Qatar has a very specific set of rules and guidelines for foreign countries who wish to do business in the country. The first step to begin a business in Qatar is to have a sponsor. The rule of having a sponsor to do business in Qatar might be done away with in the near future as this particular rule is being gradually relaxed to attract more investments from foreign countries.
Overseas organizations who wish to do business with Qatar are required to assign an agent who will represent the business. There are two types of agents who can be assigned.
A ‘commercial agent’ has to be appointed if a business wishes to export products to Qatar. This type of agent could either be a sales representative or a distributor.
A ‘sponsor’ or ‘service agent’ has to be appointed if a particular project is to be done for a private owned Qatari organization and you will have to return to your country when the project is completed. The appointed person will take care of the paper work to be submitted to the Qatari government. In case the project is to be done for the government or for a public service, it is not mandatory to appoint a service agent or sponsor.
Majority of the foreign businesses in Qatar are registered as a Limited Liability Company. Under this format the foreign business cannot own more than 49% of the business and the other 51% is to be owned by a Qatari national. New Qatari laws allow foreigners to be eligible to 80% or more of the profits generated by the business if the foreigner plays a more active role in the partnership. This type of business does not require a sponsor or a service agent.
Foreigners are not eligible to own land in any part of Qatar that they wish. There are some real estate projects like the Pearl of the Gulf where they are allowed to own land. They can, however, rent land on a long-term basis for up to 50 years based on the nature of the project.
Personal income tax in Qatar is not collected but firms which are based overseas are required to pay tax on income generated from business dealings in Qatar. The income tax rate is 0% on businesses doing a turnover of less than QR 1,00,000 and this goes up to 35% on a turnover of more than QR 5 million. Businesses are eligible for certain tax exemptions if the business activity benefits Qatar directly, or if the business uses modern infrastructure, or if it meets a strategic goal laid down by the Qatar government. For goods imported into Qatar, the accompanying original documentation has to be produced. Commercial invoices, shipping documents, list of contents and Certificate of Origin have to be present for all goods being imported into Qatar.
5% is the Customs Duty levied on general cargo coming into Qatar. Goods being imported for a temporary period require permission from the General Director of Qatari Customs, besides a check or an accompanying bank guarantee. The duty on these goods will be refunded once the corresponding proof of export from Qatar is submitted to the Customs Department. The Customs Department in Qatar is highly efficient and it takes 1-2 days to obtain air clearance and 2.4 days to obtain sea clearance.
Qatari government must permit foreign investors to be able to invest in banking and insurance industry.
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