Message from the Chairman
Welcome to the QBBF Website!
The Qatar British Business Forum (QBBF) was established in 1992 under the sponsorship of the British Embassy, to support and enhance business relations between Qatar and the United Kingdom.
The Forum also provides an important platform for its members, who are either representatives of British companies, or senior British nationals working for local institutions, to meet on a regular basis, which provides networking opportunities and to exchange information on business opportunities in Qatar. Memberships take the form of Full, Corporate and Associate and currently, at June 2008, the QBBF has approximately 230 individual and corporate members.
The QBBF recognises that a diverse and enlarged working environment means that although the majority of employment is still in the capital Doha, there is also a significant workforce outside the capital. Accordingly the Forum now holds two regular monthly meetings. On the first Monday of each month the QBBF holds a luncheon where when possible Speakers, considered to be of interest to the membership, are invited to make 15 to 20 minute presentations; these are interspersed with input on commercial activities by the UK Trade and Investment section of the British Embassy. In addition, a monthly "Sundowners" event normally takes place in the third or fourth week of the month, where members, guests and business acquaintances can relax in a convivial atmosphere.
Other popular opportunities exist for members to enlarge their social contacts through the medium of a varied social calendar, which also acts as a useful platform to attract potential members from within the business community. The Social Events normally form around three core functions each year, a formal Ball, a Cheese and Wine Evening and a BBQ; however it is the intention of the Committee to enlarge the number of these events according to the wishes of the members.
The Committee now believes membership is sufficiently large enough to support special sector interest groups (SIGS) and coordinators are being invited to establish these sector groups which are intended to provide a forum for QBBF members and non-members to meet pursuing an involvement or interest across a number of different disciplines.
The QBBF maintains a strong relationship and works closely with the U.K. Trade and Investment section at the British Embassy. Although we have a different focus, an important part of our activities is to support the British Embassy in a number of ways. These include providing contacts to support inward trade delegations and business people visiting Qatar, and assisting the Embassy in advising British companies intending to establish business or trading links with Qatar.
Robert Muir OBE
Chairman
1. Foreign investment restrictions
- Foreign investors may only invest in Qatar in accordance with the provisions of the Foreign Investment Law (Law No. (13) of 2000).
- Foreign investors may invest in all parts of the national economy (other than those set out below) with a Qatari partner who must own at least 51% of the enterprise.
- Foreign investors may not invest in commercial agencies or, broadly speaking, real estate. Approval from the Council of Ministers is required for foreign investment in banking or insurance.
- The Ministry of Economy and Commerce may permit foreign investors to own more than 49% of a company in specified sectors, namely agriculture, industry, health, education, tourism, and the development of natural resources, energy or mining.
- Foreign capital is guaranteed against expropriation (although the state may acquire assets for public benefit on a nondiscriminatory basis, provided the full economic value of the asset is paid for the asset).
- A foreign company which is performing a specific contract in Qatar may set up a branch office if the project "facilitates the performance of a public service or utility".
- A foreign company operating in Qatar under a Qatari government concession to extract, exploit or manage the State's national resources is exempt from the Foreign Investment Law. In practice this covers all the oil majors.
- A company formed by a foreign entity with the government or a government entity (an Article 68 Company) will be subject to special rules.
Back to top 2. Choosing the most appropriate business medium
- A company is the normal vehicle where an on-going business is being set up.
- Various exemptions are available to attract foreign capital.
- In almost all cases a Qatari partner will be required.
- Used where a foreign company is performing a specific contract in Qatar.
- Authorised by the Ministry of Economy and Commerce where the project "facilitates the performance of a public service or utility".
- No need for a Qatari partner.
- Branch is only entitled to perform the specific contract for which it is registered.
- Branch will be fully taxable unless it is granted a special exemption.
- A special regime applies to branches of foreign engineering consultancy firms.
- The foreign company does not establish a presence in Qatar, instead an agent is appointed to market goods and services within Qatar.
- Exclusive agencies must be registered and are governed by Qatari agency law.
- Under a registered agency, commission is payable on all sales of the products within the territory even if the sales are not due to the activities of the agent.
- It is difficult to terminate a registered agency; in addition compensation is payable upon the termination of the agency, including upon the expiry of a fixed term agency.
- A new method of establishing a "shop window" in Qatar.
- Can be used to promote a foreign company in Qatar and try to introduce it to Qatari companies and projects.
- Cannot be used to contract to do business in Qatar. Business must be carried out by a foreign entity (where the contract can be performed substantially outside Qatar) or by a company or branch authorised to do business in Qatar.
3. Company structures
The two forms of vehicle most likely to be of interest to foreign investors are Limited Liability Companies (LLCs) and so-called Article 68 Companies. (Other possible legal entities under Qatari law are the Simple Partnership, the Joint Partnership and the Qatari Shareholding Company (QSC) but foreign participation in these bodies is restricted).
- Minimum capital of QR 200,000.
- Must have at least 51% Qatari ownership unless an exemption has been obtained.
- The parties' profit shares do not necessarily have to reflect their shareholdings.
- 10% of each year's net profits must be kept within a company until the reserve stands at 50% of the share capital.
- May not raise capital by public subscription and may not issue freely transferable shares or bonds.
- Shares may only be transferred after they have first been offered to the other shareholders by way of pre-emption, unless the other shareholders have agreed to waive their right.
- May not carry out banking or insurance business or provide investment advice or investment services to third parties.
- Formed by an investor, which may be foreign, with the Government or a 51+% Government owned entity.
- The foreign investor's share of the company is a matter for negotiation but can be greater than 51%.
- Corporate structure is a "Qatari Shareholding Company with Government Participation"
- Falls outside the Foreign Investment Law and, to a certain extent, the Commercial Companies Law.
