Advantages of Doing Business in Qatar

Business Opportunities in Qatar

The natural gas and fossil fuel industries have historically dominated the economy. However, Qatar's business environment has recently diversified, with players from various sectors establishing a presence. These sectors include tourism, technology, construction and manufacturing, information technology, healthcare, agriculture, education, media, and consulting services.

Setting up a company in Qatar, while lucrative, can also be a lengthy process for foreigners who are unfamiliar with the business rules and regulations.

Benefits of Setting Up a Business in Qatar

A unique aspect of Qatar's business environment is the Qatar Business Zone. While business owners can set up inside or outside the free business zone, it is vital to know the difference between the two before deciding where to establish your business in Qatar.

The two zones have very different laws, policies, regulations, and compliance requirements applicable to companies. The free business zone has advantages such as full foreign ownership of shares, no foreign exchange restrictions, and no income tax, corporate tax, or tax on foreign trade. Most business owners choose the free business zone when they decide to set up a business in Qatar. This zone accommodates technology, logistics, maritime, manufacturing, and even petrochemical businesses.

Setting up a company in Qatar comes with many advantages, in addition to access to the free business zone. Here are several benefits of doing business in Qatar:

• Qatar has a highly developed business infrastructure and an educated yet inexpensive workforce.
• There is no income tax on wages in Qatar.
• No tax is applied to income earned from exports.
• Qatar's corporate tax rate is as low as 10%.
• Foreign business owners can transfer all their earnings to their home country.

Supportive banking services that understand the needs of business owners are available.

Requirements for Setting Up a Business in Qatar

To begin, a business owner must meet various conditions set by the Commercial Companies Law to do business in Qatar. These requirements include:

• A Qatari co-founder.
• Proper commercial registration with the Ministry of Commerce and Industry (MOCI).
• All legal contracts must be in Arabic and English.
• A minimum capital of QAR 200,000.
• At least two or more shareholders, with Qatari shareholders owning 51% of the company.

Types of Business Structures in Qatar

As in most countries, there are different business structures and permitted companies in Qatar. These are:

• General partnership company
• Limited share partnership company
• Joint partnership company
• Public shareholding company
• Holding company
• Joint venture
• Limited liability company
• Branch of a foreign company
• Representative trade office
• Real estate
• Commercial agency

Perhaps the most common business structure chosen by most business owners in Qatar is the limited liability company (LLC).

• An LLC established in Qatar requires a minimum capital of QAR 200,000, with Qatari citizens owning 51% of the shares in the company. It does not matter if it is a single Qatari partner or multiple Qatari partners who own the majority shares.
• The profit percentage in the company may not necessarily reflect the shareholding.
• An LLC can only obtain a trade license if it has a suitable office space.
• An LLC in Qatar cannot undertake investment-related activities such as banking or financing on behalf of the government.
• An LLC is subject to a 10% corporate tax on its total profits earned in a financial year.
• An LLC can enter into an unlimited number of contracts simultaneously.

Company Registration Process in Qatar

Company registration in Qatar can be a long process due to detailed documentation. Not only is it detailed, but the documents must also be submitted to the Qatari Ministry of Economy and Commerce within strict deadlines.

Initially, a company must have three essential documents for the company registration process in Qatar.

• A Commercial Residence or CR is a document issued by the Ministry of Economy and Commerce. It specifies a company's legality, name, and ownership. It is easy to obtain once you have the trade name and articles of association listing all shareholders and their shares.
• A trade license depends on the type of business structure a company chooses. To obtain a trade license, it is necessary to have an MEC-approved office space. To get a trade license, the company needs to submit the application form, ID copies of each business official, the CR, articles of association, photos of the office building and space from the outside and inside, the building completion certificate, and the owner's ID and lease agreement.
• A computer card (also known as an Establishment Card) is a document that specifies the company's signing authority. It is mandatory for Qatari members to be listed on the computer card.

A company must also obtain the correct signage license, an immigration certificate if the owners are foreign, and any other licenses required for operations to begin. Additionally, the business owner must possess a certificate of experience.

In addition to these licenses, there are several other requirements for company registration in Qatar. These include:

• Residence permits for foreign business owners.
• A valid bank account in the company's name at any Qatari corporate bank.
• Registration of company employees with the Ministry of Labor.
• Registration with the public tax and revenue departments.

How Much Does It Cost to Set Up a Company in Qatar?

There are various costs involved in the different steps of the company setup procedure in Qatar. For example -

• The company must show a minimum capital of QAR 200,000.
• If the chosen name does not have an Arabic meaning when obtaining a trade name, the business must pay an extra QAR 1,000.
• The cost of a commercial residence can be between QAR 1,500 and QAR 7,000 annually.
• Establishment costs are over QAR 30,000 in the first year.
• From the second year onwards, annual company costs are over QAR 5,000.
• The average cost of Qatari participation is over QAR 100,000, including the company's establishment, bank account, office address, and manager's residence.

As shown in the table below, various trade licenses have their own costs:

Are Foreigners Allowed to Set Up Businesses in Qatar?

According to Qatar's trade laws, a foreign investor can only set up a business in Qatar if they have at least one Qatari partner and meet the minimum capital requirement.

There are various visas through which a foreigner can do business in Qatar. These include:

• A 72-hour business visa is issued on arrival and used for short business visits.
• Foreign workers use a business visa for temporary contracts, as it is only valid for three months.
• An investor visa is used by former patent holders who invest in commercial ventures in Qatar. Investor visa holders can stay in Qatar without any sponsorship but must show documents regarding property ownership, good conduct, and medical fitness.

Government Assistance to Foreign-Owned Businesses

The Qatari government provides extensive support to businesses in the agriculture, education, health, tourism, natural resources, information and technology, and energy and mining sectors. They are offered incentives by the state and are even exempt from taxes for ten years. Moreover, the Qatari government also provides incubation centers and free economic zone provisions to attract foreign investors and business owners.