Qatar remains one of the most attractive countries for investment by foreign investors and business owners looking to invest in the Middle East. They find it with a lot of benefits when it comes to forming a company in Qatar.
Qatari Government business and investor-friendly policies remain the top reasons. It is evident by Qatar’s rank on the “Ease of Doing Business” index going down from 83rd to 77th.
Let us have a quick look at what these reforms are and how they improved the Ease of Doing Business in Qatar.
- Getting electricity for new businesses made easy. The introduction of an online portal for receiving and reviewing new applications by Qatar’s water and the electricity utility company will help reduce the time required to obtain an electricity connection for new businesses commencing operations in Qatar.
- The ease of registering a property for business in Qatar has also helped along the way, cutting the land registration process to just 11 days. The Qatar government has removed the unnecessary procedures and bettered the quality of its land administration system. It has also published service standards and court statistics on land disputes.
- Streamlining and making efficient the process of getting loans and credit for newly established Qatari businesses.
- Qatar has also introduced reforms to create new jobs and stimulate private enterprises. It has also improved the region’s average ease of doing business score by 2.9 points. (Source: World Bank Press Release on Ease of Doing Business in Qatar)
Besides taking these steps, other measures are also introduced to facilitate businesses in setting up operations during the last few decades.
Foreign companies investing in Qatar will contribute to economic development as in the past for sure. Business firms from different industries and economic sectors like to own a business firm in Qatar with their own set of policies, offering products and services to customers.
The government of Qatar has taken the difference between businesses into account and introduced registration facilities for different types of companies in Qatar.
Let us have a look at the company registration process and formation methods applicable to the different types of companies in Qatar.
Note: Business owners and investors abroad need to go through the different types of companies in Qatar that they can choose from and select the one that best serves their specific needs for starting their business in Qatar.
Let us quickly go through the different types of business companies that are allowed to operate in Qatar. The statutory body that approves the different forms of businesses for the commencement of operations is The Ministry of Business and Trade Regulation Qatar. The Qatari government authority for governing the starting of business makes up registration policies and the regulatory framework. Every company registered in Qatar needs to have its office in Qatar.
Types of Companies in Qatar
Types of company structures in Qatar
Limited Liability Company
A Limited Liability Company in Qatar remains the top preference for now among all the types of companies in Qatar under which a business can operate for foreign investors. Foreign companies and investors want to go with this particular type of company formation in Qatar.
The formation of a Limited Liability Company in Qatar needs to have at least two and no more than fifty individual partners. As the name suggests, opening a limited liability company means the liability of the partners does not exceed the amount of their capital or equity in the business.
However, it is not easy to transfer a limited liability company in Qatar. A Limited liability company Legal entities in Qatar need to have each of the partners sign the Memorandum and Articles of Association.
The trade name for registering as LLC Qatar needs to have the words in it “Limited Liability Company”. Minimum capital of Qatari Riyals 200,000 is required for incorporating a Limited Liability Company.
The company can designate the management and operations to one or more company managers if the partners do not want to do that.
Foreign investors mostly own Limited Liability Companies in Qatar when forming a business in Qatar. Qatari government provides the guidelines on the policies regarding the different types of companies in Qatar and how they would conduct their operations.
There are some limitations and LLCs in Qatar (Limited Liability Companies) cannot engage in banking, insurance, and financing industries or act as their agent or principal.
Certain entities with foreign ownership operate as non-government banks, small corporate infrastructure organizations, and investment businesses to work as a Limited Liability Company in Qatar.
These policies have led to the availability of certain benefits offered during the company registration to foreign business owners and investors. One of those advantages is the relatively small amount of Qatari Riyals 200,000 as minimum capital.
Limited Shares Partnership Company
A Limited Shares Partnership Company in Qatar has to have one or more joint partners. These are the types of companies in Qatar focused on the following two types of business owners.
1. Joint Partners
Joint Partners consist of one or more joint partners. They are liable for paying off the company liabilities.
2. Trustee Partners
Trustee Partners are four or more shareholding partners who have limited liability not exceeding their share capital in the company.
All partners of the limited shares partnership company in Qatar need to sign Memorandum and Articles of Association.
A “Limited Shares Partnership Company” has to add these words to its name.
