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Home , Al Mansoura (Doha), Qatar, Qatar Insurance

Doing business in 2016

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1 Contents

Introduction ...... 3

– profile...... 4

Legal overview ...... 5

Conducting business in Qatar...... 10

Tax system ...... 12

Labour ...... 15

Audit ...... 18

Trade ...... 19

Finance ...... 21

Infrastructure ...... 22

This Guide has been prepared jointly by HSBC Bank Limited and Grant Thornton for the purposes of providing a high-level general overview of the business environment in Qatar for the information of businesses who may be interested in transacting or investing in Qatar. Any transaction or investment in Qatar, however, should only be undertaken based on professional advice specific to such transaction or investment. 2 Introduction This guide to doing business in Qatar will provide foreign investors with an insight into the key aspects of undertaking business and investing in the country. Qatar is a small independent with a growing population and is located in the surrounded by and the United Arab .

Qatar is one of the fastest growing provides an excellent business hub • Low corporate income at a economies in the . The for all types of financial services rate of 10 per cent country’s economy is primarily institutions and major multinationals. • Absence of foreign exchange based on the export of oil and Additionally, the successful bid controls and no restrictions on the . It is estimated that to host the 2022 World Cup has repatriation of funds Qatar’s may run resulted in major infrastructure • 100 per cent foreign ownership out by 2023 and therefore the investments; up to 12 new stadiums is available for companies in government has placed greater are currently being built as well as the Qatar Financial Centre emphasis on the production of new roads and other transportation and in the Qatar Science and natural gas. Qatar possesses the facilities. third largest natural gas reserves Technology park after and . The production Qatar has one of the lowest of (LNG) is While this guide makes reference to unemployment rates in the world largely responsible for the country’s some of the most common issues and one of the highest GDP per exceptional economic growth. investors might face, it must be capita. Investors wanting to do noted that certain industries, such business in Qatar would enjoy the However, Qatar has a diversification as the financial services sector, following advantages: plan to reduce its overreliance on are subject to special regulation natural resources. The government and therefore companies wishing • A fast growing population has invested in the diversification to invest in this should seek and modernisation of the services and limited restrictions on the legal advice. sector, particularly financial services recruitment of foreign employees and tourism. The Qatar Financial • No personal on the The information in this publication is Centre, established in 2005, salary of employees current at January 2016.

3 Country profile

Capital City

Area 11,586 sq.km

Population 2,423,175 (approx.)

Language

Currency (QAR)

International dialling code 1+974

National Holidays 2016 9 – National Sports Day 7 July – Eid Al Fitr (three days) 8 – Eid Al Adha (five days) 18 December – Qatar Independence Day

Business and Banking hours Business hours: 08:00 to 18:00 Banking hours: 08:30 to 13:00 and 17:00 to 19:00

Stock exchanges Qatar Exchange Index

Political structure Constitutional

Doing Business rank 2016 68

Ease of Doing Business

Topics 2016 rank 2015 rank Change in rank

Starting a business 109 103 -6

Licenses and Permits 8 8 No change

Getting Electricity 111 105 -6

Registering property 28 27 -1

Financing 133 128 -5

Protecting Investors 122 121 -1

Paying 1 1 No change

Trading Across Borders 119 122 3

Enforcing Contracts 112 111 -1

Resolving Insolvency 51 48 -3

Source: World Bank Group (Doing Business)

