Qatar provides a great environment for establishing a business there. Over the past few years, it has had strong economic growth and high GDP numbers. The country serves as a point of entry for other Middle Eastern nations. Qatar has consistently given business investors chances to explore, invest in, and expand in a variety of ways. Depending on the requirements of the firm, various corporate structures can be created. Because Qatar is on the verge of becoming one of the world’s key hubs for business setup, doing business there is a wise choice for foreign investors and business owners. Continue reading to learn how to set up a business in Qatar.
About Qatar as a Fantastic Business Country
Located on a peninsula that projects into the Arabian Gulf, Qatar is a sovereign and independent state in the Middle East. Qatar has become one of the most significant producers of oil and gas in the world since gaining independence from Britain in 1971. As part of its strategy for economic diversification, the Qatari government is currently moving forward with expansion ambitions. As part of new initiatives to promote foreign direct investment in 2019, laws were changed to permit 100% foreign ownership of businesses in the majority of industries, with the exception of financial services and insurance. The Investment Promotion Agency, a new government agency, was established to simplify the application process for companies looking to locate in the country.
Qatar has invested hundreds of billions of dollars in transport systems, stadiums, and other infrastructure as the host of the 2022 FIFA World Cup. These initiatives, which also include the opening of the Doha Metro and upgrades to motorways, are having a positive impact on locals. Government planners made sure that the occasion leaves a positive economic impact. It is crucial to get the company setup procedure in Qatar right from the start because it might be challenging.
Benefits of Starting a Business in Qatar
The Qatar Business Zone is one distinctive feature of the business environment in Qatar. Before choosing where to launch a business in Qatar, entrepreneurs must understand the differences between setting up a company inside or outside the free business zone. The laws, policies, regulations, and compliance that apply to businesses are considerably different between the two zones. Benefits of the free business zone include no restrictions on foreign currency, full foreign ownership of shares, and the absence of corporate tax, income tax, and foreign trade taxes. The free business zone is the location of choice for most entrepreneurs looking to launch a business in Qatar. Maritime, technology, manufacturing, logistics, and even petrochemical companies are located in this area.
Aside from having access to the free business zone, there are many advantages to establishing a business in Qatar. Here are just a few of the many benefits of setting up a business in the country:
- Foreign entrepreneurs are allowed to send all of their profits home.
- Qatar is proud of its skilled but low-cost labor force and its highly developed corporate infrastructure.
- Helpful financial services are available out there that are aware of the requirements of business owners.
- The income from exports is not taxed.
- Qatar has no income tax on earnings.
- The corporate tax rate in Qatar is under 10%.
Requirements for Company Registration in Qatar
Incorporating a business in Qatar involves a little bit lengthy and complicated process. A business owner must first fulfill a number of conditions set forth by the Commercial Companies Law in order to conduct business in Qatar. These requirements consist of:
- Registration of a business in a proper manner with the Ministry of Commerce and Industry (MOCI).
- Arabic and English must both be used in legal contracts.
- A minimum of two or more owners, with 51% of the corporation owned by Qatari stockholders.
- A QAR 200,000 minimum share capital is required.
- A founding partner from Qatar.
Required Documents for Company Setup in Qatar
Due to the extensive documentation required, company registration in Qatar can be a time-consuming process. Not only must the paperwork be thorough, but it must also be presented to Qatar’s Ministry of Economy and Commerce within strict timelines. To begin the company registration procedure in Qatar, a company must obtain three basic documents. They are as follows:
To begin the business setup procedure in Qatar, a company must obtain three basic documents. They are as follows:
The Ministry of Economy and Commerce issues a document known as a commercial residence or CR. It specifies the ownership, legality, and name of a corporation. It is simple to get once the trade name and articles of incorporation listing all shareholders and their shares are in place.
A trade license is granted based on the type of business structure chosen by the corporation. To have a MEC-approved office space, you must first obtain a trade license.
To obtain a trade license, the company must submit
- A rental agreement
- An application form
- Articles of incorporation
- Copies of each business authority’s identification
- Photos of the office building
- A building completion certificate
- Office space from the outside and inside
- The owner’s ID
A computer card is a document that identifies the company’s signing authority. Qatari members are required to be listed on the computer card.
The firm owner must have a certificate of experience. In addition, a company must also obtain an immigration certificate if the owners are foreigners, the proper signage license, and any other licenses needed to commence business operations.
There are a few additional prerequisites for company registration in Qatar in addition to these licenses. They are as follows:
- A legitimate bank account in the company’s name with any corporate bank in Qatar.
- Residency permits for international entrepreneurs.
- Registering with the national revenue and tax departments.
- Firm employee registration with the Ministry of Labour.
To establish a foreign company in Qatar, you need to submit the following documents to the Ministry of Economy and Commerce:
- An approved power of attorney to a Qatari head or manager
- Two copies of commercial registrations and service agent agreements
- Two copies of the contract signed by the foreign company and the Qatari government
- Two copies of the memorandum of the certificate or article of association of the international business
- An application
To set up an LLC, you need to submit the following details:
- Company purpose, type, office location, and name
- Form to be followed in the company’s notifications to the partners
- Addresses, names, residences, and nationalities of the partners
- Assignment of shares conditions
- Amount of capital share of all partners, their value, and in-kind shares
- Duration of the company
- Names and nationalities of the company’s managers, whether they are partners, or if their names are mentioned in the company’s incorporation documents
- Distribution method of losses and profits
- Name of every supervisory board member
Also, you need to make sure that all of these documents before submission are translated into the Arabic language.
