Qatar welcomes foreign investors and business start-ups, so it is not surprising that it is a prime target for new businesses in the region. Numerous tax exemptions and financial incentives can make setting up a business in Qatar extremely rewarding. There are many things to consider when setting up a business in Qatar. Jane Ashford, Managing Director of Venture Partner Qatar, has helped hundreds of organisations and foreign businesses set up a profitable corporate presence in the region. Here, she shares her valuable experience.
1. What sorts of legal business structures are used in Qatar?
The first thing to consider is, ‘what sort of business structure will suit your business model?’
The three most popular business structures for foreign investment in Qatar are:
- Limited Liability Company (LLC)
- Branch Office
- Representative Trade Office
Of these structures, LLC is by far the most common form used by foreign investors, however deciding which type you use depends on your business and how you are connected to companies outside the country.
Each structure has different set up procedures, local ownership requirements and tax structures. There are a number of business set up companies, which can help guide you and outline the pros and cons of each structure.
2. How do I start an LLC in Qatar?
Similar to other countries in the Gulf, Qataris must own at least 51% of an LLC. Nevertheless, this does not mean that profits and shareholdings have to be apportioned this way. An agreement with your local partner can stipulate a different arrangement and level of involvement in the business and can be detailed in the Articles of Association.
There are several business types where 100% foreign ownership is allowed. These include consultancy services, information technology, distribution services, culture and entertainment and cover sectors as diverse as agriculture, education, health, manufacturing and tourism.
In order to set up an LLC, you must first have a minimum of QAR 200,000 capital. This is put on deposit until you gain an approved Commercial Registration at which point the funds can be released into the business.
3. Is a Branch Office right for my business?
The Branch Office model is designed for a foreign company holding a specific contract with a Government entity in Qatar. A company can set up a branch office when authorised by the Ministry of Economy and Commerce. The branch office model differs from the LLC in that there is no requirement to have a Qatari partner and it can be 100% foreign owned. The downside is that unless a branch office is granted a special exemption it will be subject to the tax conditions of the parent company, so can not take advantage of the beneficial tax rates on offer in the Middle East.
4. How does a Representative Trade Office Work?
The Representative Trade Office acts much like a local shop front, promoting a foreign company’s product in Qatar. A Representative Trade Office may not be the right option for your company if you are ready to start trading in Qatar immediately. There are restrictions on how RTOs operate, most particularly that it cannot sell or export anything other than what it imports as commercial samples. As with a Branch Office, the foreign company may own 100% of the business and there is no requirement for a Qatari partner.
5. How do I choose a Qatari partner?
After considering the options you may seek a company in the region that can assist with business set up. If an LLC is the best model for you, then you will need to find a Qatari partner. The choice of partner is important as while they may own shares in the company, they are not obliged to contribute practically nor financially. Therefore finding the right partner is essential.
One option is to partner with a local business set-up specialist such as Venture Partner Qatar.
6. Is there tax in Qatar?
Qatar is not a tax free zone but does have several significant tax advantages over comparable economies. There is no income tax and how much tax companies will pay, depends on their individual set up and circumstances. Make sure you get expert tax advice to maximize profits and minimise tax to what is legally required. You will also need to submit financial statements prepared by an auditor registered in Qatar if annual profits exceed 100,000QR.
7. Do I need to have office space?
In order to obtain a trade license, it is required by Qatari law that all companies have a 12-month lease on office space. This can be the single largest cost for businesses setting up in the region and should be factored into your pre-setup planning.
8. Does it help to have local advice when setting up my business?
Finding the right local advice can save an enormous amount of time, money and a great deal of stress.
Experts, such as those at Venture Partner Qatar specialise in providing foreign investors with advice on the most efficient and profitable way to set up your business in Qatar and the wider Gulf region.
9. What is the next step to setting up my business in Qatar?
Do some research and get planning!
Qatar can be a great place to open a business but you need to do your homework. A great place to start is to link up with other people in a similar industry who have made the move. Networking, especially amongst people in the same or similar fields can give you important feedback on your ideas and their feasibility. You can also research online.
Start to develop a business plan and marketing plan taking into consideration realistic costs and timeframes. And talk to an expert in the region who has in-depth knowledge on how to set up a business. They can give you a realistic perspective on setup up a business in the Gulf.
Jane Ashford is Managing Director of Venture Partner Qatar. Jane has assisted in the formation of over 200 Limited Liability Companies, Representative and Branch Offices in the region and has been recognised for her remarkable skills building relationships and providing excellent client services. Jane is focussed on bringing more businesses to the region to enable them to take advantage of this growing economy.
Venture Partner Qatar specialises in providing companies with a seamless and financially efficient means to setting up a profitable corporate presence in Qatar, Oman and the UAE. Contact Jane on email@example.com or call a member of the team on: