How Dubai based companies can expand into Qatar

How Dubai based companies can expand into Qatar

- Connor Hayes

One of the most difficult challenges that business owners face as their companies grow is how to expand into new international markets, compliantly and profitably, whilst maintaining control and oversight of their expanded business.

Expanding into a new country or jurisdiction requires careful analysis of the new market, and also the legal and regulatory framework in that jurisdiction to ensure that the company is set up correctly to deliver right type of products or services to the required consumers.

For business owners in Dubai, and across the UAE, Qatar is good choice to look at to expand into. It is a country with a fast-growing economy and a forward thinking growth strategy that will undoubtedly provide diverse investment opportunities for businesses over the coming years.

Despite being a relatively small country, Qatar is one of the richest economies in the world based on GDP per capita and while petroleum and natural gas account for over 70% of total government revenue, its current primary focus is on the development of its non-energy related industries, such as petrochemical, real estate, financial services, education, health, sports and tourism.

Now, due to the lifting of the three-and-a-half-year embargo that was placed on Qatar by the UAE, Saudi Arabia, Bahrain and Egypt and the gradual resumption of normal life post Covid-19, expansion into the Qatari market is a much more viable option.

Why Qatar?

There are many multi-tiered investment opportunities that currently exist in Qatar, thanks to the country’s forward-thinking policies and drive for economic diversification.

In November 2022, it will host the FIFA World Cup which will create a wealth of investment opportunities related to infrastructure, hospitality and leisure facilities, both during the event itself and beyond.

The North Field Expansion Gas Development Project, announced by Qatar petroleum in 2017 has brought with it demand for businesses involved in shipping, logistics, local transportation and
hospitality and the Qatar National Vision 2030 will ensure that the country continues to facilitate and incentivise foreign investment in many different areas

Where should I set up in Qatar - Mainland or Free Zone?

Mainland Company - LLC

The Limited Liability Company (LLC) of the most established and commonly used business structure in the international market. To incorporate this type of business in Qatar, you are required to appoint a Qatari national (corporate or individual) as the majority 51% shareholder. The 49% of shares that remain can assigned to the foreign shareholder in the company. Note that the P&L split does not have to follow this 51:49 split, for example 99% of the P&L can be allocated to the 49% shareholder.

One of the main advantages of a mainland LLC over a freezone company in Qatar is the flexibility to carry out business with anyone inside or outside the country. A freezone company, in contrast is restricted to working only within the jurisdiction of its freezone or internationally, it cannot strictly carry out business with mainland Qatar companies or Qatar government entities.

The company structures that are available in Qatar are as follows:

Click the hyper links above for more information about each company structure and requirements to set up this type of company in Qatar.

Qatar Free Zone Companies

Unlike companies incorporated on the mainland, Qatar free zones allow for 100% foreign ownership. They represent an excellent option for small and medium size enterprises (SMEs) due to the inclusive nature of free zones and the potential for joint ventures and partnerships with other free zone businesses. Free zones also provide flexibility in terms of company structuring options and other incentives such as access to investment funding.

At present, there are three free zones operating in Qatar. They are the Qatar Investment Free Zones (QFZ), the Qatar Financial Centre (QFC) and the Qatar Science and Technology Park (QSTP).

Qatar Investment Free Zones - QFZ

QFZ is centred around three key sectors: logistics, technology and chemicals, in which Qatar can offer unique advantages over other international investment locations. It can be subdivided into three distinct sectors:

  • Downtown Free Zone at Msheireb
    This zone is located in the heart of Downtown Doha and includes 17 commercial buildings and 10,000+ parking spaces. It is comprised of office and retail units, Civil Services and cultural and entertainment services.
  • Ras Bufontas
    This airport free zone makes up an area of 4km² with direct access to Hamad International Airport. It has 24 pre-built industrial units, ranging from 415m² to 1500m².

    It is comprised of various businesses in a number of different sectors including logistics, emerging technologies, light manufacturing, aviation and international business services.
  • Umm Alhoul
    Umm AlHoul, which is 30km² in size, is the seaport free zone and has direct access to Hamad Port, the city’s main seaport and the world’s biggest “greenfield” port development. The plots contained within it are divided into logistics, petrochemicals, automotive, maintenance, repair and operations, food processing and maritime.

Qatar Financial Centre - QFC

The QFC was set up to be a financial and business hub with the aim of attracting financial service providers from around the world.

Various types of legal entities can be established in QFC, and it is unique in the Middle East in that it has no physical boundaries and companies registered in QFC can operate both in Qatar and internationally.

Qatar Science and Technology Park

The QSTP forms part of the Qatar Foundation. It is a centre of research and commercial excellence for scientific development. The intention of the QSTP is to be the leading location for the development and commercialisation of technology in the Middle East.

Operating within QSTP requires a licence, and entities wishing to register there must carry out activities that are deemed to be contributing to the advancement of technology in some manner.

Companies in QSTP are not subject to tax and can import goods and services free of any customs duties.

Companies engaged in non-regulated activities have no minimum capital requirement. The minimum capital requirement for regulated activities is determined according to the proposed activity.

How can PRO Partner Group help?

At PRO Partner Group have strong ties with Qatar, an extensive team on the ground and in-depth knowledge of the market, company incorporation requirements, government departmental requirements and visa, labour and immigration services to support clients staff and family members in country.

We understand that entering and developing in new markets is challenging. We can help you identify the correct legal entity for your business set up in Qatar and assist you with all relevant PRO Services, such as Staff Visas, Immigration and Labour matters, and all relevant company licensing, corporate structuring and corporate governance.

If you need assistance in setting up a company in Qatar, and for further information on any other related company setup, local partner or PRO service matter in Qatar, UAE, Oman or Saudi Arabia then please do get in touch with us on +974 4478 8765, email us at info@propartnergroup.com or complete the contact form below and we will be delighted to assist you.

Get in touch with Connor Hayes

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