One of the hottest locations that international organizations are looking to expand into is the country of Qatar. Featuring some of lowest tax rates and the 4th largest per-capita GDP in the world, this oil-rich country is a favorable climate to do business in. For foreign entrepreneurs that have aimed to establish their businesses in Qatar, there are a number of regulations and formalities to follow to get started.
In this article, we’ll take a look what it takes to set up a business in Qatar, as well one method that can help jumpstart your organization’s Qatari presence without all of the red tape.
Free-Zones in Qatar
Before establishing your Qatar-based business, you must first determine in which zone your company should operate, either in the free zone or outside the free zone. Regulations differ significantly between these two zones. For businesses in the free zone, foreigners can:
- Hold 100% of the company’s shares
- Import duty-free goods/service
- Sponsor foreign employees
- Repatriate profits and capital without the restrictions of the non-free zone (with authorization by the Qatari government).
Outside of the free zone, there are a number of regulation and restrictions that can inhibit your business’ activity in Qatar. (We’ll cover some of these in the next section.)
Allowable Types of Companies
Entrepreneurs should be aware of the different types of companies that can be established in Qatar as foreigners. This includes:
- Limited Liability Companies
- Single Shareholder or Owner Company
- Rule 68 Company
Let’s examine each of these in detail.
- Limited Liability Company:
To begin with a limited liability company, you must have a minimum capital of QR 200,000 (~$55,000 USD). LLC’s in Qatar require a Qatari partner who owns a majority of the company’s shares (at least 51%) without the involvement of any state-owned company. LLCs are required to pay 10% of its profits per fiscal year in taxes. Lastly, LLCs cannot undertake insurance, banking, or investment-related activities.
- Single Shareholder or Owner Company:
This type of company is similar to an LLC in terms of its requirements (capital, tax requirements), but it doesn’t require a local partner. Note that businesses that focus on agriculture, health-related activities, and tourism must be justified to the Ministry of Economy and Commerce of Qatar.
- Section 68 Company:
Section 68 companies require a partnership with a state-owned company or with a Qatari company whose majority of shares is owned by the state. With approval from the Council of Ministers of Qatar, a section 68 company can hold more than 51%, with the council determining the tax obligations and legal guidelines of the company.
The most common type of business for foreign nationals to establish in Qatar is an LLC, so we will cover how to establish it in this article. For more info regarding the particular requirements on the other types of business in Qatar, refer to the Ministry of Economy and Commerce.
Once you understand which type of company that you want to start in Qatar and where it will operate, you can undertake the conditions and regulations with the assistance of a lawyer. This happens in 3 phases:
- Establishing a Commercial Residence (known as a CR).
- Getting a Trade License
- Getting a Computer Card (known as Signature Card, or Khaid Munshiah in Arabic)
#1 – Establishing a Commercial Residence
With a CR, or Commercial Residence, you will be able to open a corporate bank account, along with invoice and accept payments from your customers, and also purchase and own assets under the name of your company. Here’s what you’ll need to obtain a CR:
You will begin by registering your company’s name with the business inspection department of Ministry of Economy and Commerce (MEC). The name must not be taken or used by another business entity, but it also must have a meaning in Arabic — if not, you must pay QR 1,000.
- Articles of Incorporation:
After you’ve selected a viable trade name, you need to get your articles of incorporation typed up, which lists all the shareholders and their respective ownership stakes.
- Submitting forms:
Now that you have a trade name and you’ve composed the articles of incorporation, you can then submit them to the MEC for your organization to be issued a CR. However, all of your shareholders must be present to verify their identity and you will be asked about your entrepreneurial activities in Qatar, as each comes with its own specific requirements and fee structures. For instance, if you’re establishing a medical clinic in Qatar, you will need approval from the Ministry of Health.
Once you’ve finished these steps, you’ll be issued a CR, which is valid for one-year (subsequent renewals can be completed online).
#2 – Establishing a Trade License
With a trade license, you can secure office space for your business, something a CR cannot do.
The first step to get a trade license is to fill out and submit the application form from the MEC website, and submit it to the MEC. You’ll have to submit the following documents:
- Your CR
- Your Articles of Incorporation
- The IDs of each of the authorized persons in your business
Your prospective space requires a few items, including:
- A photo of your office building from the outside, which includes the blue plate that has the building’s address information.
- An inside photo of your office, which includes the signage with the name of your business on the door to your office.
- The building completion certificate and a copy of the ID of the building owner.
- Rental acknowledgment
- Ownership instrument
- Civil Defense approval
- Authorization letter in real estate rents (for subcontracts).
Once you’ve submitted the documents, a representative from the MEC will inspect your office space, which can typically take 1-4 weeks to schedule. After the inspection has been completed and it is determined to be up to code, the trade license will be ready to be collected at the MEC and you can then pay the requisite fees.
#3 – Securing a Computer Card
To hire employees full-time and issue exit permits as needed, you need a Computer Card to issue them a Residence Permit, which is issued by the Ministry of the Interior. A Computer Card is a document that notes who is the signing authority on behalf of your organization. This can include the Qatari partner in your business or another individual.
The first step to get a Computer Card is to get an official company stamp that’s used on all your business’s official paperwork. This stamp can be made at a major printing press. The stamp will require a copy of your CR, Trade License and ID copies of the shareholders, as well as a small fee (~QR 200).
After that, you are required to go to the Immigration and Passport control office to apply for the Computer Card. You will need the following:
- The application form
- A copy of your CR
- A copy of your Trade License
- ID copies for all the shareholders in the company
- ID copies of individuals that will be included on the Computer Card
Once you have all of the above, you then pay the required fees, and you will be issued your Computer Card.
Virtual Phone Numbers: An Alternate Option
Of course, that’s a lot of work to establish your business in Qatar. However, there is an alternative option for small and medium-sized businesses to get a piece of the Qatari action without having to establish significant capital and paperwork upfront.
Using Qatar virtual phone numbers can be a cost-effective and efficient option to gain a business presence in Qatar without having to pay the upfront costs and fees. Essentially, a virtual phone number allows those in Qatar to contact your business by dialing your Qatar virtual phone number, which is then routed to your company’s phone number of your choice. For instance, you can have a US-based number that appears to callers as originating or being received in Qatar. At that point, you can conduct business as usual.