Qatar has always been one of the most dynamic economies in the world and has the highest per capita income in the world. The most ambitious plan for transformation, Qatar National Vision 2030, is a strategic framework that enables the oil-driven economy to diversify the growth opportunities for SMEs and micro-sectors.
Qatar offers business incubators, economic platforms, and freezones for expanding its non-oil industries, such as manufacturing, tourism, information technology, education, healthcare, and agriculture. With infinite business opportunities and seamless business setup processing, start your business in Qatar with Ascent Partners.
How can you start a business in Qatar?
Under the earlier Foreign Investment Law, foreigners could only invest in a business entity if they had one or more Qatari shareholders owning 51% of the company.
The Ministry of Commerce and Industry introduced amendments to its foreign investors' laws to stimulate more non-Qatari investments. As per the Non-Qatari Investment Law No. (1) of 2019, a foreign investor can start a business in Qatar with more than 49% ownership in economic sectors subject to approval by the Ministry of Commerce and Industry (MCI). However, the prohibition on investing in economic sectors such as banks and insurance is exempt if granted by the Council of Ministers, commercial agencies, and any field issued by the Council of Ministers.
Foreign investors can own up to 100% ownership in sectors like energy, agriculture, education, tourism, industry, consultancy, technical services, IT, exploitation of natural resources, distribution, health, mining, construction, sports, entertainment, and cultural services.
Citizens of all GCC countries ((Bahrain, Kuwait, Qatar, Oman, Saudi Arabia, and the United Arab Emirates) have exemptions in the Foreign Investment Law of Qatar, which includes 100% ownership as opposed to the 49% for particular sectors.
Business Structures
The Commercial Companies Law of Qatar recognizes seven types of companies that you can register and operate in Qatar.
1. Limited Liability Companies
A Limited Liability Company is the most common business structure that requires no minimum share capital and must have one and not more than fifty shareholders. An LLC company must have Qatari national ownership of 51% of the company.
You can form LLC companies in all sectors of the economy except banking, insurance, and investment business activities.
2. Joint Liability Companies
You can set up a joint company with two or more partners who manage the business and are obliged to liabilities unless stated otherwise in the memorandum of incorporation. You cannot transfer company shares without the consent of all the partners.
3. Simple Commandite Companies
A limited company can have two categories of partners:
- Acting partners are jointly responsible for the company obligations in all the assets and run daily operations.
- Dormant or sleeping partners who invest capital but are not responsible for obligations to the extent of their capital contributions to the company. They do not partake in the management or even mention their names as partners in the memorandum of company incorporation.
4. Special Partnership Companies
A Special Partnership Company is an unregistered company that is not subject to any declaration procedures. The contract determines the obligations and rights of the partners. Each partner is the owner of the share committed to contributing unless mentioned in the contract.
5. Qatari Shareholding Companies
1. Public Shareholding
A Public Shareholding Company has its capital divided into equal shares of a value of not more than QAR 100 each. The companies can be incorporated by no less than five partners and must list the shares by public offering within 60 days. As per the Commercial Companies Law, the minimum capital requirement in public shareholding companies is QAR 10,000,000.
2. Private Shareholding Companies
A Private Shareholding Company can not issue its shares to the public and can be formed with at least five shareholders with a minimum required capital of the company is QAR 2,000,000. Non-Qataris can hold up to 49% or a higher percentage of a share upon approval from the MEC.
6. Share Commandite Companies
A Share Commandite company can be formed with a minimum capital requirement that can not be less than QAR 1,000,000. It has two different types of partners:
- Active partners who are jointly liable for the assets and are solely responsible for the company’s debts and obligations.
-Non-active partners are not liable for the debts of the company but are limited to the extent of the investment during the formation.
7. Holding Companies
As per the Commercial Companies Law, a holding company can be incorporated as a joint stock, either as a shareholding or a limited liability company. The holding company can administer and control one or more LLCs and shareholding companies through at least 51% ownership. The minimum share capital required for a holding company is QAR 10 million.
8. Freezone Companies
1. Qatar Financial Centre (QFC)
QFC, established in 2005, is the business hub that aims to attract international service providers with regulatory infrastructure and standards for investors seeking to do business in Qatar. There are no restrictions on foreign ownership, allowing various types of business structures, such as LLC companies, limited liability partnerships, and branch formation.
QFC allows regulated and non-regulated activities. The regulated activities include financial firms that offer banking, insurance, investments, funds, brokerage, and wealth management companies. The non-regulated activities include auditing, accounting, law, and management companies.
