204 Tower- A, Gulf Towers,
P. O. Box 55535, Dubai, UAE
Ph: +971 4 33 66 990
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Qatar is a peninsula in the east of Arabia, bordering the Persian Gulf and Saudi Arabia. The country occupies approximately 11,521 square kilometers on a peninsula that extends 160 kilometers north into the Persian Gulf from the Arabian Peninsula. The coastline is 550 kilometers long. Its territory comprises a number of islands. The terrain is flat and rocky with some low-rising limestone outcrops in the west and north. It is characterized by a variety of geographical phenomena including many coves, inlets, depressions and surface rainwater-draining basins known as Riyadh (the gardens). These areas have the most fertile soil and are rich in vegetation.1.1 POLITICAL SYSTEM
Qatar is an emirate with a conventional hereditary system. It is ruled by the Al Thani family whose presence in the peninsula dates from the eighteenth century. The Al Thani is named after the doyen of the family Sheikh Thani bin Mohamed who is the father of Sheikh Mohamed bin Al Thani. Qatar has been ruled by the Al Thani Family since the 19th century.1.2 LEGAL ENVIRONMENT
The Judiciary in Qatar is expressly established as an independent body by the provisional constitution and is currently divided into two court systems; the civil, commercial and criminal system and the Sharia Court system. Sharia Court system administers Islamic laws. In October 2004, the judicial system underwent a radical change with the establishment of the new Judiciary Law issued in 2003, which became effective in 2004. According to the new Judiciary Law, the previous two court system has merged into one. A Higher Court called the Court of Cassation (Supreme Court) has been established. Appeals from the Court of Appeal can be raised to the Court of Cassation, which will be considered the highest court of appeal in the country.
Any company incorporated in Qatar, shall take the form of the following categories:
Except for Joint Venture Company, the memorandum and article of association of the abovementioned companies, are required to be in Arabic, otherwise the contract of association will be null and void.2.1 SIMPLE PARTNERSHIP COMPANY
A simple partnership company is formed by two or more natural persons of Qatari nationality who are jointly responsible for the company’s liabilities. The article of association and all relevant amendments must be registered in the Commercial Registration and should be published in one of the daily Arabic newspaper.2.2 JOINT PARTNERSHIP COMPANY
A Joint Partnership is similar to Simple Partnership Company and all partners should be natural persons of Qatari nationality. The Joint Partnership Company consists of two categories of partners:2.3 JOINT PARTNERS
These partners are responsible for the running of the organization, and are jointly liable for the company’s liabilities against their private assets.2.4 TRUSTEE PARTNERS
These partners are liable for the partnership's debts only to the extent of money they have invested, or are committed to invest in the partnership. Trustee partners not allowed interfering with the management of the business.2.5 JOINT VENTURE COMPANY
A joint venture company is formed by two or more natural or legal persons. For this type of an entity where there is no legal personality involved, it is not required to follow the same commercial registration as other categories of companies. If a non-Qatari is a partner of a Joint Venture Company it shall not carry out business prohibited by the law to be carried by non-Qataris.2.6 PUBLIC SHAREHOLDING COMPANY
A Public Share Holding Company comprises of a number of persons who subscribe for its transferable shares, and who are liable only to the extent of their shares value in the invested capital. The capital for such kind of companies shall not be less than QAR 10 Million and promoters cannot subscribe for a share less than 20% or more than 60% of the companies capital. It is mandatory for a Public Share Holding Company to appoint financial auditors. Except as provided in Law No.13 for the year 2000, only nationals of Qatar can subscribe for shares in the Public Share Holding Company. The articles and memorandum of public shareholding should specify among other things, the duration of the life of2.7 LIMITED SHARE PARTNERSHIP COMPANY
A Limited Share Partnership company is formed by one or more joint partners and at least four trustee partners. The investment for such kind of companies shall not be less than QAR 1,000,000 which has to be paid entirely while establishing the company. A trustee shareholding partner is not permitted to interfere in the management affairs relating to third parties, although he can participate in the internal management matters of the company provided he is doing so within the limits specified in the Articles of Association.2.8 LIMITED LIABILITY COMPANY
The most commonly used Business Entity in Qatar is Limited Liability Company which is formed by minimum 2 and a maximum of 50 shareholders with the capital of company not being less than QAR 200,000 divided into equal shares of minimum QAR 10 each. A Limited Liability Company is not allowed to carry out insurance, banking or investment brokerage activities whether as principal or agent.2.9 ONE MAN COMPANY
A company wherein the capital which shall not be less than QAR 700,000(fully paid) is completely owned by a natural or legal person is known as One Man Company. The corporate governance requirements for the company are similar to Limited Liability Company.2.10 HOLDING COMPANY
A Public Share Holding Company or Limited Liability Company or One Man Company that governs and manages the financial and management issues of one or more of the subsidiary companies and owns 51% or more of the share capital is a Holding Company. The share capital of the holding company shall not be less than QAR 10 million. A Holding company is prohibited from owning any shares in other holding companies.
