Assistance to Startups
Qatar is the new global hotspot for businesses on an international and domestic level. The FIFA World Cup which was awarded to Qatar in 2012 has been a harbinger for international companies to set up their branches in the business fertile soil of Qatar. This has also prompted many enterprising and innovative individuals to venture into a variety of business pursuits ranging from information technology to telemedicine to online marketplaces for IT solutions, construction materials etc.
In the backdrop of the World Cup, Qatar is an exciting place to give wings to your innovative business ideas. The State of Qatar hosts multiple business jurisdictions which cater to the unique requirements of different businesses. A company can be incorporated in any of the following jurisdictions:
- 1. Mainland (Incorporated with the Ministry of Commerce and Industry (“MoCI”)
- 2. Qatar Financial Centre
- 3. Qatar Science and Technology Park
- 4. Mainland Company (MoCI)
Local company can be incorporated under the Commercial Companies, Law No. 11 of 2015. The Foreign Investment Law provides that a non-Qatari (foreign investor) can have a company incorporated with the MoCI wherein his/her shareholding will be restricted to 49% or less and a Qatari individual is mandatorily required to hold 51% of the company.
The Commercial Companies Law provides for the following eight types of legal entities:
- 1. General partnership
- 2. Limited partnership
- 3. Partnership limited by shares
- 4. Unincorporated joint venture (particular partnership)
- 5. Public or private joint stock companies (shareholding companies)
- 6. Limited liability company (LLC)
- 7. Single person company
- 8. Holding company
There is no minimum paid up capital requirement and the liability of the shareholders is limited to the amount of their respective percentage ownership in the company’s capital. Even though the foreign investor is allowed to own 49% of the share capital, the foreign investor can presume significant control over the management and operations of the company.
A company can be incorporated by drawing an Articles of Association (AOA) setting forth its terms of governance and related matters. The AOA must be drawn up in Arabic, with or without a parallel English version, approved by the MoCI and legalized before the Ministry of Justice. To carry on its business in Qatar once the AOA is signed and legalized, the new LLC must register with the Qatar Chamber of Commerce and Industry and obtain a commercial registration from the MoCI, a municipal license (also known as a trade license) from the Municipality and an immigration card (also known as company ID) from the Ministry of Interior. The establishment process is fairly straightforward. However, in certain circumstances, depending on the nature of the proposed activity, pre-approval(s) may be required from the relevant authorities in Qatar.
ILC has assisted multiple startups to set up their entity with the MoCI as well as a number of reputed MNCs to set up their branches in Qatar.
ii. Qatar Financial Centre
The QFC was established by Law No. 7 of the Year 2005 to be a financial and business hub with the objective of attracting international financial and business services providers. The QFC aims to operate at international standards and provide a world-class business and regulatory infrastructure for investors seeking to do business in Qatar.
What makes the QFC unique when compared to other financial centers in the Middle East is that it has no physical boundaries. Entities registered under the QFC may operate internationally and in Qatar. Entities established under the QFC can be fully owned by foreign investors. Repatriation of capital and profits is permitted with no restrictions. The QFC allows for various types of legal entities, including LLCs, general and limited partnerships and protected cell companies. All QFC entities must be licensed by the QFCA through the QFC’s Companies Registration Office. Entities wishing to work within or throughout the QFC must be engaged in specific activities and must obtain a license from the QFC authorities. The permitted activities fall into two categories: Regulated activities and Non-regulated activities.
iii. Qatar Science and Technology Park
The QSTP is a part of the Qatar Foundation. It is a center of research and commercial excellence for scientific development. The QSTP aims to be the Middle East’s leading location for the development and commercialization of technology. It requires that any entity wishing to incorporate within the QSTP must undertake activities that contribute to the advancement of technology. Operating within the QSTP may occur through an entity established under the QSTP or a branch office of a foreign company. A license is required in both cases. The QSTP provides the following three tiers of licenses:
Standard license – entitles the licensed entity to all free zone benefits.
Restricted license – limited free zone benefits are provided at the discretion of the QSTP management.
Service license – issued to entities providing services to QSTP tenants. No free zone benefits are granted.
iii. Qatar Free Zone
The QFZ was established by Law No. 34 of the Year 2005 and amended by Legislative Decree No. 21 of 2017 to tailor to the logistics, trading, chemicals and emerging technology sector industries. The QFZ aims to provide a seamless and bureaucratic free process for incorporation and registration of 100% foreign-owned limited liability companies or branches of foreign-owned entities. An independent authority, the Qatar Free Zone Authority (QFZA), was created in 2018 to oversee and regulate the QFZ. As part of its ambitions to maintain global competitiveness, the QFZA exempts free zone companies from direct and indirect taxes (corporate and income tax) and applies a zero customs duty policy.
We, at ILC, have provided important legal and general business advice to different startups engaged in providing diverse services and products. In collaboration with Doha Incubation Centre, we have advised a minimum of 100 startups, and we have established long standing relationships with most of these startups. We provide end to end assistance for incorporating entities with the MoCI, QFC, QSTP and QFZ.