4. Commercial registration and other formalities
Using a "facilitator" or "government liaison officer"
Virtually all companies use a "facilitator" or "government liaison officer" to carry out all the necessary registration formalities. Such a facilitator will also be invaluable for obtaining residence permits, driving licences and telephone, power and water connections etc. A facilitator will know all the ins and outs of the relevant procedures and requirements and will help minimise any frustrations which might otherwise be experienced when setting up. Consequently, the steps set out below are only a brief high level guide to what is required.
Company Formation
The following are required in order to incorporate a company and obtain a Commercial Registration:
- Memorandum and Articles of Association in Arabic which conform with the standard form prepared by the Ministry of Economy and Commerce.
- Notarised, authenticated and consularised copies of the foreign company's Certificate of Incorporation, Memorandum and Articles of Association.
- Documents indicating the deposit of the share capital at a bank.
- A lease contract for the office of the company.
- Chamber of Commerce Registration.
Once the company has been incorporated and the Commercial Registration issued the share capital can be released to the company's directors or the general manager for the purposes of running the company. The following licences must then also be obtained:
- Municipal licence.
- Signage licence.
- Employer's Immigration Department identity card.
Branch Office
The following are required in order to establish a branch office and obtain a Commercial Registration:
- Authorisation from the Ministry of Economy and Commerce to establish a branch.
- Notarised, authenticated and consularised copies of the foreign company's Certificate of Incorporation and Memorandum and Articles of Association.
- A notarised, authenticated and consularised power of attorney from the foreign company to the manager of the branch.
- A copy of the contract in respect of which it is sought to establish the branch office. Chamber of Commerce Registration.
- A lease contract for the office of the company. Once the branch has been approved and the Commercial Registration issued the following licences must also be obtained:
- Municipal licence.
- Signage licence.
- Employer's Immigration Department identity card.
If applicable, the company/branch will also need to be entered in the Importers' Register and/or Contractors' Register.
5. Taxation
- Income tax is levied on businesses other than those wholly owned by GCC nationals.
- Income tax is charged on all profits arising in Qatar, including profits on the sale of the company's assets.
- The share of profits of the Qatari or GCC partner in a business is exempt from tax.
- An income tax exemption can be granted for a period of up to 10 years for major projects if they meet certain criteria.
- Some countries have double tax treaties with Qatar, but if not unilateral relief may be available, for example UK unilateral relief is available against UK taxes where Qatari income tax has been paid. Tax is payable at the following progressive rates:
0 - 100,000
Exempt100,001 - 500,000
10%500,001 - 1,000,000
15%1,000,001 - 1,500,000
20%1,500,001 - 2,500,000
25%2,500,001 - 5,000,000
30%5,000,001+
35%Individuals
There is no income tax on personal salaries
Customs duty
The new GCC customs duty is 5% on most items. Exemptions from customs duty can be obtained for the import of equipment relating to a particular project as can exemptions from customs duty for the import of primary or semi-manufactured materials where they are not available locally. In addition to customs duty, legalisation fees are payable on import documentation.
6. Staff
- A "Qatarisation" initiative is in place which aims to increase the number of Qatari nationals in the public sector workforce. The new Labour Law introduces Qatarisation initiatives for private sector entities. The employment of Qatari nationals is one of the criteria taken into account when tax exemptions are granted.
- All contracts of employment are governed by the Labour Law. They must be in Arabic and approved by the Labour Department.
- In particular, employers should be aware of the requirement to pay end of service benefits to employees.
- Companies will need to obtain residence and work permits for their expatriate staff. A new Labour Department Committee has been established to supervise applications for bringing in foreign workers.
- All expatriate employees must be sponsored by their employer who is responsible for them while they are in Qatar.
7. Premises
- Ownership of land by foreigners is restricted.
- Land for projects can be given to foreign investors on long term leases for periods of up to 60 years which may be renewed.
- A recent law now permits foreigners to own properties in three new developments for the first time.
8. Commercial contracts
Once a business entity has been established it will need to protect its interests when contracting with other entities.
- The parties to an international contract are free to choose the law and jurisdiction which will govern that contract. (If they do not choose an applicable law, the contract will be governed by the Qatari Civil Code.)
- The parties may also agree in writing to refer disputes to arbitration.
9. Intellectual property
Traditionally, intellectual property rights were not as well protected in Qatar as foreign investors were used to, however new trademark and copyright laws were enacted in 2002.
Trademarks
Trademarks can be registered at the Trademark Office.
- Registrations are valid for 10 years from date of filing (renewable).
- Trademarks can be cancelled if not used for periods of 5 consecutive years in Qatar.
- The international classification of goods and services is used, a separate application must be made for each class.
- Non-Qataris have the same rights as Qataris provided that their country treats Qatar reciprocally.
- The Qatari copyright law protects original literary and artistic works including computer programmes and databases which are creative in the selection and arrangement of their subject matter.
- Protection extends, inter alia, to non-Qataris whose work is first published in Qatar or is published in another country and then published in Qatar within 30 days of the first publication date, and to works protected by international agreements.
- There is no Qatari patent law - cautionary notices can be published in the press.
- A GCC patent can be obtained by filing at the Patent Office in Riyadh, Saudi Arabia.
- Inventive designs or industrial models can be registered under the Trademark Law.
- Protection lasts for 5 years (renewable for 2 further 5 year periods).
10. Culture and customs
A 'soft' point but don't forget to provide your staff (both those based in Qatar and those to whom they will be reporting in the head office) with a briefing on local culture and customs.
As already mentioned a facilitator who knows the system can be extremely useful to guide you through the required paperwork and practical steps, and to advise you on cultural issues - but it is also vital to have a well-briefed individual from your organisation on the ground when setting up to work alongside a facilitator and/or local partner.