Since 2003, Healy Consultants Group efficiently and effectively assists our Clients i) determine what type of business entity to register in Qatar ii) what class of business license to apply for iii) how a Qatari national sponsor will help iv) banking and cash flow considerations v) immigration and recruitment strategies and vi) office rental solutions.

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Qatar business setup summary

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• Benefits and problems

  Benefits of Qatar company registration

  

  • A Qatar company offers our Clients several taxation benefits including:
    • Qatar has a territorial taxation system. Therefore, dividends received from other countries will be not subject to corporate tax in Qatar. Consequently, a Qatar company is an excellent way to book global profits while legally minimizing international tax;
    • Qatar does not impose i) value added tax (VAT) ii) export tax or iii) capital gains tax. Furthermore, corporate tax is imposed at a relatively low rate of 10%;
    • There is no withholding tax imposed on dividends repatriated to non-resident shareholders. However, relatively low withholding tax rates of 5% and 7% are imposed on royalty payments and interest payments respectively;
    • Foreign nationals employed in Qatar are not required to pay personal tax or social security contributions. Consequently, Qatar is an attractive location for expatriate employees.
  • Our Clients are likely to enjoy certain miscellaneous benefits in Qatar including:
    • Foreign companies setting up industrial plants in Qatar enjoy i) natural gas priced at US$0.60 – US$0.75 per million Btu ii) electricity at US$0.0178 per Kwh iii) industrial land at a nominal rent starting at one Qatari Riyal (US$1 = QR3.64) per square meter per year iv) no custom duties on imports of machinery, equipment, and spare parts v) no export duties vi) 10-year tax holidays and vii) excellent telecommunications facilities;
    • Our Clients will also benefit from the availability of cheap labour and existence of easy recruitment procedures in Qatar. Plus, due to liberal immigration policies, it is easy to import skilled and unskilled labor;
    • In Qatar, English is the primary business language and is spoken by 60% of the population. Foreign investors interested in doing business in Qatar can easily communicate with employees, customers and suppliers;
    • To aid imports and exports, Qatar boasts 5 modern sea ports, 2 international airports, and modern roads connecting Saudi Arabia and the UAE. A major causeway connecting the country to Bahrain has been planned for 2015.
  • Qatar is a lucrative country for i) manufacturing, ii) logistics and iii) distribution businesses due to the provision of following key benefits in this sector:
    • A total of US$7 million has been invested by the Qatar government in the “Own Your Factory” initiative. This enables both Qatar-based and multi-national entrepreneurs to establish a manufacturing company or a factory in Qatar in just 72 hours;
    • Possibility of a complete exemption from paying corporate taxes for all foreign entrepreneurs investing in Qatar for a period of 3 years. However, this would be decided on a case-by-case basis and is subject to government’s approval;
    • The government is setting up numerous Manateq companies throughout the country to develop and promote investment in industrial zones, logistic parks, special economic zones and warehousing parks in Qatar.
  • Qatar free zones offer 100% foreign ownership in qualifying industries. The major Free Zones include i) Qatar Science and Technology Park (QSTP) and ii) Qatar Financial Center (QFC). You may refer to this webpage for entry criteria and permitted activities in QSTP and this page for QFC.
  • Article (2) of the Foreign Investment Law also offers certain exemptions applicable to certain sectors including agriculture, health, education, tourism, exploration of natural resources, energy and mining, business consultancy, technical consultancy, information technology, cultural, sports and entertainment. Investors setting up in these fields can apply for 100% foreign ownership, subject to Ministry of Commerce and Industry (MOCI) approval.