Business Setup in Qatar – Complete Process
The following procedure is required for business setup in Qatar:
The Process of Application
You need to either find a Qatari business partner or submit an application to the Ministry of Business and Trade for a 100% owned company.
Choose Business Activity and Trade Name
Then, you need to approach the Qatar Company Registry for registration of the company’s name and selected business activities.
Submit the Application
Post that, a registration application must be delivered to the Chamber of Commerce.
To get a municipal license and an immigration card, you must draft and produce a Memorandum of Association and articles of association, and other required paperwork. The AOA or MOA must subsequently be attested by the appropriate Ministry of Justice department. The tax certificate and trade license cannot be applied until the MOA or AOA has been confirmed and verified by the authorities.
If you have opted for a mainland company, you must list its address for a commercial office block next to its name.
Issue the License
This step is quite important in the process. In order to receive a trade license, activity approval is necessary. After getting approvals for business activities, you can apply for and obtain a trade license.
After obtaining the trade license, the business can apply to the interior ministry for an establishment card or a computer card.
Open a Bank Account
Your business needs to open a bank account as well. For that, you must deposit a minimum of QAR 200,000.
Registration with the Public Revenue and Tax Authority
Register and obtain a TIN (Tax Identification Number) with the Public Revenue and Tax Authority.
Obtain a Company Seal
Design, create and get a company seal for your business. It is a requirement.
Issue Registration Certificate
It is necessary to obtain the Company Registration Certificate following the completion of the aforementioned steps.
Types of Business Structures in Qatar
A foreign corporation or investor might establish a business in Qatar in a variety of methods. The region is home to a number of free zones, including the Qatar Financial Centre, the Qatar Free Zone, the Qatar Media City, the Ras Bufontas Airport Free Zone, the Qatar Science and Technology Park (QTSP), and the Umm Al Houl Sea Port Free Zone.
Qatar is eager to catch the attention of businesses and industries that will support economic diversification, and economic growth, and promote prosperity.
The advantages listed below are available to businesses that establish in Qatar Free Zone:
- Complete access to Qatar’s network of double taxation agreements with more than 65 countries
- Income and corporate taxes are zero
- Residence visas are available
- 100% foreign ownership across several countries
- There are no customs fees
- Options for structuring branches or LLCs
- Effective data protection and intellectual property laws
- Access to capital for investments
Trade Representative Office, Limited Liability Company (LLC), and Foreign Branch Office are also permitted to set up in Qatar. The number of businesses establishing operations on the Mainland with a 51% local partner agreement has recently increased throughout the country. A business entity’s operations are greatly improved by having the ideal partner. Try to find some agency that can help reduce risk by offering choices for Corporate Sponsorship and reliable local partners.
Just like in various other countries, Qatar also has a variety of legal business structures and companies in the country. These legal entities are:
- General partnership company
- Real estate
- Limited share partnership company
- Joint partnership company
- Holding company
- Commercial agency
- Joint venture
- Limited liability company
- Branch office of a foreign company
- Public shareholding company
- Representative trade office
The most frequently chosen business structure by most Qatari business owners is a Limited Liability Company (LLC). The following is some information concerning LLCs in Qatar:
- A limited liability company created in Qatar requires a minimum capital of QAR 200,000, with Qatari nationals owning 51% of the company’s shares. It makes no difference if the majority of shares are held by one or several Qatari partners.
- A trade license can only be obtained by an LLC if it has adequate office space.
- In Qatar, an LLC cannot engage in investment-related activities such as government financing or banking.
- The company’s earnings percentage cannot reflect its shareholding.
- An LLC is subject to a 10% corporate tax on its total profits for the fiscal year.
- An LLC can carry out an unlimited number of contracts at the same time.
Details of other business entities include:
Wholly Foreign-owned Company in Qatar
Foreigners are allowed to do a wholly foreign-owned company formation in Qatar only
- After getting approval from the Ministry of Business and Trade
- In specific industries as per allowed in the Qatar Foreign Investment Law of 2010
The Law makes no reference to an official paid-up capital requirement, and in actuality, the Ministry of Business and Trade establishes the minimal required amount during the review process. The following sectors accept foreign direct investment:
- Education services
- Consultancy services
- Agriculture and exploitation of natural resources
- Healthcare services
- Leisure and entertainment
- Telecommunication services
- Manufacturing activities
if you plan to hire local talent, make a sizable investment, and/or go forward with a technology transfer in the months after forming the company, only then you should establish a totally foreign-owned company in Qatar. Actually, only significant multinational corporations are given approvals from ministerial authority to conduct local business through a completely owned subsidiary.
Joint Venture Company in Qatar
Foreigners who do not meet the requirements for registering a company with 100% foreign ownership can choose to establish their company as a joint venture. The Ministry of Business and Trade does not need to give prior authorization for foreign shareholdings of up to 49%.
