What is the business culture in Qatar?
The business culture in Qatar is best suitable for patient and polite foreign investors. Arabs are friendly and helpful people and are inviting to most types of businesses. However, it is recommended that investors should do thorough research on how to open a business in Qatar in their domain and the regional tax audit services. A business program should include a thorough study of competitors, the conditions of the market and the results on the forecast. Remember, a credible business plan has the best chance of finding local support.
Gas still forms a major part of the Qatar economy, but the government is actively working on ways to diversify the economy by offering various incentives to draw foreign expertise, investment and businesses into the country.
Who could start a business in Qatar?
There are a few factors involved in the process, they are as follows:
As a foreign investor, you need to first appoint a sponsor or service agent for setting up a company in Qatar. An influential local partner or Qatari sponsor is the best way to navigate through government processes. After this, the local or foreign business has to acquire their commercial registration starting with The MoCI or Ministry of Commerce and Industry.
Foreign investors and business owners need to incorporate an LLC or Limited Liability Company to do business in Qatar. This firm should have two shareholders and an authorised minimum share of QAR 20,000 as capital.
In general, foreign investors could take ownership of a maximum 49% stake in the company, whereas one or several Qatari associates hold the remaining 51%.
How to start a business in Qatar?
Before you think of how to start a company in Qatar, foreign investors need to analyse and create a proper business implementation plan. The simple reason is that the process for setting up a company in Qatar can be bureaucratic and costly for foreign business owners.
In some business sectors, foreign business owners can only hold a 49% stake in the company, while the 51% stake should be owned by the local Qatari partner or sponsor. It is a common practice among foreign investors to hire local consultancy firms to help find a potential local stakeholder. The only exception is that if the foreign investor starts their business in the free trade zone then they can hold full ownership of the company.
You need to begin your company set up in Qatar by doing business registration and then acquiring all the permits and licenses to do legitimate business in Qatar.
What is the legal structure of a business in Qatar?
Types of Businesses
As per Commercial Companies Law, the business should have its head office in Qatar. In general, the types of incorporation companies listed below can do operations in Qatar. They are as follows:
It consists of 2 kinds of partners - Trustee partners and Joint partners.
Equities Partnership Company:
This consists of two groups - the first group has more than one partner while the shareholders encompass the second group.
Limited Partnership Company:
It consists of one or more local partners from Qatar. They are responsible for the debt and assets of the company. Foreign ownership gets restricted at 49%. This is the best way to open a company in Qatar.
Limited Liability Company:
It consists of a minimum of 2 and a maximum of 50 partners with limited responsibilities.
It consists of the shareholding agreement that forms the basis of company formation.
Particular Partnership Company:
It consists of 2 or more associates.
Self-employed or Freelancer:
To find work as a freelancer you need a sponsorship business.
What is taxation for businesses in Qatar?
As you learn how to start a company in Qatar, you also need to understand the tax structure in Qatar. The business which is entirely or partially under foreign ownership has to pay certain taxes. The profits are subject to corporate taxation at the rate of 10%.
Qatari companies that make payments to foreign businesses with no permanent business in Qatar need to pay the withholding tax.
The following are exempt from the tax laws:
- Not for profit organizations
- Private foundations associations
- Gross income from inheritances and legacies
- Allowances, wages and salaries
How can foreign companies open a subsidiary or brand?
The parent company can open a branch office in Qatar, which could be 100% owned by a foreign company. However, as per the tax jurisdiction, the profit will be liable for corporate taxation.
To set up a branch office you need to have the authorization of The Ministry of Economy and Commerce. In this case, it is better to register the company as the subsidiary company instead of the branch.
How to set up an offshore firm?
If you want to do an offshore company set up in Qatar, you need to understand the various positives and negatives of setting up a company in Qatar.
An offshore incorporation process is rather straightforward in Qatar. You can get wider benefits for the company principals and the company.
It is important to gather information about the different steps on how to start a business in Qatar, especially if it is an offshore company. You need to understand the reduction in tax liability and privacy laws including others while setting up an offshore business in Qatar.
In these simple steps, you could know how to open a company in Qatar. If you want more information, you must visit AAQA today.