Legal Business Structures in Qatar
The law stipulates a total local equity of not less than 51% in any commercial company and defines seven categories of business organization, which can be established in Qatar. It sets out the requirements in terms of shareholders, directors, minimum capital levels and incorporation procedures.
Categories of business organization defined by the Law are:
- General partnership company
- Sole Proprietor
- Single Owner Limited Company (Qatari)
- Joint venture company
- Public shareholding company
- Private shareholding company
- With Limited liability company (WLL)
- Share partnership company
Out of these nine activities, WLLs are more commonly used by the foreign investors.
Local Joint Venture Company This is the famous 51 / 49 % arrangement where the local (Qatari) partner must hold a minimum of 51% of the shares in the business. The foreign partner frequently runs the business while the local partner contributes with administration and support in the market and the majlis.
Branch of a Foreign Company A foreign company may, by issue of Ministerial Decree (through the Ministry of Finance, Economy and Trade), establish a branch in Qatar to invest monies for economic development purposes, to facilitate the performance of a public service or to achieve a public utility in selected fields’ industrial, agricultural, tourism etc. Branches are usually only put in place for a specific project and are wound-up at the end of that project.
Joint Liability Company A Joint Liability Company is one consisting of two or more partners whereby the partners are personally and jointly responsible for the company’s obligations.
Partnership in Commendams A Partnership in Commendams is a company consisting of two types on partners: Simple partners who are empowered to administer the affairs of the company and are jointly and personally responsible for the company’s obligations. Commandite (sleeping) partners merely contribute to the company’s capital without being responsible for its obligations except to the value of their shares in the capital.
Limited Partnership in Shares A Limited Partnership in Shares is a company consisting of one or more simple partners (personally responsible for the company’s obligations) and at least ten shareholding partners.
Limited Liability Company A Limited Liability Company can be formed by a minimum of two and a maximum of 50 persons whose liability is limited to their shares in the Company’s capital. Most Companies with expatriate partners have opted for this Limited Liability Company, due to the fact that this is the only option which will give maximum legal ownership. Fifty-one per cent participation by Qatari nationals is the general requirement for the Limited Liability Companies. Therefore, the normal shareholding pattern for an LLC will be: Local partner – 51% and a Foreign Shareholder (s) – 49% The minimum capital requirement is 200,000 QR (approximately US$ 54,800), contributed in cash. While foreign equity in the Company may not exceed 49%, profit and loss distribution can be mutually agreed. Responsibility for the management of a Limited Liability Company can be vested in the foreign or national partners or a third party.
Shareholding Company A shareholding company consists of an unlimited number of shareholders and must be registered with a name derived from its objectives. Legalize the memorandum of contract in the Ministry of Justice.
Education Institution Must have approval from the Ministry of Education
Health Care Must have approval from the Ministry of Health
Tourism Companies Must have approval from Qatar Tourism Authority
Law Office Companies Must have approval from the Ministry of Justice
Engineering Consultancy Office Must have approval from the Ministry of Municipal Affairs & Agriculture