The particular business operations that the company will be conducting might have a major impact on the minimum paid-up capital for a joint venture. Create a business plan for government evaluation, and confirm that you have the recommended capital to register your business on time.
The form of business entity that foreigners looking to conduct business in Qatar most frequently set up is a joint venture company. Such a business entity is best for numerous manufacturing and commerce business ventures.
Free Zone Company in Qatar
There are currently two special economic zones in Qatar that are made for projects involving foreign investment.
- The Qatar Science and Technology Park accepts proposals from research and development companies.
- The Qatar Financial Centre focuses on businesses that provide insurance, financial, and banking services but is also open to other service providers, such as:
- Professional services
- Shipping services
- Management services
While a business registered in one of these special economic zones may have 100% foreign ownership and be eligible for a number of tax incentives, it is also required to comply with strict registration criteria, such as
- Submitting a feasibility study to the Qatari government authorities
- Greater paid-up capital amounts
It is advised for individuals who will be making a considerable investment in the sectors targeted by such zones and moving forward with technology transfers in the months after company formation. Only these initiatives or projects are approved for free zone registration.
Conducting Business in Qatar with a Foreign Entity
Branch Office in Qatar
According to Qatari law, international businesses can only register branches after winning government contracts to provide public services. The branch office will be fully taxed in Qatar. Prior to branch registration, approval from the Minister of Business & Trade is necessary.
Yes, it is feasible to renew the branch if new contracts are given to it. But the branch’s duration depends on the duration of the contract.
Local customers of the branch will be required to deduct corporate income taxes and other taxes from their payments to the branch because the branch is not considered a permanently established business entity by the Qatari government. After the contract is finished and the branch provides a final tax return, these funds may be returned.
If you are a part of the above-mentioned category, register a subsidiary rather than a branch. Other than that, you should be aware that setting up a branch in Qatar is typically not a good way to speed up the establishment process in regulated fields requiring licenses, such as finance, banking, insurance, and more.
International Engineering Consultancy Office (IECO) in Qatar
The Qatari Government offers an exemption for the registration of branches by international engineering businesses, subject to approval by the authorities. International companies’ branches may only be registered y(see previous entity for further information). Customers of an IECO are not required to deduct withholding tax from their payments since, in contrast to a conventional branch, an IECO is regarded as a permanent establishment.
Such a type of business can only be registered to offer engineering services. In the real world, the government will only permit the registration of an IECO upon the request of the biggest and most recognizable companies.
Representative Office in Qatar
Foreign businesses may register representative offices in Qatar under local laws on behalf of a parent company. These business firms will solely work to grow the parent company’s interests in Qatar. They will not engage in any revenue-generating activities. It is necessary to obtain prior approval from the Ministry of Business and Trade.
Entrepreneurs that don’t want to do business with Qatarr customers should register a representative office as it is the best option for them.
Doing Business via an Agency Agreement in Qatar
There is no requirement to establish a new company with this option. You can opt-in to work with a commercial agent if you don’t:
- Invest a substantial capital amount
- Want to hire Qatari shareholders
Business Culture in Qatar
If you are kind and patient, your life as an investor in Qatar will be far easier than others. If you ask an Arab for guidance, they will typically be nice and helpful because they regard this as a sign of respect. Dealing with Arabs, however, also implies that you will have to put up with tough negotiations because they are skilled negotiators. As a result, it might be challenging for an outsider to understand Qatar’s business culture.
It’s crucial to understand that responses like “I will think about it later” could indicate that the agreement won’t advance. As Arabs hardly ever express a direct “no” to an offer, it is preferable to pay close attention to all the signals given to you.
Opportunities in Qatar
It is strongly advised that you conduct in-depth research on the target area and your industry. Research of the competitors, market circumstances, and expected outcomes are necessary components of a workable company plan. Keep in mind that a credible strategy will likely receive greater support from the local Kuwaitis.
Although gas remains Qatar’s top objective for economic growth, the government has been striving to diversify the economy by providing incentives to get the attention of outside investment, companies, and talent. Particularly in the industries of manufacturing, tourism, education, healthcare, agriculture, information technology (IT), consulting services, and other services relating to media, culture, and sports, the State assists business entities with quick access to top suppliers and markets.
The first quarter of 2019 saw 722.6 billion Qatari riyals (U$199.7 billion) in foreign investments coming into the country, or 67.9% of all investments made by Qatar, according to the country’s planning ministry.
Is Qatar a good place to start a business?
Yes, Qatar is a good place to start a business.
How do I set up a company in Qatar?
Follow the defined process to set up a company in Qatar.
Is Qatar open for business visas?
You are allowed to visit Qatar on a business visa on a temporary basis.
How long is Qatar business visa valid?
- 72-Hour Business Visa is valid for 72 Hours.
- 30 Days Business Visa is valid for 30 Days
- 90 Days Business Visa is valid for 90 Days
Please Note: We do not provide any assistance regarding business setup in Qatar. However, If you are looking to start your business in the UAE, get in touch with RIZ & MONA CONSULTANCY.