4 Legal overview Political and legal system hierarchical civil-law model. The Qatar has had a constitutional system is formed of: preliminary monarchy rule since June 2013 courts, appeal courts, a court by the His Highness Sheikh of Cassation and the Supreme Tamim Bin Hamad Al-Thani. Constitutional Court. Courts The emirate is hereditary. The normally determine civil and country’s constitution was ratified commercial matters applying Qatari by public referendum in 2003 law; however, when no legislation and became effective in 2005. is available for a particular matter, The current Emir is the Head of judges can apply law and State, the Minister of Defence and common commercial matters. Commander-in-Chief of the Armed Forces. The Constitution separates It must be noted that there is a Courts normally the powers of the state between parallel legal system for the Qatar the executive branch formed by the Financial Centre (QFC) which has its determine civil Emir and the Council of Ministers, own rules and regulations applicable the legislative branch formed by the to financial services companies and commercial Advisory Council and the judiciary. covering issues such as anti-money laundering, insolvency or contract The is the Head of law. Qatari still applies in the matters Government and Head of State. QFC except when it is specifically Abdullah bin Nasser bin Khalifa Al excluded. Moreover, there are applying Qatari Thani is the current prime minister matters not governed by QFC law, and was appointed in 2013. Ahmad such as criminal issues. law; however, bin Abdullah Al Mahmoud is a Qatari diplomat and politician, who Data protection when no has been serving as deputy prime Qatar does not have a specific minister and minister of state for legislation on data protection. legislation is cabinet affairs since September However, the QFC issued data 2011. Both the Prime Minister and protection regulations applicable to available for the Deputy Prime Minister are QFC entities which are similar to the appointed by the Emir. The Council European data protection regime. a particular of Ministers is also appointed by the Emir. The main legal instruments for data matter, judges protection in QFC are: The Advisory Council is formed can apply by 45 members, 15 appointed by • The QFC Data Protection the Emir and 30 elected by direct Regulations (Law No 6 of 2005) Sharia law secret ballot. The Council has the power to draft and approve laws; • The Accompanying QFC Data and common nevertheless, it is for the Emir to Protection Rules ratify them. commercial The Data Protection Regulations The Judicial Authority Law, issued regulate the processing of personal matters. in 2003 establishes that judges data which is any information are independent and shall not be relating to an identified or subject to removal from office identifiable natural person. The except in cases specified by the regulations do not apply to natural law. The independence of the persons in the course of their purely judiciary is inviolable and protected personal activities. Moreover, the by law against interference from QFC Authority (QFCA) can exempt other authorities. The court system data controllers from complying with is based on a centralised and the law in certain circumstances.

5 As stated above, the Data are overridden by the legitimate • The processing is carried out by Protection Regulations are very interests of the data owner certain non-profit organisations similar to the approach adopted by • The processing is necessary the EU Data Protection Directive Before processing any personal for the purposes of legal with the same principles applying. data, the data controller must obtain proceedings, obtaining legal For instance, personal data must consent from the data owner which advice, establishing or defending be processed fairly, lawfully and must be given ‘unambiguously’. legal rights, the administration of securely for specific and legitimate justice and/or exercising functions purposes. The data controller Data controllers are not allowed of a public nature must ensure that the personal to process personal data relating • The processing is carried out data is adequate, relevant and not to racial or ethnic origin, political by a health professional and is excessive for the purposes it is opinions, religious or philosophical necessary for medical purposes collected and processed. beliefs, -union membership and health or sex life, unless one of • The data relates to racial or ethnic The data controller can process the following circumstances applies: origin and is processed in the personal data in the following context of equal opportunity circumstances: • The data owner gives explicit monitoring consent to the detail of the • To ensure compliance with any processing, the type of data to Data owners must have a right legal obligation be processed, the purpose of to access their personal data and • To protect the vital interests of the the processing and any special to be informed of the purpose data owner aspects of the processing of the processing as well as of the recipients. If the processing • In relation to a contract to which • The processing is necessary of personal data infringes the the data owner is party to perform the controller’s Data Protection Regulations, the employment law obligations • To perform a task carried out individual has the right to have it in the interests of the QFC, its • The processing is necessary to rectified, erased or blocked. tribunals or its regulatory authority protect the life of the individual • For the purposes of legitimate where consent cannot be given or Data controllers must take all interests pursued by the data cannot reasonably be obtained appropriate steps to protect personal controller or a third party; this rule • The individual has made the data against accidental or unlawful is not applicable if their interests data public destruction or accidental loss,