The following are broad procedure to be followed for setting up of different types of companies in the State of Qatar.3.1 COMPANY FOR GOVERNMENT CONTRACTS
Submit a request to be exempted from local partnership (if so desired) to the Investment Promotion Department at the Ministry of Economy and Commerce, along with certified Arabic translation copies of following documents:
Submit a request along with a business proposition to be exempted from local partnership (if so desired) to the Investment Promotion Department at the Ministry of Economy and Commerce.
Qatar welcomes foreign participation in joint ventures through technology supply, market administration and equity participation. The State’s commitment in this direction was further witnessed through the passing of the Foreign Investment Law by an Emiri decree in mid-October 2000, the setting up of the “Investment Promotion Department” at the Ministry of Economy and Commerce, the law establishing the Qatar Science and Technology Park, the law establishing the Qatar Financial Centre, law no 13 of 2000 to Organize Foreign Capital Investment and the amended new Commercial Law in 2006.
Foreign investors may invest in all sectors of national economy provided they have one or more Qatari partners whose share shall not be less than 51% of the capital, and the company is incorporated in accordance with the provisions of the applicable laws. It is however permissible, by a decision from the Minister, for foreign investors, to exceed the percentage of the foreign participation from 49% to 100 in certain sectors like agriculture, industry, health, education, tourism and development/ exploitation of natural resources or energy or mining, provided such activities are in conformity with the development plans of the state. Preference to projects that achieve the optimum utilization of locally available raw materials and national manpower, encourage export industries or those providing a new product or those using modern technology. It is prohibited for the foreign investments referred in the above categories to invest in the fields of Banking, Insurance, and Commercial Agencies except as permitted within the framework of Qatar Financial Centre.4.1 REPATRIATION OF CAPITAL AND PROFITS
The only restriction on a foreign participating joint stock company intending to remit all its annual profits generated from Qatar back to the holding company’s base of operations, is the requirement to transfer a sum equal to 10% of its profits for the year to a legal reserve until the reserve amounts equals to 50% of the paid-up share capital. The equity capital, loan capital and other capital contributions are free for repatriation. There are no restrictions on converting the local currency to any foreign currency as the currency is fully and freely convertible.4.2 AGENCY RELATIONSHIP
Foreigners, whether individuals or corporations, are not permitted to import goods and services on their own account into Qatar; they must sell their goods to a Qatari agent or distributor which will then market them locally. Any personnel seconded by the foreign business must be employees of the Qatari agent in whose name all bids and contracts must be signed. A new Commercial Agents Law No. (8) was enacted in 2002, repealing the earlier Law No. (4) Of 1986. The main highlights of the new law are as follows:
There are specific restrictions of foreign investment in banks and insurance companies which are contained in the laws regulating these sectors. Law No.19 of 1997 allowed the establishment of Offshore Banking Units (OBUs) in Qatar. Capital requirements of OBUs are set at QR 20 million for Qatari banks and QR 10 million for foreign banks. OBUs are not permitted to accept deposits and provide asset management for citizens and residents of Qatar unless specifically approved by Qatar Central Bank.5.1 GCC BANKS BRANCHES
The Governors of GCC Central Banks agreed at their 25th meeting in Riyadh in October 1997 to allow GCC national banks to open branches in other GCC member states provided the following main conditions are met:
The Government offers several attractive incentives for joint ventures, such as:
There are no restrictions on foreign investors using their own funds to participate in Qatari businesses. If a foreign investor’s own funds are insufficient to finance the business, the investor may approach a Qatari, GCC, or indeed any bank for finance. Bank financing in Qatar is granted on normal commercial terms.