2. Qatar Free Zone Authority
The Qatar Free Zone Authority is an independent entity designed to optimize and streamline company formation. Free zone companies benefit from 100% foreign ownership, full capital repatriation, zero customs duty, and no personal income tax with various incentives and a skilled workforce facilitated by leading airport and seaport access.
Currently, QFZ has two zones at excellent locations and facilities:
a. Ras Boufantas Free Zone
Located next to the Hamad International Airport, Ras Boufantas Free Zone provides a unique business ecosystem that offers accelerated operation solutions with access to the infrastructure of the world-renowned airport to suit any business needs. Key industries: IT & Technology, Logistics, Manufacturing, Aviation, Pharmaceuticals.
b. Umm AlHoul Free Zone
Situated adjacent to the world’s largest greenfield seaport, Hamad Port, Um AlHoul Free Zone offers benefits from direct access to over 15 direct shipping lines that connect across 40 different ports. Umm Alhoul has its own port cluster, MARSA, to conduct maritime activities, imports, and exports. Key Industries: Logistics, Manufacturing, Maritime Businesses, Petrochemical.
3. Qatar Science and Technology Park (QSTP)
With 50+ companies, 22 startups and 5000+ workforce, QSTP is a free zone that hosts leading tech enterprises and rising ventures in Qatar. The permitted activities in QSTP: Technology, education or training, IT consulting services,manufacturing, research and development. You can conduct these activities under three licences:
Regular licence-Businesses are entitled to all the free zone benefits.
Restricted licence-Businesses entitled to limited free zone benefits
Service licence-Businesses entitled to no free zone benefits.
Steps to register a company in Qatar
1. Company Name Registration
Choose a trading name for your enterprise and reserve it through the Ministry of Economy & Commerce (MEC). If you opt for a name that doesn’t have an Arabic meaning, you will pay an extra QAR 1,000.
2. Articles of Association or Memorandum
The memorandum outlines the business details and objectives. The articles of association signed by all the shareholders are submitted to the Ministry of Justice and get it attested.
Submit the articles of association to be issued by a Commercial Registration (CR). Various government departments will review your application. Once the application is approved, return it to the Ministry of Economy and Commerce (MEC) for registration.
Then you can apply for a trade licence and a tax certificate. For Mainland companies, you must have a commercial office space address for registration.
3. Trade Licence
In order to obtain a trade licence, you must submit:
- Identification cards of the authorized person
- Copy of CR & AOA
- Photo of the office space
- Building rental documents
4. Establishment Card
When you receive your trade licence, the company can apply for an establishment or computer card to the Immigration and Passport Control Office with the following documents:
- Copy of CR & trade licence
- ID copies of all partners
Then you must also register with the Public Revenue and Tax Authority for a Tax Identification Number (TIN)
What are the main documents required when setting up a business in Qatar?
1. A Qatari national partner
2. Trade Name
4. Draft the Articles of Association (AOA) of the company
5. MOA (written in both Arabic and English) by the Ministry of Justice
What is the time frame expected for the Qatar company registration?
Company incorporation: 8 weeks
Corporate bank account approval: 4 weeks.
How much does it cost to set up a business in Qatar?
The estimated cost of starting a business in Qatar is between USD 20,000 and USD 50,000. However, the company must have a minimum capital of USD 55,000 (QAR 200,00).
What are the tax considerations when setting up a business in Qatar?
Qatar has two tax regimes: (1) the State of Qatar tax operated by the General Tax Authority (GTA), which applies to most of the companies in the country, and (2) the Qatar Financial Centre tax operated by the tax authority in the Qatar Financial Centre Authority (QFCA).
When setting up a business in Qatar, the following tax considerations should be noted:
- Companies are subject to an income tax at a rate of 10% on their net profit, with certain exceptions.
- Companies with full ownership of Qatari and GCC nationals resident in Qatar are not subject to corporate income tax.
- Companies registered in free zones are subject to specific tax regulations, and companies in the QFC are subject to a 10% corporation tax on profits. And companies within the QSTP are exempted from the tax.
-There is no local, state, or government personal income tax in Qatar.
How can Ascent Partners help?
Ascent Partners provide bespoke business setup and advisory services. This ranges from helping you strategise to choose the right business activity and jurisdiction for setting up your business to assisting with visa applications, our experts help provide essential guidance to help you strategise, startup, and scale in Qatar.
For more details, get in touch with us today at ask@ascentpartners.ae or 04 422 7339