6 alteration, unauthorised disclosure or This includes before establishing access and against unlawful forms a business relationship with a Qatar of processing. customer and when an occasional customer conducts a transaction recognises the It must be noted that there are in a single operation or several certain protections available for linked operations for an amount importance non-QFC entities such as the Qatar exceeding QAR55,000. Employees Central Bank Law or the Qatar Penal must receive training to ensure they of protecting Code, but these provisions are understand the vulnerabilities of the limited. Additionally, trade secrets services and products offered by the intellectual are protected by Law No 5 of 2005 financial institution. on the Protection of Secrets of property rights Trade. Foreign applicants enjoy the The Anti-money Laundering Law same protection as Qatari nationals established Anti-Money (IPR), which as long as their national law offers Laundering Committee and the them the same protection. Qatar Financial Information Unit. include patents, The Financial Intelligence Unit is in Exchange controls charge of the following: trademarks and At present, Qatar does not have any exchange controls or restrictions in • Reviewing all financial transaction service marks, the remittance of funds overseas. reports • Identifying suspicious transactions copyright Money laundering regulations Law No 4 of 2010 criminalises • Ensuring that members of the and industrial money laundering and imposes government and governmental prison sentences on individuals agencies have the appropriate involved in any money laundering tools to oversee suspicious designs. activities. Money laundering is transactions described by the Qatari law as the acquisition, holding, disposing of, Both the QFC and the Qatar managing, keeping, exchanging, Exchange have their own depositing, investing, transferring anti-money laundering regulations. or converting funds from illegal proceedings. Intellectual Property Rights Qatar recognises the importance All financial institutions are of protecting intellectual property obliged to report any suspicious rights (IPR), which include patents, transactions to the Qatar Central trademarks and service marks, Bank. Additionally, they must keep copyright and industrial designs. records of those transactions for up Since 2002, the country has made to 15 years. progress to enact legislation and is continually implementing practices Financial institutions must that enable rights holders to implement appropriate customer protect their intellectual property. due diligence (CDD) processes. Additionally, the country is now CDD measures must be applied part of various international IPR in a number of circumstances, treaties, including the WTO, which as prescribed by Law No 4 of is the umbrella to which most of Year 2010 on Combating Money the other treaties and conventions Laundering and . fall under.

7 COPYRIGHT

Copyright protects original literary and artistic works including computer programmes and databases which are creative in the selection and arrangement of their subject matter. Copyright provides protection for the following: books, pamphlets and other writings, plays and musicals, music, choreographic work, audio-visual work, photographs, applied art, drawings, paintings and computer programmes.

Protection In order to be protected, materials need to be registered with the Qatar Copyright Office. granted Additionally, the protection extends to non-Qataris whose work is first published in Qatar or is published in Qatar 30 days after being published in another country. Copyrights are protected by Law No 7 of 2002 on the Protection of Copyright and Neighbouring Rights.

Infringements In the case of infringement, the individual that reproduces, distributes, displays or performs the protected work, without explicit permission from the owner can be subject to a fine and/or a term of imprisonment.

Duration The length of protection is 50 years after the author’s death or after the date of publication for anonymous or collective works.

PATENTS

In Qatar patents are protected by Patent Law No 30 of 2006. Patents protect inventions which can be applied in an industrial environment. For a patent to be granted, the invention must be new, have an inventive step which is not obvious to someone with experience in the subject and capable of being used in some kind of industry. Patents are not granted to scientific theories or mathematical methods. Surgical or therapeutic methods cannot be patented either. The patent law states that the subject-matter of the patent should not contradict public morality, public order or national security.

Protection Patent owners in Qatar can obtain protection by filing for patents with the granted (GCC) Patent Office in , Saudi Arabia. Patents granted by the GCC Patent Office apply in all GCC states; however, the responsibility for the enforcement of the patent rests with the GCC member states.

Infringement The Patent law of Qatar gives the patent owner the right to exploit the patented invention by making, using, offering for sale, selling or importing the necessities of legitimate exploitation. No one can exploit the patented invention without the written permission of its owner.

Duration 20 years from the filing date.

