A convenient moment for changing your life
With the extremely strong economy, State of Qatar is one of the best places in the world to commence your business. You can begin in a variety of forms inclusive of limited liability, a joint venture or a private company.
This the most common type of company formation that is used by foreigner investors wishing to set up new business in Qatar. An LLC company can be formed on the basis of a 49 percent foreign shareholding and a 51 percent Qatari shareholding. This shareholding does not, however, necessarily reflect the profit distributions between the parties & can be agreed by the contribution of each party, the management of the LLC, etc.. Since 2007, the Ministry of Business and Trade has been approving Articles of Association with a 51/49 interest, however providing for up to a 97/3 profit distribution. The LLC provides a permanent base of operations/service in Qatar through which all contracts entered into should be capable of being performed in the State of Qatar. An LLC can provide any kind of business in Qatar that falls within the scope of its objects within their Articles of Association. This means it can provide a service for any business and is not limited to the performance of one contract, as a branch (see below) would be.
This formation does not allow the foreign company to establish a presence in Qatar, but instead, a Qatari agent can be appointed to market the goods and services of the company within Qatar. All exclusive agencies can be registered and are subject to the Commercial Agents Law (No. (8) of 2002). Under a registered agency, commission is payable on all sales of the products within the territory even if the sales are not due to the activities of the agent. Any termination of the agency will trigger a compensation structure for the Qatari agent, including upon the expiry of a fixed term agency. Non-registered agencies will be subject to the Commercial Law (No. (27) of 2006).
However small in terms of land , Qatar consists with many investor-friendly strategies set up by the government.
A foreign company wishing to operate in Qatar may be able to open a branch if its presence in Qatar is required to perform a specific contract that relates to a project that ‘facilitates the performance of a public service or utility’. If a foreign company has a contract with a Qatari government entity, this is likely to be regarded as being a contract that ‘facilitates the performance of a public service or utility’. One of the key advantages of a branch set-up is that the involvement of a Qatari partner is not required. The disadvantage is that the foreign company registered as a branch is only entitled to perform the contract in respect of which it is registered. Once the contract has been completed, its registration will lapse on completion, unless extended by reason of the contract or because a new contract is entered into.
Must be a shareholding company structure – whereby the Qatari government, a Qatari government owned entity or a public corporation must own 51% of the shares. Only upon the consent of the Council of Ministers, it may own less than 51%, with the foreign investor’s share can be greater than 51% of the company, as this is a matter for negotiation between the parties. This type of company structure falls outside the Commercial Companies Law to the extent that certain provisions of that law have been excluded in the company’s Articles of Association.
A company can register as a Trade Representative Office through the Ministry of Economy and Commerce Decision No. (142) of 2006 that regulates Trade Representative Offices. This type of formation can only be used to promote a foreign company in Qatar so as to introduce it to Qatari companies and projects, through marketing and promotions. A company cannot be engaged in selling or entering into contracts in Qatar. Business can only be performed by the foreign entity (where the contract can be performed substantially outside Qatar) or by a company or branch authorised to do business in Qatar.