of a company doing business outside the QFC, the company must register his or her employment contract with the Ministry of Interior before a residency visa can be issued. Each company is permitted a certain quota of residency visas. Employees with residency visas who earn above a threshold salary may sponsor family members for residency visas. Residency visas are valid for up to three years. Employees cannot work for anyone other than their sponsor and sponsorship cannot be transferred until the employee has worked for their original sponsor for at least two years.

Employment Law

Employment in Qatar is generally governed by Law No. (14) of 2004 (the Labor Law), which imposes certain minimum standards on working hours, vacation and public holidays, health and safety, workers’ committees, collective agreements and termination of employment.Employees excluded from the application of the Labor Law include employees of Ministries and public institutions, including the armed forces and police. Also excluded are workers at sea, domestic workers, casual workers and working members of the employer’s family.The Government’s aim is to increase the proportion of Qataris in the manufacturing sector to 50 per cent by 2020. Non- Qatari workers will only receive work permits if they have a residency permit and there is no suitably qualified Qatari worker available to carry out the work.

Intellectual Property

Over the last few years, Qatar has taken steps to strengthen its protection of intellectual property (IP) rights. Qatar is currently not a signatory under the Madrid Convention.The Ministry of Economy and Finance is responsible for enforcing IP laws and regulations.

  • Patents:

Patents are protected by Decree-Law No. (30) of 2006 on Patents Law, which provides patent protection for 20 years.

  • Copyrights:

Copyrights are protected by Law No. (7) of 2002 on the Protection of Copyright and Neighboring Rights (the Copyright Law). The Copyright Law provides protection for 50 years after an author’s death, or after the first date of publication for anonymous or collective works.

  • Trademarks:

Trademarks are protected by Law No. (9) of 2002 on Trademarks, Commercial Indications, Trade Names, Geographical Indications and Industrial Designs (the Trademarks Law). Once registered, trademarks are valid for 10 years and can be renewed indefinitely.Foreign applicants have the same rights as Qataris under the Trademarks Law, provided that they are nationals of a state that grants Qatar reciprocal treatment.

Direct Taxes

Tax shall be levied on a taxpayer’s income arising from activities in the State of Qatar. The term activity includes:

  • Profits realised on any project executed in Qatar
  • Profits realised from the sale of any of the company’s assets
  • Commission due to agencies or arising from representation agreements or commercial agencies whether such commission is realised in or outside the State of Qatar
  • Fees paid for consultancy, arbitration or expertise and other related services
  • Rent from property
  • Amounts received from the sale, rent or the assignment of a concession and the use of a trade mark, design, know how or copyright;
  • Amounts received from debts previously written-off; Profits realised on liquidation. In addition, interest and other bank income received outside the State of Qatar will be subject to tax in Qatar if this income relates to amounts arising from the taxpayer’s activities in Qatar.

Direct Taxation of Individuals

There is no personal taxation system for income, capital gains, gifts or inheritances in Qatar and, furthermore, no requirements to file any form of tax return.

Indirect and Local Taxes

Apart from the customs duties and fees referred to earlier, there is no indirect taxation system in Qatar. Local taxes, which appear on electricity bills, are charged at 10% of the monthly rent paid for the property.

Tax Administration

The Gregorian calendar is used for Qatar income tax purposes, but a taxpayer may apply to prepare his financial statements for a twelve month period ending on a day other than 31 December.

Filing Requirements

Tax declarations should be filed within 4 months of the end of the financial period. The filing period can be extended at the discretion of the Department of Taxation at the Ministry of Economy and Commerce.

Tax Treaties

Qatar has signed double tax treaties with Algeria, Bangladesh, France, India, Morocco, Romania, Russia, Senegal and Tunisia. Several countries, including Japan, the United States and the United Kingdom, allow some unilateral relief against their own taxes for Qatar income tax paid

The Role of the Auditor

Auditors, as in the case of other businesses, are licensed to operate by the Ministry of Industry and Commerce through the commercial registration system. Legislative Decree No: 7 of 1974 regulates the auditing and accounting profession. All quoted companies, banks, insurance companies and limited liability companies are required to have their financial statements audited and must provide a copy to the Ministry of Industry and Commerce. The QCB has the right to approve the appointment of auditors by the bank’s shareholders.

The auditor’s report must be read out in the annual general meeting, and must affirm that:

  • The financial statements, and the financial information contained the Report of the Directors, are in accordance with the books and records of the company and that proper books of accounts have been kept.
  • Stocktaking (where applicable) has been conducted in accordance with recognized procedures. The company has complied with the provisions of the Commercial Companies Law and with its articles of association in all material respects.
  • Dividends proposed by the board of directors of financial institutions must be approved in advance by the QCB and then by a majority of shareholders in the annual general meeting.

Auditing and Accounting Practices

There is no officially recognized body of auditing and accounting standards in Qatar, although certain specific accounting policies are laid down by the QCB, for example, in its annual circular to banks and money changers. The Insurance Law also stipulates certain accounting practices. The Ministry of Industry and Commerce requires all accounting firms licensed to practice in Qatar to adopt International Standards on Auditing and International Accounting Standards in performing their work. However, there will continue to be issues which are not addressed, or require amplification, and in these circumstances, reference will probably continue to be made to the US and UK authoritative statements, guidelines and exposure drafts.

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