8 TRADE MARKS

A trademark must be a sign capable of distinguishing goods and services of one undertaking from those of another undertaking. Those signs can be: names having a distinctive form, signatures, words, letters, numerals, designs, pictures, symbols, stamps, seals, vignettes, reliefs and any other sign or combination of signs.

Protection Protection is granted upon registration with the Trademarks Office. If the applicant is not domiciled granted in Qatar, the registration can be made through an agent registered in Qatar as long as the application is accompanied by a power of attorney. Registration of a mark shall confer upon its owner the right to prohibit third parties from using his mark or a sign resembling it in such a way as to be likely to mislead the public, for goods or services in respect of which the mark is registered or for similar goods and services. The person that registered the trademark is considered the absolute owner. The ownership of a mark cannot be contested if the person in whose name the mark is registered has made uninterrupted use of it for a period of five years after the date of registration.

Infringement The following actions constitute infringement of a trademark: • Any person counterfeiting a registered mark or imitating it in such a way as to mislead the public, as well as any person making fraudulent use of a counterfeit or imitated mark • Any person fraudulently affixing to his goods or using in connection with his goods or services a mark belonging to another person • Any person who knowingly sells or offers for sale or distributes, or holds for the purpose of sale, goods bearing a counterfeit, imitated or wrongfully affixed or used mark or who knowingly offers services under such mark

Duration 10 years (registration can be renewed for a further period of 10 years).

DESIGNS

An industrial design, the external appearance of a product embodied in three dimension configurations, lines, colours or a combination of the aforementioned elements, can be protected if it is new, of a creative nature and can be applied in industry.

Protection Registering a design gives the owner a property right over the design. Holding design rights granted provides the owner the exclusive right to use it and to prevent any third party from using it without consent. Industrial designs and models can be registered under the Trademark Law.

Infringement Design rights are infringed by an unauthorised person making an article exactly or substantially similar to the protected design or by making a design document for the purpose of making unauthorised copies.

Duration Once obtained, design rights are protected for a period of five years from the date of filing of the application.

9 Conducting business in Qatar Business entities unusual for foreign investors to own registration is obtained and the Foreign companies or individuals the majority of shares. Nevertheless, company has deposited the full wanting to do business in Qatar there are no restrictions on the capital in a bank account and need to operate under one of profit share attributed to the foreign then provided the Ministry with the forms provided by Qatari shareholding, which may be in confirmation from the receiving legislation. When selecting the excess of the legal shareholding. bank. After incorporation, a form of business, companies and certificate from the Qatar Chamber individuals need to take into account Formation of Commerce and Industry and a whether full foreign ownership The establishment of an LLC trade licence must be obtained. is authorised. It must be noted requires initial approval from the that certain forms of business Ministry responsible for the activities While the time to create an LLC require special authorisation. Most the LLC intends to carry out. The can vary substantially, particularly businesses operate as limited application must contain a copy of when it is necessary to find liability companies. the articles of association which the appropriate Qatari business must be translated into English partners, the Ministry is required to Limited Liability Company when one or more shareholders are respond to an application to register (LLC) non-Arabic speakers. a company within 15 days from the Limited liability companies are a application being presented. common form of business in Qatar. The Ministry is entitled to request They are regulated by Chapter 7 of changes in the name of the Capital requirement the Commercial Companies Law. company, the share capital and There are no stated minimum capital An LLC can carry out business in any other provision in the articles requirements but the Ministry most sectors apart from banking, of association. Naming restrictions expects shareholders to determine insurance and financial investment must be taken into account, a minimum amount of capital in line on behalf of others. A minimum especially considering that the with the activities of the company. of one shareholder is necessary Arabic name must be translated Additionally, every year, 10 per cent to form an LLC (the maximum into English. of the company’s net profits must number of shareholders is 50). The be kept in the legal reserve until the shareholders’ liabilities are limited The application must be latter reaches 50 per cent of the to the amount of their contribution. submitted with the final version share capital. It must be noted that the shares of of the articles of association and an LLC are not freely transferrable, documents to prove the identity Management they must be first offered to other of the shareholders. If the foreign The management structure of a shareholders by way of pre-emption. shareholder is another company, the limited liability company is flexible. Shareholders can formally waive following documents are necessary: The shareholders must designate their pre-emption rights, providing a general manager. It is possible to 75 per cent shareholder consent is • A commercial registration appoint a board of managers too. provided at an extraordinary general certificate Managers represent the company assembly and the Ministry of before the courts and third parties. • A copy of the articles of Economy and Commerce has given When the company has a board, the association or bylaws its approval. articles of association must explicitly • A certificate of good standing state how the powers are to be Additionally, there are some foreign • The resolution by the board or divided. investment restrictions: the Law shareholders to authorise the Regulating Non-Qatari Capital representative Branch Investment in Economic Activity A foreign entity can establish states that at least 51 per cent of All documents mentioned above a branch for the purposes of the share capital of an LLC must must be notarised together with completing a contract with the be owned by a Qatari citizen. While the application form before they government or a governmental certain exceptions to this rule can be are submitted to the Ministry or a quasi-governmental entity. granted by the Minister of Economy for registration. The company is The branch is limited to carrying and Commerce, in practice, it is incorporated once the commercial out the specific contract on which