The Qatar Financial Centre (QFC) is a financial and business centre established by the Government of Qatar and located in Doha or other locations designated with the approval of the council of ministers. To establishing Qatar financial Centre the State of Qatar enacted new legislation in March 2005, formally opened on 1st May 2005, The Centre is stand for attracting international financial institutions and multi-national corporations to establish business operations in a "best-in-class" international environment, and to participate in a long-term and mutually beneficial partnership with Qatar. The Centre consists of the QFC Authority, QFC Regulatory Authority, QFC Civil & Commercial Courts and QFC Regulatory Tribunal which are independent of each other.7.1 QFC AUTHORITY
The QFC Authority is responsible for commercial strategy and for developing relationships with the global financial community, financial institutions and other key bodies and organizations both within and outside Qatar. The QFC Authority is governed by a Board which is chaired by the Minister of Economy and commerce. One of the QFC Authority’s most important roles is to approve and issue licenses to individuals, businesses and other entities that wish to incorporate or establish in the Centre. Businesses wishing to undertake financial services will also require authorization from the QFC Regulatory Authority.7.2 QFC REGULATORY AUTHORITY
The QFC Regulatory Authority is an independent statutory body, which reports directly to the Council of Ministers. It regulates and supervises the full spectrum of financial services activities conducted in or from the QFC. These include all types of banking, insurance, asset management, financial advisory services, securities and derivatives dealing, and Islamic finance.7.3 QFC COMMERCIAL & CIVIL COURTS & QFC REGULATORY TRIBUNAL
The new Civil and Commercial Court and the Regulatory Tribunal for the Qatar Financial Centre provide a world class legal infrastructure for a successful and modern financial centre. The role of the two legal bodies comprising internationally renowned members of the judiciary and lawyers of the highest reputation is to uphold the rule of law and ensure the transparency of QFC business transactions. The Commercial & Civil Courts provide mechanisms for resolving disputes between Qatar Financial Centre firms or financial institutions and their counter-parties and for arbitration or the formal resolution of civil disputes before a Tribunal, in effect a commercial court, operating to high judicial standards. The Regulatory Tribunal is an Appeals Body to allow firms affected by particular decisions of the Regulatory Authority to have those decisions reviewed.7.4 DOING BUSINESS THROUGH QFC
Activities which are permitted to be carried out in or from the QFC fall in to two categories, regulated activities and non-regulated activities. All firms wishing to conduct permitted activities need to apply for a license from QFC. For regulated activities an application should be filed to obtain an authorization from the QFCR Authority and to conduct non regulated activities an application should be filed in the QFC Authority for a license.
The Qatar Science & Technology Park was established by the government in September 2005 to attract foreign companies to investing in applied research & development. It is a free-trade zone wherein 100 percent foreign owned business can be established with the free from Tax & Duties incentives. A company incorporated in QSTP does not require a local agent and applicants can opt for operating as an overseas company or establishing a new local company. Free zone benefits also include the unrestricted repatriation of capital and profits and authority to sponsor expatriate employees. The incorporated companies at QSTP are required to make technology development as one of their activity which can include applied research, the development and testing of products and services, or technology related training. It is part of Qatar Foundation, which includes campuses of major international universities such as Carnegie Mellon, Cornell, Georgetown, Texas A&M and Virginia Commonwealth.
203, Liberty Al Soor Building
Al Mena Road,
P.O Box 5199 Sharjah, UAE
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Office No. 140, LOB-16
P O Box 61136
Jebel Ali Free Zone
Ph: +971 4 88 71 727
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204 Sohail Bin H R Al Mazrooi Bldg.
Salam Street, P.O. Box: 31616
Abu Dhabi, UAE
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