Laws And Regulations
Types of Companies
Qatar offers a diverse range of business structures to accommodate various operational needs and investment strategies. From Limited Liability Companies (LLCs) known for their flexibility and limited liability protection, to Branch Offices that allow foreign entities to operate under their parent company, the legal framework provides options tailored to different business goals. Each structure is designed to align with specific requirements, offering investors the opportunity to establish a presence that best suits their strategic objectives.
The rules for setting up and operating a company in Qatar are provided in Commercial Companies Law No. 11 (2015).
Stipulated thereunder are several types of company structures that you can consider when setting up a business. The most common types include:
- Limited Liability Company (LLC): This is the most common form of company structure in Qatar. An LLC requires at least two shareholders and allows for 100% foreign ownership in certain sectors. The liability of the shareholders is limited to their capital contribution.
- Joint Venture: A joint venture involves a partnership between two or more entities, either local or foreign, to establish a new business entity. Joint ventures can be formed to undertake specific projects or activities and are subject to specific agreements between the partners.
- Branch Office: Foreign companies can establish a branch office in Qatar to carry out specific activities related to the parent company's business. A branch office is not a separate legal entity and operates under the umbrella of the parent company, which assumes liability for its operations.
- Representative Office: Representative offices serve as a liaison or marketing office for foreign companies in Qatar. They are limited to non-commercial activities, such as market research, promotion and providing information about the parent company.
- Public Shareholding Company (Q.P.S.C.): Public shareholding companies are listed on the Qatar Stock Exchange (QSE). They require a minimum share capital, a minimum number of shareholders, and compliance with specific regulations for public companies.
- Limited Partnership: Limited partnerships consist of general partners, who have unlimited liability, and limited partners, whose liability is limited to their capital contribution. Limited partnerships are commonly used for professional services firms.
It's important to note that the requirements, procedures and regulations for each company type may vary. It's advisable to seek legal advice or consult with business consultants in Qatar to determine the most suitable company structure for your specific business needs and to ensure compliance with local laws and regulations.
In addition to the types of company mentioned above, there is a number of different commercial partnership arrangements that exist. A partnership company comprises two or more partners who are jointly responsible for the liabilities of the company. All joint partners must be Qatari national citizens. Each partner possesses the power to conduct commercial business under the name of the company. However, no partner is allowed to practice on his/her own or another’s account without first getting approval from the other company partner or partners. Limited partners, on the other hand, are only liable on debts incurred by the company to the extent of their registered investment. They have no management authority. An equities partnership company comprises two teams; one includes one or more partners jointly responsible for the debts of the company in all their assets; the other includes shareholders.
Companies formed through a shareholding arrangement must first be approved by the Ministry of Commerce and Industry (MOCI) prior to the company being established. The basic criteria are as follows: the shareholding company’s capital should be distributed to negotiable shares of equal value; the number of shareholders cannot be fewer than five; and all shareholders must be Qatari. In addition, an elected board of directors will be responsible for managing the shareholding company. The number of board members should be between five and 11 members. Each board member can be elected more than once unless stipulated otherwise in the statute of the company. Each board member should not exceed a term of three years in office.
In keeping with the goals articulated in its Qatar National Vision 2030, Qatar has implemented legislation aimed at attracting foreign investment in different sectors of the economy and facilitating investors’ access to the Qatari market. Foreign Investment Law (Law No. 1 of 2019) provides for the establishment of 100% foreign-owned companies, along with a few incentives and benefits for non-Qatar investors or in accordance with the regulations outlined by the law.
The incentives provided by the foreign investment law for non-Qatari investors are as follows:
1. Allocation of land for the establishment of investment projects through rent or usufruct.
2. Exemption from income tax as stipulated under Income Tax Law.
3. Exemption from customs duties on the following:
- Project Machinery and Equipment.
- Raw and semi-manufactured goods required for production, that are unavailable locally.
4. Expropriation only for the public interest and in a non-discriminatory matter and investors are to be paid fair compensation.
5. Provision to transfer the ownership of the investment to any other investor or relinquish it in favor of the national partner in case of a joint venture.
6. Except for labor disputes, settling disputes with third parties through arbitration or any other means of dispute settlement.
The council of ministers may grant investment project incentives and benefits in addition to the incentives provided by law on the suggestion of the Minister.
The 100% foreign ownership law does not apply to banking and insurance sectors, companies engaged in the exploitation of natural resources, commercial agencies, and any other sectors decided by the council of ministers.