Can I set up a 100% foreign owned company in Qatar?

Can I set up a 100% foreign owned company in Qatar?

Qatar is a country with some of the most exciting business projects in the world at the moment. In the 2022 FIFA World Cup and the North Field Expansion, it has 2 projects that are certain to generate enormous investment and business opportunities.

If you’re considering setting up a business in Qatar, it is important to know what types of business structures are available and what the laws are around business ownership for foreigners.

Can foreign investors start a business in Qatar?

Generally speaking, for a foreign investor to start a company in Qatar, they must appoint a Qatari national as a local partner to hold 51% of the shares of the company. The foreign investor can then hold the remaining 49%.

The most frequently used business structure in these joint ventures is a Limited Liability Company.

Is 100% foreign ownership possible in Qatar?

The Qatari “Foreign Investment Law” specifies that any foreigner who wants to incorporate a company in the country requires a Qatari partner to have a minimum 51% shareholding in the company. However, under Article [2] of the same law certain exemptions are permitted in certain business sectors. These include:

  • Agriculture
  • Business consulting and technical services
  • Culture, sports, entertainment and distribution services
  • Development and exploration of natural resources
  • Education
  • Health
  • Information Technology
  • Industry
  • Tourism

These sectors are the ones that the Qatari government is prioritising and therefore incentivising foreign investment in.

Other businesses outside of these sectors could potentially be granted 100% foreign ownership. However, they would be subject to approval by the Qatari government’s Council of Ministers.

Generally speaking in the mainland, companies will still need to set up as an LLC, with a 51% local partner. Companies can mitigate the risks of having a 51% local partner by using a Corporate Nominee Shareholder to hold the 51% and pass effective management control and 100% ownership to the 49%. PRO Partner Group can act as the Nominee shareholder in this regard and provide security to the foreign party.

A Foreign Branch structure is possible, and this will allow 100% ownership by the foreign company, however a Foreign Branch in Qatar can only be opened up by having a Qatari government contract, and the Branch office can only remain open for the duration of that contract.

There are a number of freezone options in Qatar, that will allow companies to set up in Qatar with 100% ownership. Qatar Freezone (QFZ) is very popular and growing, and provides a good set up option for companies that want to have 100% ownership, although as with all Freezones the companies within that zone can strictly only deal with other Freezone companies or internationally, they are limited to doing work in mainland Qatar.

Qatar Financial Centre (QFC) is also a popular option in Qatar, and does allow companies to set up with 100% foreign ownership.

What business types can be used in Qatar?

The Commercial Companies Law which dictates the structure and governance of companies in Qatar permits the incorporation of different types of companies.

  • A Limited Liability Company
    The most popular type of corporate structure to set up in Qatar, this type of company is formed with a minimum of two and a maximum of fifty partners, whose liabilities are limited to the value of their shares held in the company.

    The minimum capital for this type of company is QR200,000 (two hundred thousand Qatari Riyals).

    Limited Liability Companies in Qatar may not conduct business in the sectors of banking, insurance or fund investment.

  • A Simple Partnership
    A Simple partnership company is a company formed by two or more natural persons who have individual and joint responsibility for the liabilities of the company. The company should have a Memorandum of Association and its name should reference one or both of the partners.

  • A Joint Partnership Company
    This company structure involves two types of partners: Joint Partners, who are responsible for the management of the company and have responsibility for the company’s liabilities, and Trustee Partners, who contribute to the company’s capital but whose responsibility for the company’s liabilities is limited to the value of their shares in the company’s capital.

  • A Joint Venture Company
    Joint Ventures are often used in Qatar as a means for 2 businesses to pursue projects together as a way to improve their possibility of being given a particular contract. By working together, they share the cost and risks associated with carrying out the contract. This structure can either be incorporated (IJV) or unincorporated (UJV), with the former recognised as a legal entity and the latter being seen as a contractual agreement.

  • A Public Shareholding Company
    A Public Shareholding Company must have a minimum of five shareholders, each of which hold an equal share of the company’s capital. They have no liability for the company’s obligations apart from the nominal value of the shares which they hold.

    The minimum share capital for this type of company is QR10,000,000 (ten million Qatari Riyals).

  • A Limited Shares Partnership Company
    A Limited Shares Partnership Company is formed by two parties: One or more ‘joint partners’ who have personal liability for the debts of the company and a minimum of four shareholding ‘trustee partners’ whose only liability is for the shares held in the company capital.

    For this type of company, a general assembly made up of all joint and trustee shareholding partners must be put together and the minimum share capital required for incorporation is QR1,000,000 (one million Qatari Riyals).

  • A Holding Company
    A holding company holds shares in one or more other companies. The objective for creating this type of entity is to control other existing companies. It can own trademarks, real estate and other assets but does not participate in the company’s general activities.

  • Free Zones
    Qatar free zones represent an excellent option for foreign investors. They are considered separate from the domestic state area with regards to legal requirements and customs rules and as such allow 100% foreign ownership as well as other key benefits such as 0% corporate tax and zero customs duties on imports.

    There are currently three free zones within Qatar, all of which are governed by the Qatar Free Zone Authority (QFZA) and are within 30 minutes of the country’s capital, Doha.

How can PRO Partner Group help?

We understand that entering and developing in new markets is challenging. We can help you identify the correct legal entity for your business 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, or any other related company setup, restructuring, local partner or PRO support matter in Abu Dhabi, Dubai, the wider UAE, Oman or Saudi Arabia then please do get in touch with us on +971 (0)4 456 1761 for Dubai, or +971 (0)2 448 5120 for Abu Dhabi, email us at info@ppg.ae or complete the contact form below and we will be delighted to assist you.

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