5 Points to remember when setting up your Company in Qatar
Abhishek just hung up a call from one of his regular clients. He just won a multimillion-dollar deal with them. He is unsure of the mechanics on how to set up or if he does need to set up, but this deal means that he can make his move to make his business and international concern. As much as this is a great opportunity, he needed to secure his investment and he had no clue what to do. He had to invest quite a bit in equipment and machinery to get this project underway.
A quick Google search revealed a company called Bethel Business and Management Services (BBMS) and he went knocking at their doorstep.
BBMS helped him understand the structures that a company can take in Qatar but irrespective of whether Abhishek used their services or not, BBMS was quick to help him understand what the main elements were that he needed to be careful about when starting up a company in Qatar.
Shareholders’ Agreement: BBMS was clear to inform Abhishek to make sure he had a rock-solid clear shareholders agreement which stipulated the relationship that he was getting into with his company and the client. It could be a Joint Venture, or even a setup of a new Limited Liability Company which will then have a JV with the client, but in either case, the fundamental document that needs to clearly outline what the different shareholders’ duties, relationships are with each other need to be written out in clearly. This includes having your share profit structures clearly written out to avoid ambiguity at a later stage. You should also write out and secure your investment through the Shareholder’s Agreement.
Exit Clause: One needs to be sure that you are not trapped and have a clear-cut exit clause in your agreements. Exit clauses are easy to miss when the going is good, but the moment the going gets tough and you need to sever your relationship with your partner, it becomes your lifeline. Most people forget that this is paramount to future proofing your business and in general, good planning.
Track Record of the Service Provider: If you are starting your entity using a third-party company, ensure that this service provider has a good track record. Research the market and understand if this company has good reviews and bad ones as well. One needs to do their due diligence prior to getting in trouble. It’s no use crying over spilt milk. Research reviews and request referrals from the company to whom you can speak with.
Corporate Partner: If you are going to set up a company in Qatar where you have a nominal 51% share partner, then ensure that it is a corporate entity that stands as a share partner. There is more value in having company to company partnerships than having company to individual partnerships. Having a corporate partner means that you are dealing with someone who understands the market place and is a professional in what they are doing. You can be quite at ease to know you are working with the right people.
Control: If you do not have critical control over your entity, then in reality, it is not your entity. You need to be very clear about who has signatory authority in your company and who has financial authority in your company. Are you the only signatory in the bank? Are you the sole decision maker in the day to day affairs of your company? Can you sign contracts on behalf of your company? If the answers to these questions are no, then your company is not secure, and you need to be worried about it.
Visiting Qatar: BBMS further highlighted that one of the most important tasks you would need to do is to visit Qatar. Without a shadow of a doubt, you as the shareholder who is setting up the new company MUST do this and make a preliminary study of the country, the opportunities etc. Don’t leave it to an employee or a consultant. They are not investing their money; you are! If you don’t go and understand the market and move accordingly, you will be sinking your money into quicksand.
If you are looking for unbiased advice on setting up your company in Qatar, then you need not look further. BBMS has it all; a team to help you set up, consultants who are ever ready to help you with the best information that you would need to setup locally. Don’t hesitate to call them at +974 40120333 or email them with any query at firstname.lastname@example.org. Abhishek can testify to the fact that he got the best advice in the city and would highly recommend them (BBMS) to anyone who asks about company formation for Qatar.