10 its registration is based and the The Qatar Financial Centre the financial information about investors must apply for further Regulatory Authority (QFCRA) the firm approval to add or renew contracts. authorises and supervises Therefore, the branch only exists companies conducting business Depending on the information for the duration of the associated in the QFC, while the Qatar provided, the Companies contract and must be dissolved Financial Centre Authority (QFCA) once the contract expires. is responsible for the commercial Registration Office will establish the strategy. The following activities company as a LLC, LLP or a branch To register a branch, approval must are regulated: office. Applications are normally be obtained from the Minister of processed by the regulatory Economy and Commerce. There is • Deposit-taking activities authority within three months. no requirement for a Qatari citizen to • Providing or arranging credit have any interest in a branch. facilities or custody services The following activities are • Dealing, managing or advising Incorporation of an entity within non-regulated: the Qatar Financial Centre (QFC) on investments The Qatar Financial Centre was • Operating a collective • Ship broking established in 2005 in order to host investment fund • Professional services including regulated organisations operating in • Carrying out insurance activities audit, accounting, tax, consulting the financial services sector. Some of the advantages of operating in the Firms carrying out regulated and legal QFC are: activities need to comply with • Operation and administration of the following procedures for the companies • Full repatriation of profits and establishment of their business: capital is permitted Companies carrying out • QFC entities can operate • Complete an application for non-regulated activities need internationally and can be 100 per ‘Authorisation to Conduct cent foreign owned Regulated Activities’ to the to complete an application • Once the premises are approved QFCRA for ‘Authorisation to Conduct by the QFC, they could be based • Provide the following information: Non-Regulated Activities to anywhere within Qatar a description of the business and the QFCRA’.

11 Tax system Corporate Income Tax (CIT) Scope Companies resident in Qatar wholly owned by Qataris and citizens of the other Gulf Cooperation Council (GCC) are exempt from tax.

Qatar resident companies are taxed on the profits attributable to non-Qataris and non GCC-national shareholders. Foreign companies carrying on business in Qatar are subject to tax regardless of their corporate structure.

A company is considered to be resident in Qatar if:

• It is incorporated under Qatari law • The head office is in Qatar • Its place of effective management is in Qatar

