Qatar

The legal system of Qatar is based on Muslim law. Sharia is the main and fundamental source of legislation.

Many branches of legislation, however, are of quiet secular nature and follow principles of civil law.

Legislation of Qatar (Article 4, Commercial Companies Law) provides for the establishment of the following legal forms of local companies:

• General partnership;
• Limited partnership;
• Joint venture company / Particular Partnership;
• Joint stock company / Shareholding company;
• Equities partnership;
• Limited liability company;
• Sole proprietorship;
• Holding company.

A Limited liability company (LLC) must have between 2 and 50 shareholders, each of whom is liable only to the extent of his / her share in the capital of the company.

The most common structure among foreigners is Limited Liability Company (LLC).

Types of activities in which 100% foreign participation is possible:

• Energy;
• Tourism;
• Information technology;
• Information technology consulting services;
• Industry;
• Natural resource development and exploration;
• Education;
• Agriculture;
• Distribution;
• Health care;
• Sports, recreational and cultural services.

A local LLC company is not allowed to conduct banking or insurance activities, real estate agency activities, as well as investment fund activities or activities related to the investment of funds of third parties in its own name or as an agent - such activities are available only for companies with 100% participation of Qatari citizens.

Local companies are prohibited from doing business with Israel or Israeli businesses.

In addition, certain activities require additional authorisations from the relevant regulatory authorities (e.g. engineering services, as well as tourism services).

Industrial activities require a licence from the Ministry of Energy and Industry to establishment of an industrial project.

Registration of a new company in the register takes at least 2-3 weeks, and this period may be extended due to the necessity to obtain additional permissions to conduct proposed activity.

A limited liability company must have a name derived from its objective or from the name of one or more of its founders.

The name should not be misleading as to the company's activities or the identity of the founders.

Also:

• must not be identical or similar to the name of an already existing company;
• must contain an indication of the legal form of organisation (Limited Liability Company or abbreviation LLC);
• must contain an indication of the purposes / activities of the company, or be derived from the name of one or more partners.

Registration of companies is handled by the Ministry of Commerce and Industry.

1. First of all, it is necessary to determine:

• company name to check for uniqueness (at least 3 variants);
• company structure (shareholders, manager);
• activities.

Some types of activities require special authorisations from various governmental bodies (federal and local).

2. Pay for the services.

3. It is necessary to submit documents on managers / shareholders / participants / attorneys (in originals or notarised copies):

• internal and foreign passports;
• document confirming residence address;
• CV (CV).

Shareholders should additionally provide:

• curriculum vitae in the form of a letter (phone number, e-mail address, address of residence, country of residence, mother's name, marital status, religion, citizenship).

4. Reserve the LLC name.

In order to reserve the name, it is necessary to apply to the Commercial Registration and Licenses Department and Intellectual Property Rights Protection Department under the Ministry of Commerce and Industry of Qatar. There the availability of the name is checked and it is reserved.

Reservation takes 1-2 days.

5. Open a temporary bank account with any accredited Qatari bank in Doha.

It is important to obtain a letter from the Ministry of Commerce and Industry authorising the opening of a bank account in Qatar and providing a copy of the shareholder's ID card.

The account will be activated as soon as an amount corresponding to the authorised share capital is deposited. the amount corresponding to the authorised capital of the company. Activation of the bank account takes 1-2 days.

6. Obtain additional authorisations from the competent relevant regulatory authorities (for certain activities).

7. Approve the draft Articles of Association at the Authentication Department of the Ministry of Justice, as well as at the Companies Affairs Department of the Ministry of Commerce and Industry.

After that, the signatures of authorised persons on the documents shall be certified by a notary of the Ministry of Justice. The procedure takes place in the presence of of the shareholders of the company who sign the Articles of Association.

8. Register with the Commercial Directory and Qatar Chamber of Commerce and Industry.

The application signed by the local shareholder must be accompanied by the Articles of Association of the company, as well as documents, confirming the distribution of shares and their payment, confirmation that the Articles of Association have been approved by the Ministry of Commerce and Industry.

A certificate of incorporation is not issued, but you can Company Registration (CR) (Extract).

9. Obtain a trade licence from the Ministry of Commerce and Industry.

In order to obtain a licence, a company needs proof of real presence in the country (rent of office or other premises).

9. Obtain a TIN from the Ministry of Finance.

Companies must have a registered office in Qatar. Copies of corporate documents of the company, and some other documents must be stored at the address of that registered office.

Legislation of Qatar does not have requirements regarding the existence, form and content of the seal.

Redomiciliation of companies from or to Qatar is not possible now.

Manager (director) of a company has all management powers, unless founding documents of the company determine their powers.

There are no statutory requirements for the citizenship and residency of the manager.

Managers may be selected from among the shareholders.

If a company has several managers, its founding documents may provide for the formation of a Board of directors and determine its proceedings.

Manager’s liability is analogous to that of members of the Board of directors of joint-stock companies.

A Limited liability company is a company consisting of two or more shareholders. At the same time, their number shall not exceed 50 persons.

A shareholder is liable only within the limits of his share in the Authorised Capital.

A foreign citizen may own only up to 49% of the company's shares, 51% must be owned by a citizen of Qatar.

The foreign ownership can be increased up to 100 per cent with the prior approval of the Minister of Commerce and Industry, according to the Law no. (1) of 2019 On Regulating Non-Qatari Capital Investment in the Economic Activity. This procedure takes 2-3 weeks from the time of application and only after approval can the company registration proceed.

A company must keep in its head office a register of shareholders that must contain

• full name, nationality, place of residence and occupation of partners;
• number and value of shares held by each partner;
• dispositions connected with shares stating dates, reasons for transfer of ownership right, full name of the transferor and transferee and their signatures;
• total number of shares held by the shareholder after the transfer.

Managers of the company shall bear joint liability for this register and correctness of information contained therein.

Shareholders and all concerned persons have the right to view the register.

In April 2021, the Ministry of Commerce and Industry announced the enactment of legislation related to the Unified Economic Register and the necessity to disclose information on the ultimate beneficial owner (UBO) of a legal entity. The Ministry declared that now applicants who file an incorporation or renewal request are required to provide information on the beneficiaries of the relevant legal entity.

Companies must keep a register of their beneficiaries, regularly update all their data and inform the respective department of the Ministry of any changes in such data.

Beneficiary is identified based on the founding documents of the legal entity or agreements made in respect of that entity.

Beneficiary is defined as:

• an individual or individuals who directly or indirectly own or control at least 20% of the Authorized Capital of the legal entity or voting rights therein;
• an individual who directly or indirectly exercises legal or actual powers of supervision or control over the executive bodies or general meeting of the legal entity or activity of such entity; or
• an individual who in accordance with the current legislation has the powers of a legal representative to act on behalf of the legal entity.

A register that must be kept by every entity includes the following information:

• full name of each beneficiary stated in their official identification documents (i.e. Qatari identity card or passport);
• date and place of birth; nationality;
• address stated in official documents;
• expiry date of the identity card or passport;
• date when they became a beneficiary; and
• shareholding percentage.

All forms of incorporation of legal entities must disclose information on their beneficiaries. The exceptions are:

• a public company registered in an exchange, or any of its subsidiaries in which the registered company holds a controlling stake;
• a company owned by the state or a state institution;
• foreign branches; and
• a joint venture.

The Ministry may impose sanctions on those who violate the set rules:

• oblige the offending company to provide regular reports on measures taken to remedy the situation;
• order the offending company to follow certain instructions;
• suspend managers, members of the board of directors, secretaries of the legal entity, executive officers or administrators for a period not exceeding 1 year;
• suspend activity of the offending company for a period not exceeding 1 year; or
• revoke commercial registration of the offending company.

There is no minimum Authorised Capital requirement to register a Limited liability company in Qatar.

The amount of the Authorised Capital must be deposited with one of the approved local banks, after which the company can complete the incorporation procedure.