Start A Company In Qatar
With its rapid growth in population and its high GDP per person, starting a business in Qatar is highly lucrative. However, picking the right corporate vehicle and partner is vital to the security and safety of your investment in the long term.
This article is intended to explain the various types of business vehicles that are that foreign investors can choose from when they have decided to establish an enterprise in Qatar.
First, it is crucial to know the fact that investment from foreign countries is a priority and foreign companies are welcome in Qatar to aid in the growth of the economy. Furthermore, many incentives are for foreign capital, including exempts and tax credits from customs duties.
In most instances, contingent on the kind of business vehicle is used that is used; the local Qatari partner must be the owner of 51 per cent of any new company. However, it is possible that the Ministry of Economy and Commerce allows foreign investors to hold more significant than 49% share of the company in specific sectors, such as industries, agriculture, IT, health tourism, education, in addition to the expansion of the natural resources sector, such as energy, or mining.
The various types of business vehicles
Limited Liability Company (LLC)
Limited liability companies (LLC) can be the popular option for establishing a company in Qatar as foreign investors and is typically the only option for a variety of business ventures.
Most of the time, under Qatari law, LLCs must be at least 51 per cent Qatari ownership, and selecting the right partner is crucial. But, it is to be noted that partners who share profits do not have to be reflected in the shareholdings of their partners. This can be specified within the Articles of Association.
LLCs have the ability to sign contracts with multiple customers, and they are able to apply for most of the activities listed through the Commercial Register.
In order to establish an LLC, an initial share capital of 200,000 has to be provided. The money is to be transferred to a banking account up to the time the Commercial registration has been approved. At that point, the QAR 200,000 will be utilized to fund the day-to-day operations of the company.
Additionally, 10% of each year’s net earnings must be retained within the business until the company’s reserve is at 50 per cent of the capital.
The corporation tax is 10% charged on the net income of the business, and the business is required to be audited locally by accredited auditors.
Establishing as an office branch
A foreign corporation that performs a particular contract in Qatar can establish an office in Qatar when this project “facilitates the provision of the publicly-owned utility or public sector service”. I.e. is a part of an entity of the Government. The branch needs to be approved by the Ministry of Economy and Commerce.
In this scenario, there is no need to have the presence of a Qatari partner. The foreign company can hold all the assets of the company. A branch office is only able to fulfil the contract with which it is registered.
A branch will be utterly tax-exempt unless it is granted an exemption.
Representative Trade Office
This could be used to advertise a foreign business in Qatar and to introduce their products to Qatari firms as a shop window that is not traded.
Trade Representative Office is allowed to function in the following ways:
1. Contact with clients to introduce them to the foreign establishment and the companies representing them, their products and production to expand its distribution network.
2. Contact with exporters and suppliers of semi-manufactured and manufactured materials required by authorities represents and eliminates obstacles that hinder the delivery of these materials to authorities swiftly.
3. Inform the authorities they represent of any complaints that it receives about its products and ease any issues that arise from the distribution of the product.
Trade Representative Office is prohibited from doing the following: Trade Representative Office is forbidden to carry out the following actions:
1. to export, sell, or import, except for what it imports from the commercial sample of goods made by the establishment or company that it represents in the interest of marketing.
2. Promotion of products or services that aren’t manufactured or offered by the business or institution it is a part of.
3. Direct contact with the consumer.
In addition, there is no requirement to have the need for a Qatari partner, and the foreign entity can take all the assets of the company. This is, however, not an option for all businesses that want to sell services and products that are offered in Qatar.