Like any other country, Qatar also has its own specific
guidelines and requirements regarding foreign countries operating in this
country. There are enough services in Qatar for legal, financial matters, tax
matters, business advice, company background checks, and feasibility studies.
Professional experts are available for professional advice on any of these
topics.
In order to start a business in Qatar, foreign
companies must first appoint a service agent/sponsor. Experts, however, say
that the need for service agents/sponsors in Qatar is getting longer and may
go extinct in the coming years.
The common law for establishing and operating a business in Qatar
According to Commercial Companies Act No. 5 (2002), the headquarters of an organization must be in Qatar. Firms may adopt different firms, depending on their size, relationships between participating firms, preferred structures - single, as part of a larger group, or within a holding company, and so on. However, there are usually affiliated companies that operate in Qatar.- Joint venture
- Limited Partnership Company
- Special Partnership Company
- Shareholding Company
- Limited Liability Company
- Equities Partnership Company
All required documentation, conduct, procedures are
described in the laws of commercial companies. In all legal agreements, the
language used must be Arabic and, as always, the Arabic version will take
precedence over the English translation.
Partnership Company
Commercial partnership arrangements are common in Qatar. Two
or more partners are responsible for the company's liability in a partnership
firm. However, in such cases, all joint partners should be Qatari, and each
partner has the ability to conduct business meetings and business in the name
of the company. However, it is mandatory to get approval first before proceeding
with any investment.
Limited
Partners
They are only responsible for the debts owed by the company
or up to the amount of their registered investment. They have no management
authority.
Equities
Partnership Company
An equity partnership firm consists of two parties, one or
more partners are jointly responsible for the company's debt on all their
assets and the other includes partners.
Shareholding
Company
This company was formed through a shareholding system
approved by the Ministry of Economy and Commerce before its establishment. The
capital of the company is distributed in exchangeable shares of equal value.
There should be at least five shareholders, all of whom are Qatari.
Foreign ownership
Generally, foreign business owners and investors often form
private limited liability companies (LLCs) within Qatar. In such cases, the
company must have a minimum allowed share capital of QR 200,000 and two
shareholders and a maximum of 30 shareholders. Foreign investors own 49% of the
share capital, and the remaining 51% is in the hands of one or more Qatari
partners.
The Ministry of Economy and Commerce may allow up to 100% on
the shareholding of foreign investors, up to 49% on a case-by-case basis, and
up to 100% on a case-by-case basis.
Some other factors, such as whether the company offers new
products or installs new technology using domestic raw materials, and whether
the interest of the national cadre is taken into account.
Once, it has been confirmed that the business is beneficial
to Qatar and backed by industries, foreign investors or other investors are
allowed to maintain a controlling stake in the company.
Read also: To find out more about company registration fees in Qatar
Some of the supported industries include agriculture,
education, tourism, health, natural resource development and exploitation,
energy and mining, consulting services, technical services, and IT services. The
Ministry of Economy and Commerce may even exempt foreign companies from various
exemptions for investing in supported industries, including income tax for 10
years, tariffs on imported equipment and equipment required for trade, imported
raw materials, semi-manufactured products to produce needed products, which is
not otherwise available in Qatar.
Currently, Qatar is moving forward with a law that allows
full ownership of companies operating in the country. A draft law in this
regard was passed last year, where foreigners own 100 percent of the business
in all economic fields. Investors are allowed to have about 49 percent in
listed companies or a larger partner in government approval.
Qatar tax
system
Personal tax: There is no personal tax on per capita income.
This suggests that employees can make their wages and payroll at home without
tax deductions. However, any person who enters into any kind of commercial
activity with interest in income tax is required to pay tax according to the
tax law of the company.
Qatari and GCC citizens living in Qatar are exempt from
income tax. The tax rate is 10 percent of the company's total state income paid
annually. This fixed-rate applies only to business, and not to personal income
or personal taxes.
General business expenses are deductible, and losses may be
spread for a period not exceeding three years from the declaration of principal
book. The term 'commercial activity' refers to any occupation, service,
profession, industry, trade, imagination, contract work or business of making
any profit or income. Rental income is subject to a fixed rate of 10 percent.
Tax
exemption
Income tax exemption on public treasury bonds, public
corporation bonds and development bonds, income from shareholding conditions as
per Article 2 of Act 2 of 27, small handicraft business with less than 5
employees, income of firms working in firms, fisheries in terms of
remuneration, Qatari legal people living in agriculture, aviation, and maritime
transport and in the state.
There is no other tariff because Qatar is one of the top-ranked
countries in the world, which makes it attractive to foreigners.
The customs duty on ordinary cargo entering Qatar is about
5%. For temporary imports in Qatar, permission is required from the General
Director of Qatari Customs, excluding the customs department's check or bank
guarantee, for shipping charges. It will be returned to produce proof of export
from Qatar. Normal tariff clearance by air is 1-2 days and by sea 2-4 days.
In banking, foreign investors need the
permission of the Qatari government to invest in the banking and insurance
sectors.
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