100% Foreign Owned Company's in Qatar
Daniel has had many ideas in the 5 months he has been visiting Qatar, however, nothing bothers him more than the fact that he has to write off 51% of his stake to a complete stranger. His mission to find out a 100% foreign owned option in Qatar has led him to multiple entities, however, BBMS was one entity that was open to sharing everything they knew to help him in his quest. Multiple requests passed and not once did they push their agenda on setting up in a way that was not comfortable for him.
BBMS made it very clear that there are a few ways to set up as a 100% foreign owned company. Below is a list of the various types of entities that can be registered as a 100% foreign-owned entity:
1. Branch Office
2. Trade Representative Office
3. Limited Liability Company
4. Free trade zone company registered in areas like QFC or QSTP
1. Branch Office:
Many times, foreign a company will win a bid and would need to have legal representation in Qatar to execute these projects that are won by them. This means that they need to set up locally or alternatively, they can get a special exemption from the Ministry of Industry and Commerce that allows them to set up a branch office of the foreign company that will undertake the said project that they have won. The project won, would only valid and permitted for approval if it has been granted from a Governmental or Quasi Governmental organisation. This branch office would have restrictions with respect to its activities, such that they only extend to the undertaking of the project won and they cannot conduct any commercial activity outside of the won project. Such branches are 100% foreign owned and foreign managed and do not need any 51% local shareholding to operate.
2. Trade Representative Office:
In 2006, a decree was passed which allowed foreign companies to set up a trade representative office without a 51% local partner. These entities are restricted in their commercial activities such that they cannot conduct financial trade within the country. i.e. they are not permitted to invoice from the Trade Representative Office. This means that they are non-taxable as they do not have any income within the country. The purpose of this kind of entity is to showcase products that the foreign company may have within Qatar with the restriction to trade the same from the entity. The entity is in effect a showroom where products are displayed for view and orders can be placed to the foreign entity.
3. 100% foreign owned LLC:
As per the Commercial Law, any Limited Liability Company needs to be owned by a Qatari or a 100% Qatari company. However, exceptions to this rule do exist and can be executed provided the required clearances are given for the company. The mandatory 49% foreign shareholding can be exceeded provided the company operates in the fields of agriculture, health, education, tourism, natural resources or mining or energy sectors, technical consultation and information technology services. Any company that wishes to hold more than 49% as foreign shareholder needs to apply for the same provided they fall in the given sectors and are considered on a case by case basis. There is no guarantee that such an approval would be granted, however, if the Government feels that the company is making ground in achieving the country's goals and its betterment, the decree may be passed in favour of the applying company. It must be understood that only a handful of companies have actually got such kind of exemptions to set up as a 100% foreign owned company.
4. Free Zone Company's set up in Qatar Financial Centre (QFC) and or Qatar Science and Technology Park (QSTP) can be 100% foreign owned provided it meets the criterion of these Government established organisations.
QFC has very stringent operational requirements for companies, whether it includes regulated activities or unregulated ones. If you are registering under the QFC, you will only be able to operate under the QFC's approved activity list which is rather small in comparison to what the Ministry of Industry and Commerce provides.
QSTP registrations ensure that you must be engaged in research and development activities in Qatar in the areas of Science and Technology. The park was designed to invite startup companies that did not have the economic backing to set up within Qatar without investments. QSTP funds promising startups on a case to case basis.
Other Free Zones are coming up encouraging the manufacturing industry and other sectors such as agriculture etc. This is spearheaded by Manateq, a Quasi Governmental organisation that promotes fields of need in Qatar. You can read more about them at www.manateq.qa.
Like Daniel, If you are looking to set up a company in Qatar and are unsure of the process' and don't want to be bogged down by all the bureaucracy, feel free to contact our Business Development Team who would be happy to spend time to help you in your decision. You can reach us at +974 40120333 or email us at email@example.com