  Problems with Qatar company registration

  • Since 2017, Qatar was placed under a diplomatic and trade embargo by GCC countries. Multi-national Clients’ will find it difficult to trade within the Middle East. For example:
    • The embargo has closed air, land and sea links between Qatar and the four Arab countries. The land border with Saudi Arabia is closed for imports and exports;
    • Because of the disruption to supply chains, imports of food and raw materials to Qatar are more expensive, and lead times for deliveries are longer. For example, because feeder cargo ships can no longer serve Qatar from major trans-shipment hubs like Jebel Ali in the UAE, cargo must now pass through countries with which Qatar has good relations, including Oman. This increases shipping times and freight costs.
    • Qatar residents are also affected by the air blockade. For example, what was once a quick 45-minute direct flight from Doha to Dubai now takes several hours because of a change of aircraft in Kuwait or Oman.
    • Because regional air links are severed, Qatar is also a less attractive place to live. Weekend trips to the UAE or Bahrain are impractical.
    • Because Qatar is less attractive for expatriates, it is harder to recruit skilled employees. Consequently, businesses must pay higher salaries.
    • Because Qatar has deepened diplomatic ties with Iran and Turkey, there is a risk in future that companies doing business from Qatar will find it more difficult to do business with the United States and other western states who have tense relations with Tehran and Ankara.
    • This long-term crisis will lead to i) a decline in Qatar’s sovereign and bank ratings ii) further falls in the value of the Qatar stock exchange and iii) further eroded investor confidence iv) new diplomatic measures from the US and western countries if Doha deepens ties with Iran and Turkey v) Qatar’s resignation or expulsion from the GCC and vi) high profile logistics disruptions during the 2022 World Cup football tournament.
  • It is expensive to operate a business in Qatar because:
    • A vast majority of foreign companies must appoint a 51% Qatar national shareholder. The minimum annual fee payable to a Qatari nominee shareholder is US$40,000;
    • The cost of Qatar company can be high due to the following reasons: i) multiple government fees during company registration ii) compulsory office rentals iii) compulsory hiring of staff and iv) high paid up share capital of US$55,000;
    • During the registration process, the authorities frequently request documents to be attested by the Qatari Embassy in the country of origin of our Client. This is both a costly and time consuming exercise. To overcome this problem, our Clients appoint Mr. Aidan Healy as the temporary nominee shareholder, director and bank signatory;
  • Our Clients will also face negative consequences due to following issues:
    • It can be challenging to find quality local employees Qatar. Consequently, foreign investors will be forced to import expatriate workers. Furthermore, the government has a strategic goal to increase the proportion of Qataris in both the public and the private sectors, which will make it harder for local companies;
    • If a Qatar business cannot pay creditors, then the business owner must personally do so. Debt and financial irregularities are considered serious offences, and the owners may not be allowed to leave the country. This risk is greater if loans are owed to Qatar-based banks;
    • A majority of company visas and licenses are sponsored by Qatari nationals, giving the latter indirect control over the business;
    • In disputes over business and investments, Qatar business practices and laws favor Qatari nationals over foreigners. Disputes with Qatari shareholders and agents cause serious problems for foreign investors. Furthermore, Qatar Courts can impose precautionary restraint on foreign company assets pending adjudication of a commercial dispute. Consequently, foreign entrepreneurs with Qatari companies should select international binding arbitration for dispute resolution.
  • The process to de-register a Qatari company is time consuming and challenging and can take up to 8 months to complete, depending on the company’s structure. This is because the following must be completed:
    • Appoint a liquidator to review the assets and liabilities of the business who, will all going well, will issue a report confirming that there are no outstanding debts; then
    • Submit the de-registration application together with a liquidation report to the Ministry of Commerce and Industry (MOCI); then
    • Apply to cancel the company’s Municipality or Trade License with the Ministry of Municipality and Environment (MME); then
    • Place an advertisement in 2 Arabic local newspapers for at least 45 days; then
    • Submit a final balance sheet and liquidation request documentation issued by MOCI to the General Tax Authority (GTA) at the Ministry of Finance. Moreover, the audited financial statements and tax declaration must be submitted to GTA to issue a No-Objection Certificate; then
    • Lastly, supply the No-Objection Certificate to the MOCI, which then officially approves the closure of the Qatari company and cancels its Certificate of Registration.
  • There are numerous restrictions on import in Qatar, such as a ban on i) pork products, ii) e-cigarettes as well as on iii) alcoholic beverages. Moreover, Qatari law does not permit importation of goods and services from Israel.
  • Obtaining approvals from various government agencies, especially for regulated industries like transport, can be challenging because i) most procedures are not standardised and our Client can be referred to multiple departments to obtain approvals and ii) government staff are not very knowledgeable and may give conflicting information.
  • Clients setting up their company in Qatar to trade withing the GCC may face logistical difficulties due to the diplomatic crisis between Qatar and its neighbours the UAE, Saudi Arabia and Bahrain.

• Best uses for a Qatari company

  1. Qatar is an attractive jurisdiction for setting up regional headquarters for the MEA region because:
     • Most cities in the Middle East and Africa (MEA) do not view foreign companies in a positive light. By contrast, Qatar boasts favourable laws for foreign entrepreneurs which are aimed at protecting investors’ interests;
     • Doha is one of the most liveable cities in the MEA region, comprising a cosmopolitan and multi-cultural population. The country boats highly developed infrastructure for tourism, banking, entertainment and business. It has high quality office and residential accommodation, reliable power and utilities, first class hotels, hospitals, schools etc.
  2. Our Clients may wish to setup a financial services company in Qatar because:
     • Along with Dubai, Qatar will be a financial capital of the Middles East and Africa. The Qatar Financial Center has hundreds of financial companies, insurance companies, banks, and asset management companies. Earning tax free profits within a liberal economy free of exchange controls.