Success tips when doing business in Qatar
An essential factor in starting a business in Qatar is to thoroughly research the business sector you are planning to invest in. Healy Consultants recommends our Client prepare a detailed Qatar company registration business plan including an extensive market study and evaluation of competitors.
Local business partners
- Your joint venture partner or Qatari shareholder must not merely be a nominee for the sake of meeting the rules of foreign company incorporation. You should choose a partner that actually brings a lot to the table, including local knowledge your business would need in Qatar Arabia;
- To optimize the success of your new business venture in the Qatar, Healy Consultants recommends your firm i) complete a feasibility study ii) prepare a detailed Qatar company registration business plan iii) communicate with the Qatar Chamber of Commerce iv) speak to your local Qatari embassy and v) communicate with Healy Consultants Clients who successfully launched their business in Qatar;
- Legal contracts in Qatar must be written in Arabic and the Arabic version of a contract will always take precedence over the English translation;
- You may find locals wary of contracts, relying instead on the spoken word. As a result, be careful of what you say, a careless remark could be construed as a promise, and you may be held to it later;
- There are frequent changes in the scope of work that may vary from the original contract. Qataris are likely to expect these variations to be complimentary, rather than remunerated separately.
Cultivating business relationships
- During business meetings, Arabs spend a lot of time discussing things in general and then once they are comfortable will talk business with you. Expecting them to directly come to the point and discuss business is seen as rude and must be avoided;
- When accepting a business card, don’t put it away without looking at it. Take your time to glance at it, then keep it in your hand or on the table in front of you;
- Qataris do business face to face or on the phone. Qataris do not like emails;
- Qataris are experienced traders, and therefore tough negotiators who will ask for discounts. Decision-making may be slow and often takes place at the final stage of delivery and implementation.
- Always keep business cards on your person. Include an Arabic translation on the back of your card;
- Carry to every meeting a colorful brochure in Arabic, comprising photos and a description of your business, products and services.
Cultivating personal relationships
- Personal relationships in the Middle East are much more important than they are in other countries. People prefer to do business with people they know so you are going to have to make an effort to get to know the people you need to do business with;
- Learn a few words of Arabic, it will be much appreciated by Qataris and will help close deals. Important phrases include i) Insha’Allah: means God Willing, and is often used when a promise is made. The premise is that everything is controlled by God, not by us, and therefore we cannot make an absolute promise ii) Alhamdulillah: Thanks be to God. However it is important to use the Arabic language respectfully because Arabs believe it is designed to carry the word of God;
- Expect your Clients’ families to be given greater importance than your business arrangements. It is common for Qataris to exit a business meeting after receiving a mobile phone call from home;
- If invited to the home of an Arab, you should always accept and take every opportunity to become acquainted with local people. Your Arab host will be generous and interested in you. However, you should avoid debating politics and religion as your opinions might be regarded as ill-informed or even offensive, even if they seem acceptable to you from a western perspective;
- Arabs are hospitable and place a great deal of emphasis on an outward expression of politeness and quiet demeanor. Arabs rarely say a direct ‘no’ to a proposition, so you must listen and observe carefully. If the response is ‘leave it with me’ or ‘I’ll think about it’, there’s a good chance that the project will go nowhere;
- Avoid putting an Arab in a position where he might suffer a ‘loss of face’ in front of other Arabs. He will especially appreciate this, if he notices your action.
- All Qatari males wear a thobe, a loose, white cotton robe with a white headcloth called a gutra that’s held in place by an agal, a thick black ringed cord. Outside the home, all local women wear an abaya, a loose black robe, over their clothing, and they cover their heads. Some conceal their faces behind a mask or veil;
- Time is not as exact as in the UK or USA. Five minutes may become ten minutes, half an hour an hour, tomorrow may become next week. Become accustomed to it; you are not going to change the way things happen;
- The week commences on Saturday and extends through Thursday, Friday being the day of rest. Government offices are closed on Thursdays and Fridays;
- While Qatar is considered a cosmopolitan city, it is still an Islamic state and follows the Islamic culture. It is important for foreign companies to respect this and make themselves aware of the Islamic traditions in business.
