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Company Formation in Qatar

Overview :

Qatar has prospered in the last several years with continued high real GDP growth in 2011. Qatari authorities throughout the financial crisis sought to protect the local banking sector with direct investments into domestic banks. GDP rebounded in 2010 largely due to the increase in oil prices and 2011′s growth was supported by Qatar’s investment in expanding its gas sector.

Economic policy is focused on developing Qatar’s non-associated natural gas reserves and increasing private and foreign investment in non-energy sectors, but oil and gas still account for more than 50% of GDP, roughly 85% of export earnings, and 70% of government revenues. Oil and gas likely have made Qatar the second highest per-capita income country – behind Liechtenstein – and the country with the lowest unemployment. Proved oil reserves in excess of 25 billion barrels should enable continued output at current levels for 57 years.

Qatar’s proved reserves of natural gas exceed 25 trillion cubic meters, more than 13% of the world total and third largest in the world. Qatar’s successful 2022 world cup bid will likely accelerate large-scale infrastructure projects such as Qatar’s metro system and the Qatar-Bahrain causeway.

Advantages of incorporating business in Qatar
  • Qatar is the wealthiest country in the world in per capita terms with substantial oil and gas reserves, an excellent infrastructure system and free market economic policies.
  • The Foreign Investment Law No.13 of 2000 has also played an important role in stimulating economic growth. The law permitted up to 100% foreign ownership for the first time in the sectors of agriculture, manufacturing, health, education, and tourism.
  • Sustained high oil prices support budget surpluses and high liquidity levels in GCC economies. This is accompanied by rising economic growth, and increased investments in infrastructure development.
  • Key Investment themes remain liquidity driven infrastructure investments and consumer related services.
  • Corporate sector involved in hydrocarbons, logistics and transportation, real estate development & construction, retail and financial services are the key beneficiaries
  • Impressive growth rates propel the economy towards further expansion and diversification. Government has an ambitious plan to reduce dependence on hydrocarbons revenue from the current 60% to 25% by 2015. Government plans to spend $63 billions to boost economic diversity.
Tax Regime :
  • There are no personal taxes, social insurance or other statutory deductions from salaries and wages paid in Qatar. However, income arising from business activities (rent from property, consulting, etc) is taxable.
  • The new corporate tax rate in Qatar is a flat 10%.
  • There is no Sales Tax, no Estate Tax and no Gift Tax in Qatar.
  • There is no Vat in Qatar. A low level of 5-7% may be introduced after 2013.

Types of entities

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.

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- (1) Joint Partners & (2) Trustee Partners.

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.

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 of

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.

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.

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.

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.

Time Period

Usually, Incorporating a Company takes about 12-15 days.