Business entities in Qatar in 2021
100% foreign ownership is strictly restricted under Qatar law and requires approval from the Qatar Ministry of Business and Trade in most industries. Before proceeding to the registration of a company in Qatar, it is hence strongly recommended to firstly determine whether the activities of the company are all open to foreign investors or will require the formation of a joint venture. In restricted sectors, a simpler and less costly alternative to business setup is to operate through an agency agreement. In any case, Healy Consultants will be pleased to discuss your business needs and recommend the most optimum solution.
Doing business in Qatar through a local entity
The Qatar wholly foreign-owned company
- Foreigners can register a wholly foreign-owned company in Qatar only i) in specific industries listed in the Qatar Foreign Investment Law of 2010 and ii) after receiving approval from the Ministry of Business and Trade. There is no official paid up capital mentioned by the Law and the minimum required amount is in practise set by the Ministry of Business and Trade during the review process;
- The industries allowing foreign direct investment include: i) agriculture and exploitation of natural resources ii) manufacturing activities iii) healthcare services iv) education services v) tourism vi) telecommunication services vii) leisure and entertainment and viii) consultancy services;
- Best uses: we usually recommend our Clients to setup a wholly foreign owned company in Qatar only if they expect to make a significant investment, to hire locally and/or to proceed to technology transfer within the months following business setup. In reality, only larger multinationals are granted ministerial approval to operate locally through a wholly owned subsidiary.
The Qatar joint venture company
- Foreigners not expecting the criteria for registration of a wholly foreign owned company can opt to register their business in joint venture. Foreign shareholding is then allowed to be up to 49% without a requirement to get prior approval from the Ministry of Business and Trade. If needed, Healy Consultants can provide you with nominee services for a professional passive Qatari shareholder;
- While we recommend our Clients to allocate a minimum paid up capital of US$55,000 to the capital of their joint venture, such amount can vary significantly as per the exact operations to be conducted by the company. Healy Consultants will prepare a business plan for Government review and will confirm you the recommended amount of capital to timely ensure company registration approval;
- Best uses: the joint venture company is the type of entity most commonly setup by foreigners willing to do business in Qatar. It can be used for various trading and manufacturing business activities.
The Qatar free zone company
- Currently, Qatar maintains two special economic zones designed for foreign investment projects: i) the Qatar Science and Technology Park, accepting applications from R&D businesses and ii) the Qatar Financial Centre, mainly targeting companies offering financial, banking and insurance services but also open to other services including: i) shipping services ii) management services and iii) professional services. See this page for application guide;
- While a company registered in these special economic zones can be wholly-foreign owned and benefit from multiple tax incentives, they are also subject to tight registration requirements including: i) higher amounts of paid up capital and ii) obligation to submit a feasibility study to the Qatar authorities. See this page for further details on the Qatar Financial Centre and the Qatar Science and Technology Park;
- Best uses: we usually recommend our Clients to seek free zone registration in Qatar only if they expect to make a significant investment in the industries targeted by such zones and to proceed to technology transfers within the months following business setup. Only such projects are granted free zone registration approval.
Doing business in Qatar with a foreign entity
The Qatar branch office
- Qatari regulations allow branch registration by foreign companies only when such companies have won a government contract for the provision of public services. Approval from the Minister of Business & Trade is required before branch registration and the branch office will be fully taxable in Qatar. The duration of the branch is conditioned to the duration of the contract, although it is possible to renew the branch if new contracts are awarded to the branch;
- As the branch is not considered as a permanent establishment by the Qatar Government, local customers of the branch will be required to withhold corporate income taxes and other taxes from their payment to the branch. Such amounts can be reclaimed after completion of the contract and provision of a final tax return by the branch;
- Best uses: except for Clients falling in the above case, registering a branch in Qatar is usually not can be a strategy to ease the setup process in regulated industries subject to licensing requirements, such as banking, insurance and finance. Otherwise, we recommend our Clients to register a subsidiary instead of a branch.
The Qatar international engineering consultancy office (IECO)
- While branches of foreign companies can only be registered on a temporary basis (see previous entity for further details), the Qatari Government provides a derogation for the registration of branch by foreign engineering companies, subject to approval by the authorities;
- Unlike a standard branch, an IECO is considered as a permanent establishment and its customers are not required to deduct withholding tax from their payments;
- Best uses: such entity can only be registered for the provision of engineering services. In reality, only larger and most famous multinationals will be granted approval by the authorities for the registration of an IECO.
The Qatar representative office
- Qatari laws allow foreign companies to register representative offices. These entities will not engage in any income generating activities; instead they will only seek to promote the parent company’s interests in Qatar. Prior approval from the Ministry of Business and Trade is mandatory;
- Best uses: registration of a representative office is an optimal entity for Clients not willing to trade with Qatari customers.
Doing Business in Qatar through an agency agreement
- Our Clients who do not i) wish to appoint Qatari shareholders or ii) invest substantial capital amount may choose to work with a commercial agent. Under this option, there is no requirement to setup a new company;
- See this page for further details on how Healy Consultants can assist your Firm to sign a quality agency agreement in Qatar with a professional agent or distributor.
Table of comparison between different entity types
|Operations and logistics||Joint venture||100% foreign-owned company||Free zone company||Branch||IECO||RO|
|Doing business in Qatar permitted?||Yes||Yes||Yes||Yes||Only engineering||No|
|Allowed to sign contracts with local Clients?||Yes||Yes||Yes||Yes||Yes||No|
|Must have a contract signed before Qatar registration?||Yes||Yes||Yes||Yes||Yes||No|
|Allowed to invoice local Clients?||Yes||Yes||Yes||Yes||Yes||No|
|Clients must deduct tax from payments?||No||No||No||Yes||No||N/A|
|Can rent local office premises?||Yes||Yes||Yes||Yes||Yes||Yes|
|Allowed to import raw materials?||Yes||Yes||Yes||Yes||No||No|
|Allowed to export goods?||Yes||Yes||Yes||Yes||Yes||No|
|Accounting and tax|
|Corporate tax rate?||10%||10%||10%||10%||10%||N/A|
|Corporate bank account?|
|Statutory audit always required?||Yes||Yes||Yes||Yes||Yes||Yes|
|Annual tax return to be submitted?||Yes||Yes||Yes||Yes||Yes||Yes|
|Access to DTAAs?||Yes||Yes||Yes||Yes||Yes||No|
|Paid up capital recommended?||US$55,000 and above||US$55,000 and above||US$55,000 and above||US$55,000 and above||US$55,000 and above||US$55,000 and above|
|Resident director/manager required?||No||No||No||Yes||Yes||Yes|
|Resident bank signatory required||No||No||No||No||No||No|
|MBT approval required before registration?||Yes||Yes||Yes||Yes||Yes||Yes|
|local shareholder required?||Yes, 51%||No||No||No||No||No|
|Minimum number of directors?||1||1||1||1||1||1|
|Minimum number of shareholders?||2||1||1||Parent company||Parent company||Parent company|
|Individual shareholders allowed?||Yes||Yes||Yes||No||No||No|
|Public register of shareholders and directors||Yes||Yes||Yes||Yes||Yes||Yes|
|Can the entity hire expatriate staff?||Yes||Yes||Yes||Yes||Yes||Yes|
|How long to get work permit approved?||3 months||3 months||3 months||3 months||3 months||3 months|
|Fees and timelines|
|How long to set the entity up?||4 weeks||8 weeks||8 weeks||8 weeks||6 weeks||6 weeks|
|How long to open corporate bank account?||4 weeks||4 weeks||4 weeks||4 weeks||4 weeks||4 weeks|
|Estimate of engagement costs||US$28,599||US$36,549||US$33,475||US$34,800||US$30,914||US$34,795|
|Draft invoice||View invoice PDF||View invoice PDF||View invoice PDF||View invoice PDF||View invoice PDF||View invoice PDF|
Frequently asked questions
What is the minimum share capital required for the different business entities in Qatar?A Qatar LLC requires a minimum share capital of US$55,000.
How many Qatar resident shareholders will I need to incorporate a Qatar LLC?This Qatar business structure will require 51% shareholding from Qatar citizen(s).
Which are the entity types in Qatar that require an annual audit?The forms of Qatar business entities that require an annual audit are LLCs and branch offices. Representative offices do not require an annual audit.