Setting up a company in Qatar as a foreigner: the rule and the steps

Qatar rewrote its foreign ownership rule in January 2019. A non-Qatari investor may now hold up to one hundred per cent of the capital in most economic sectors. This guide sets out what the law allows, how the application is decided, what the file has to contain, and the steps that turn an approval into a company on the commercial register.

The rule: up to one hundred per cent of the capital

Law No. 1 of 2019 states it in one sentence. Subject to the legislation governing the practice of commerce and the professions by non-Qataris, and subject to Article 4, a non-Qatari investor may invest in all economic sectors up to one hundred per cent of the capital, as the executive regulation provides. The fifty-one per cent Qatari partner came from Law No. 13 of 2000, which the 2019 law replaced; the older law is recorded on the Al Meezan legal portal as repealed.

A non-Qatari share of forty-nine per cent or less needs no separate approval under this law. Anything above that does, and that application is the subject of the next two sections. What does not change either way is a short list of fields closed to a non-Qatari investor altogether.

• Banks and insurance companies, except those exempted by a decision of the Cabinet.
• Commercial agencies.
• Any other field designated by a decision of the Cabinet.

The application to exceed forty-nine per cent

Article 3 of the Law and Article 3 of the executive regulation describe the route between them. The application goes to the competent department at the Ministry of Commerce and Industry, on the form the department issues, with the supporting documents it specifies, after the prescribed fees are paid.

1. 1The department enters the application in a register of its own, with the date, a serial number, the applicant's name, the subject, and a list of the documents attached.
2. 2The application is referred to the other authorities concerned, so that each issues the approval its own legislation requires.
3. 3Those authorities reply within the periods agreed with the department in the service's key performance indicators.
4. 4The department decides within fifteen days of the required documents being complete, and notifies the applicant by registered letter or any other means that proves knowledge.
5. 5Where it approves, it records the decision, notifies the Ministry's commercial registration unit with the other authorities' approvals attached, and tells the applicant to proceed with registering the company.

The Law then fixes what an application that receives no answer means, and how long its owner has to challenge a refusal.

1. 1Fifteen days pass from the date the documents are complete without a reply: the application is treated as refused.
2. 2The applicant may petition the Minister within fifteen days of learning of the refusal, or of the date the application became a refusal.
3. 3The Minister decides the petition within thirty days of its being filed.
4. 4That period passing without a decision is a refusal as well, and the Minister's decision on a petition is final.

What the approval is decided against

The executive regulation, issued as Minister of Commerce and Industry Decision No. 44 of 2020, sets the conditions. They fall on the investor and on the project separately.

• A natural person must have no final judgment against them in a felony, or in an offence against honour or trust, unless rehabilitated.
• A legal person must be a company incorporated under the law of the country of its head office, and the activity applied for must accord with its objects.
• In either case the proof must be documented and attested by the competent authority in the country of the head office and by the Qatari Ministry of Foreign Affairs.
• The project's activity must be on the list of activities approved by the Minister on the department's proposal.
• The investor must file a description of the activity, a business plan and a financial plan for the project.

The documents, as the Ministry publishes them

• An investor resident in Qatar: a Qatar Credit Bureau certificate, with copies of the residence card and the passport, in order to apply for a police clearance certificate through the Single Window.
• An investor from outside the country: a police clearance certificate from their country of residence.
• Where the owner is a company: its constitutive contract, commercial register and commercial licence, its representative's authorisation with their passport and identity card, and a collective resolution of the partners.
• Proof of the general manager's identity, and a letter of no objection from the manager to being entered in the commercial register.
• An official power of attorney for whoever acts on behalf of the owner or the partners, where one is used.

The form most companies take

A limited liability company under the Commercial Companies Law is formed of one or more persons and may not exceed fifty partners. A partner is liable only to the extent of their share in the capital, and the shares are not tradable securities. The company may not raise or increase its capital by public subscription, nor issue tradable shares or bonds.

The company is not incorporated until every cash and in-kind share has been distributed among the partners and paid in full. The cash goes into an approved bank in the State, which may release it only to the company's managers, and only against proof that the company is on the commercial register. The manager applies for registration with the constitutive document attached; the application is decided within fifteen days of being filed with the necessary documents, and the company may carry on no business at all before it is registered.

The steps, in order

1. 1Reserve the trade name with the Commercial Registration and Licences Department.
2. 2Confirm the intended activity is on the list the Minister approves, and obtain the consent of the authority responsible for that activity where one is required.
3. 3Where the non-Qatari share will exceed forty-nine per cent, file the application with the competent department and wait for its decision.
4. 4Complete the constitutive document on the Ministry's form and have it certified by the Ministry of Justice, with proof of identity for the founders and the authorised signatory, and a power of attorney where somebody acts for them.
5. 5Distribute the shares in full and deposit the cash capital in an approved bank in the State.
6. 6Apply to enter the company on the commercial register, and start no business before the registration is issued.

What the Law gives in return

• Investments are not expropriated, nor subjected to any measure of similar effect, except for the public benefit, without discrimination, and against fair and appropriate compensation under the same procedures applied to citizens.
• Returns, the proceeds of a sale or liquidation, sums arising from the settlement of investment disputes and that compensation may all be transferred abroad without delay, in any convertible currency at the rate on the day of transfer.
• The investment may be transferred to another investor, who takes the previous investor's place in the rights and obligations and continues to be treated under the same law.
• Any dispute other than a labour dispute may be settled by arbitration or by another recognised means of settlement.

Alongside those, machinery and equipment needed to set the project up are exempt from customs duty; industrial projects are exempt on imported raw and semi-manufactured materials needed for production that are not available on the local market; and exemption from income tax is available on the terms the Income Tax Law sets.

What a breach costs

The Law does not open with a fine. Article 19 has the competent department notify the investor of the breach and allow a period of not more than three months from the notice to correct it. If it is not corrected, the licence is cancelled and the company or the branch is struck from the commercial register, with the other government bodies concerned informed. A petition against that decision follows the same procedure as Article 3.