Tax resident companies exempted from corporate income tax must submit tax returns and audited financial statements to the Public Revenues and Taxes department if their capital is QAR2 million or more and their annual revenue is QAR10 million or more. Taxpayers are allowed to deduct the expenses and cost that are from their taxable income such allowed to be deducted Taxable income reasonable and deductible business • Administrative charges imposed Taxable income is defined as the expenses as provided under law. by the parent company on its difference between total revenue They must be determined under the Qatari branch can be deducted as accrual method of accounting. In and deductible expenditures. long as they don’t exceed three general, a business expense will be Income will include: per cent of the turnover less deductible but the following must subcontract costs. This limit is be noted: • Interest and returns realised reduced to one per cent for banks outside Qatar from amounts • Expenses for entertainment, generated by taxable activities Tax rates hospitality, meals, holidays, club • Revenues from trading, The general rate is a 10 per cent subscriptions and clients gifts contracting and provision of flat rate. Oil and gas operations are subject to restrictions and are services subject to an allowable ceiling of are subject to a 35 per cent tax • Service fee income received two per cent of net income to a rate. activities include by head office, branches or maximum of QAR200,000 the following: companies • Self-employed individuals have • Exploration operations • Capital gains from real estate the possibility to deduct a notional located in Qatar expenses equal to 30 per cent of • Developing fields • Interest on loans located in Qatar their total income instead of all of • Drilling

12 • Completing and repairing wells A penalty of QAR100 per day is gains will therefore form a part of • Producing and processing imposed for late filing (subject a firm’s taxable income and will petroleum to a maximum of QAR36,000). be taxed at the standard corporate A penalty of 1.5 per cent of the income tax rate. The sale of • Filtering of impurities amount due is imposed for late shares from a Qatari company by • Storing, transporting, loading and payments (up to the amount of tax a non-resident is taxed at a rate of shipping due). 10 per cent. • Services necessary to achieve the above activities For the tax return to be accepted by Groups the PRTD, it must be certified by There are no provisions within Administration an accountant registered with the corporate tax law addressing the Companies need to register with Ministry of Economy and Finance. concept of group consolidation. the Public Revenues and Taxes Tax payers meeting the following Department (PRTD) and request a requirements need to submit Thin capitalisation rules At present, there are no thin tax card within 30 days after they financial statements with their tax capitalisation provisions in the Qatar start a taxable activity in Qatar. declaration: Income Tax Law. Nevertheless, in the QFC tax regime, the following The tax year is from the 1 January • The capital of the taxpayer debt-to-equity ratios apply: 2:1 for to 31 December. As a general rule, exceeds QAR100,000 non-financial institutions and 4:1 for tax payers need to comply with this • The taxpayer’s total taxable financial institutions. While these accounting period; however, it is income exceeds QAR100,000 ratios are not statutory, they are possible to request an alternative • The company head office is accepted as default thresholds by accounting period under special located outside Qatar the tax department. circumstances. The PRTD has the authority to Losses All companies, including those that review taxpayers’ books and Businesses that incur losses after are exempted from tax payments, records; in certain circumstances, tax finalisation are entitled to carry need to fill out a tax return within the PRTD can apply market prices forward those losses to be offset four months after the end of the to party-related transactions and against the assessable income of tax year. While extensions can apply presumptive tax assessments. future years. Tax losses are available be granted by the PRTD, they Tax payers can appeal against these to carry forward consecutively for rarely exceed four months. When procedures. a maximum of three years before companies receive an extension they expire. to file their tax return the date to Capital gains make the payments is normally Qatar does not operate a separate The carry-back of losses is not extended too. ‘capital gains tax’ regime. Capital permitted.