Joint Partners form a Limited Shares Partnership Company in Qatar and this type of company in Qatar is governed in the same way as a Simple Partnership Company. However, the joint partners have to be Qatari citizens or permanent residents.
The minimum capital requirement for these types of companies in Qatar is Qatari Riyals 1,000,000 (million).
The total company capital is divided into equal parts. These shares are transferable but not divisible.
Business owners who want to operate this type of business organization in Qatar need to pay the amount in full into a corporate bank in Qatar for their Limited Shares Partnership Company’s incorporation in Qatar.
The Limited Shares Partnership Company maintains a General Assembly that has to have valid authentication of the joint and trustee shareholding partners in the company.
Simple Partnership Company
Simple Partnership Company is one of the types of companies in Qatar that investors and business owners incorporate. It involves two or more owners or partners personally or jointly held accountable for the company’s liabilities.
All partners for Simple Partnership Company in Qatar need to be Qatari nations with a Memorandum of Association (MoA).
The Simple Partnership Company is named after the partners or the single partner. The name ends with the words “And Partners”.
For obtaining a commercial name for a Simple Partnership Company in Qatar, you need to get in touch with The Ministry of Business and Trade Regulation Qatar.
Single Shareholder Company
Single Shareholder Company is the type of company in Qatar that’s the most affordable and relatively easy to form a business entity in Qatar.
Most of the regulations for a Single Shareholder Company in Qatar are similar to those of a Qatari LLC.
As the name suggests, it is a single individual owned company, and that one person is responsible for the company’s liabilities.
The liability towards a Qatari Single Shareholder Company is limited to the equity of the owner of the company.
The minimum capital for the company has to be QAR 50,000 for a Single Shareholder Company.
Joint Partnership Company
Joint Partnership Company remains one of the most important types of companies in Qatar. There are types of Qatar Joint Partnership Company. Let us have a look at these two types of Qatari Joint Partnership Companies.
1. Joint Partners
Joint partners will be held jointly and personally for their company’s liabilities and they mainly drive the formulation of organizational policies and regulatory affairs.
Qatari government requires all Joint Partners Company’s partners to be Qatari citizens or PR holders.
2. Trustee Partners
Trustee partners are the types of Joint Partnership companies in Qatar that contribute any amount towards the company.
Trustee Partners cannot be held responsible for the company’s liabilities beyond their equity. Trust Partners cannot take part in the management and day to day operations of the organization.
Joint Venture Company
Joint Venture Company in Qatar has somewhat different incorporation policies among the other types of companies in Qatar. Two or more individuals or corporate entities can form a joint venture company in Qatar.
A JV in Qatar may also be called an unincorporated business since there involves no registration process for the commercial registration and approval from The Ministry of Business and Trade Regulations.
A Joint Venture company does not have legal members responsible to pay for the company’s liabilities. Memorandums written for these companies are written on evidence, substance-related, and involving circumstances.
Partners use their unanimous voting power for getting resolutions passed and resolve company-related matters unless it is mentioned in the Memorandum.
A Joint Venture Company with non-Qatari partners can only conduct those business activities mentioned in The Memorandum and Articles of Association.
Corporations remain one of the most important types of companies getting registered in Qatar. A corporation in Qatar is formed as a closed or public stock company.
Closed Stock Qatari companies are allowed to have 100% shares owned by non-Qatari residents. However, for Public Stock Companies, foreign ownership cannot exceed 49%.
Public Shareholding Company
Public Shareholding Company in Qatar needs to have its total capital used by the company through division into equal value in shares. Company capital shares are also transferrable.
Shareholders do not need to pay for the company liabilities beyond their shares that they have owned. A Public Shareholding Company in Qatar needs to have at least five shareholders as per the regulations set by The Ministry of Business and Trade Regulation.
The company name needs to contain the words “Qatari Public Shareholding Company” in it.
Qatari Public Shareholding Companies need to have a term for the company that needs to be mentioned in both the Articles of Association and the Memorandum of Association and as per the format authorized by the Ministerial Decree in Qatar.
The term for the incorporation of a Public Shareholding Companies can be extended by passing a resolution in the General Assembly. The minimum capital requirement for a Public Shareholding Company in Qatar is Qatari Riyals 10 million.
Check our blog category on company formation in Qatar for more information.
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