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| Doing Business in Qatar |
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About Qatar
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| The State of Qatar is a sovereign and independent state in the Middle East, occupying a peninsula that juts into the Persian Gulf. Since its complete independence from Britain in the 20th century, Qatar has emerged as one of the world's most important producers of oil and gas. It is an Islamic State whose laws and customs following the Islamic tradition. Since 1995, the country has been governed by Sheikh Hamad bin Khalifa Al-Thani, the eighth Emir from the Al-Thani family.
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The law No (5) of the year 2002 regulating the commercial companies and hereinafter summary of the terms of establishment of companies in Qatar.
Limited Share Partnership Company:
It has at least one or more joint partners and at least four trustee shareholding partners. The minimum share capital of the company is 1,000,000 QR.
(Read Law (5) of the year 2002 articles (206)-(224)).
Limited Liability Company:
Is the most commonly used business entity in Qatar.
(Read Law (5) of the year 2002 articles (225)-(260)).
Holding Companies:
A holding company which must be a shareholding company or limited liability company and which has financial and management control on the companies by owning at least 51% of that company.
The minimum capital should be 10 million QR.
(Read Law (5) of the year 2002 articles (261)-(266)).
Simple Partnership Company
Is the most basic form of commercial arrangement for two or more individuals to combine together for the purpose of commercial activity in Qatar. The partners have unlimited liability and the trade name of the partnership company will reflect the names of the partners.
(Read Law (5) of the year 2002 articles (19)-(43)).
Joint Partnership Company
Is similar to a simple partnership company however, a joint partnership company will have two classes or partners.
1- Joint Partners.
2- Trustee Partners.
(Read Law (5) of the year 2002 articles (44)-(51)).
Joint venture Company
Is an entity comprised of two or more persons that combine to carry out a project. The joint venture company provided for in the law is an unincorporated entity without legal personality.
(Read Law (5) of the year 2002 articles (52)-(60)).
Public Shareholding Company
The public shareholding company is also known as a joint stock company or Qatari shareholding company. The law recognizes different variants of the public shareholding company including:
1- Public shareholding company- open.
2- Private or closed public shareholding company.
(Read Law (5) of the year 2002 articles (61)-(205)).
The Investment Law No. 13/2000 is the primary legislation governing foreign investment. Foreign investment is generally limited to 49 percent of the capital for most business activities, with a Qatari partner(s) holding at least 51 percent. However, the law allows, upon special government approval, up to 100 percent ownership by foreign investors in certain sectors, including: agriculture, industry, health, education, tourism, development and exploitation of natural resources, energy, or mining. Qatar amended the law in 2004 to allow foreign investment in the banking and insurance sectors upon approval of the Cabinet of Ministers. Moreover, foreign financial services firms are allowed 100 percent ownership at the Qatar Financial Center (QFC). On October 31, 2009, the Council of Ministers agreed on the amendments proposed by the Ministry of Business and Trade to allow foreign investors to hold 100-percent stakes in certain activities, including: business consultancy and technical services; information and communication services; cultural services; sports services; entertainment services; and distribution services.
Qatar has no system of personal income tax, social insurance, no value added or sales taxes and no capital or wealth tax. The only taxes payable are:
- Corporate tax applied mainly on foreigner shares in local companies
- Import duties on essential items
On 17th November 2009 His Highness the Deputy of the Emir of Qatar issued Law No. (21) of 2009 concerning the Tax Law to apply to income earned on or after 1st January 2010 (New Tax Law).
The New Tax law effectively repeals Law No. (11) of 1993 (Old Tax Law).
This system has now been substantially simplified. Qatar's new income tax law is aimed at encouraging foreign investment. As of 1 January companies will be taxed on their taxable profits at a flat rate of 10 percent, benefitting businesses with substantial interests and activities in Qatar.
The new tax law, which imposes a withholding tax on payments made in respect of technical remunerations (at a rate of 5%), as well as on certain interest, commission, brokerage, management, attendance and service fees paid to non-residents (all at a rate of 7%).
Businesses already operating in Qatar, as well as groups considering investment into Qatar, will need to consider carefully the impact of the new tax law on their current and future activities. It may be helpful to consider structuring solutions which could help to mitigate or eliminate particular tax issues created by the new rules.
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