At the office
Foreign entrepreneurs interested in Qatar company registration need to be aware of how they must treat women in the workplace. Examples include:
- Not all Qatari women are comfortable shaking hands with foreign men. You need to wait for the woman to put her hand out first before putting forth your own hand;
- Also it is not acceptable to touch a woman even in a friendly manner on the shoulder or other places at any time in the office;
- It is common for men and women to sit at different areas of the office. What this means is that you need to designate part of your office where all the men would sit and another part of your office where the women would sit.
- The Qatar Investment Promotion Department (IPD) is a government authority, which operates under the supervision of the Ministry of Economy and Commerce and is entrusted with encouraging the growth of foreign direct investment in Qatar. The IPD provides investors with extensive information related to the local business environment, including current investment projects, suitable business partners, and government incentives. IPD also links investors with the local government agencies and informs them on how to set up a business in Qatar;
- Foreign companies should be aware i) Qatar statistics and market data are usually imprecise ii) transactions tend to take longer than expected iii) more frequent and longer market visits are required, at least initially iv) complex business procedures are common.
Interesting facts about Qatar
- Qatar is the wealthiest country in the world in per capita terms, boasting the third largest gas reserves in the world;
- Over the next decade, Qatar intends to spend no less than US$200 billion to complete infrastructure projects related to the 2022 World Cup;
- Qatar’s real GDP compounded annual growth rate was 14% between 2007 and 2011. The oil and gas sector constituting 52% of Qatar’s total nominal GDP. By 2020, Qatar hopes to completely break away from its reliance on the oil and gas revenues, with the majority of the national income coming from the sports sector, tourism, real estate, and financial;
- Most of Qatar’s crude oil is exported to Japan. China and India imports large amounts of Qatar’s fertilizers and petrochemicals. The two main countries that buy Qatar’s liquefied natural gas are Japan and Korea;
- Qatar law prohibits individuals from photographing airports, government ministry buildings or defense installations;
- Qatar has been ruled by the Al Thani Family since the 19th century. Qatar Petroleum (QP) is wholly owned by the state and responsible for all phases of the oil and gas industry in Qatar.
- Cigarettes are subject to a 100% customs tax and the alcohol a 50% customs tax;
- An initiative is in place which aims to increase the number of Qatari nationals in the public sector workforce. This new Labour Law introduces ‘Qatarisation’ initiatives for private sector entities. The employment of Qatari nationals is one of the criteria taken into account when tax exemptions are granted.
Frequently asked questions
How long does it take to incorporate a Qatar company?Healy Consultants can legally complete Qatar company registration within three weeks.
What is the minimum number of directors/shareholder required for a Qatar company?A Qatar company requires a minimum of 2 shareholders and 1 director. The shareholders need to be a Qatar resident but the director does not have to a resident. In addition, corporate directors are permitted.
Are there any restrictions on ownership of a Qatar company?For a limited liability company (LLC), foreign investors are permitted 49% of the stake provided that there are one or more Qatari partners. It is also possible for foreigners to own up to 100% of a Qatari company upon request in specialist sectors, agriculture, industry, health, education, tourism and development of natural resources.
Is information about the company available to the public?A register of shareholders and directors is available for public viewing at the Ministry of Economy and Commerce.
Is a Qatar company subject to an annual audit?A Qatar LLC is required to submit an annual tax return. If annual profits exceed US$27,470, the declaration should be accompanied by audited financial statements prepared by an auditor registered in Qatar. The taxpayer should keep accounting records in Qatari Riyals unless previously agreed with the tax administration.
What are the minimum capital requirements for a Qatar company?A Qatar LLC requires a minimum capital of QR300,000 (US$55,000).
What are the tax implications of a Qatar company formation?A Qatar LLC is liable to pay corporate income tax on profits sourced in Qatar. From 1 January 2010, a flat taxation rate of 10% is applicable. There is no income tax on individual salaries.
Does Qatar have a good network of double tax treaties?Qatar has a total of 58 avoidance of double taxation treaties. The existing double taxation treaties include countries such as France, Netherlands, UK, Russia, Malaysia, Singapore, India, and Mauritius.