13 Dividend income applicable if the transaction had must withhold tax following the Dividends paid by companies taken place between unrelated requirements described in the exempted from tax are not subject parties. When the information to ‘withholding tax’ subsection and are to withholding tax. Similarly, apply this method is unavailable, obliged to present tax returns and income distributed from profits that the parties can apply for the audited financial statements. have already been taxed are not application of any other methods further taxed. approved by the Organisation Personal Income Tax (PIT) for Economic Co-operation and Qatar does not impose personal Withholding tax Development (OECD). income tax on individual’s salaries, Withholding tax is charged on the wages or allowances. Self-employed following types of income: In the QFC, transfer pricing can be individuals may be subject to determined by any of the accepted corporate income tax at a maximum OECD transfer pricing methods. • Royalties and technical fees: five rate of 10 per cent. per cent Controlled foreign companies • Interest payments (subject to Individuals are considered to be (CFC) exceptions), director’s fees, resident in Qatar if: There is no anti-controlled foreign attendance fees, commissions company legislation in Qatar. and other payments for contracts • They have a permanent home in for services conducted in Qatar: Qatar Tax incentives seven per cent Certain companies are granted a • They have their vital centre of tax exemption of between three interest in Qatar Tax withholding is applied to and six years independently of • They are present in Qatar for 183 payments to non-resident entities the nationality of their owners. days a year for activities not connected with Some of the factors considered a permanent establishment or to by the committee reviewing the Other taxes entities that are carrying a specific applications for exemptions are: project for a period of less than Value Added Tax There are currently no sales taxes or a year. Companies making these • Social and economic benefits VAT imposed in operations in Qatar. payments must deduct the tax at provided by the company to Qatar source and remit it to the PRTD Nevertheless, the introduction of • The extent to which the company by the 15th day of the month, a single GCC-wide VAT is being contributes to the national following the month in which the considered. The rates expected are economy payment is made. around three and five per cent. The • Employment opportunities tax will be charged on a wide range Transfer pricing created by the company in Qatar of goods and services. Related party transactions must • The use of modern technology be conducted at arm’s length and • Whether the company Customs duty must comply with the transfer provides social or economic Customs duties are sometimes pricing rules and documentation benefits to Qatar applied to goods from outside GCC requirements. When determining countries at a rate of five per cent. the arm’s length value, the PRTD Additionally, the income of Higher rates apply to products such requires the use of the comparable companies operating at the Qatar as iron bars, cements, records and uncontrolled price (CUP) method: Science and Technology Park musical instruments and tobacco. the price of the good or service (QSTP) are exempt from tax. Temporary imports exceptions may is deemed to be the price Nevertheless, these companies be available.

14 Labour The main regulation governing • Name of the employer employment relationships in Qatar • Work place is the Labour Law (Law 14 of • Name of the employee 2004). The following categories of employees are specifically • Qualifications exempted from the law: • Nationality • Profession and residence • Employees of Ministries and • Date when the contract was public institutions concluded • Armed forces and police • Duration of the contract • Workers at sea • Wages and payment method • Domestic workers • End-of-service benefits • Casual workers Employees • Working members of the Temporary contracts cannot be employer’s family longer than five years. The duration who work • Employees of of the contract can be extended as agreed by both parties. If the • Employees in the QFC which has overtime its own employment regulations employee continues to work for the same company, upon expiration are entitled The Labour Law contains mandatory of the employment contract, the provisions with respect to issues contract shall be considered as to additional such as annual leave, maximum renewed for the same duration and working hours, maternity leave or under the same conditions as the wages. end of service. Those mandatory expired contract. provisions must be applied The normal irrespective of any choice of law in Minimum wage the employment contract. The Labour Law gives the Emir the overtime rate authority to set the minimum wage Priority in employment is given to but no minimum wage has been must be at Qatari nationals. Qataris seeking set as of yet. Nevertheless salaries employment can register with must be paid in Qatari Riyals from least 25 per the Ministry of Labour and Social the employer’s local Qatari account Affairs. The government intends to into a Qatari bank account in the cent of the increase the proportion of Qataris in name of the employee. both the public and private sectors. standard rate. The government’s objective is to Working time and leave increase the proportion of Qataris in Under Qatari labour law, working the manufacturing sector by 50 per hours should not exceed eight cent by 2020, along with promoting hours per day or 48 hours per week. other sectors to Qatari nationals During the month of , other than the public sector. employees must not work more than 36 hours per week. Employees Employment contract are entitled to a minimum of one Employment contracts must be in day off per week, which is usually Arabic, or Arabic and English, and a Friday. the employee’s language. They must be approved and registered Working hours may be extended with the Ministry of Labour and through an agreement between Social Affairs. The following the employer and employee if the information should be included in a additional work is necessary for written employment contract: the prevention of gross loss to the

15 company. Employees who work post-delivery period not exceeding the employee performs their work overtime are entitled to additional 35 days. as usual. The same obligations wages. The normal overtime rate exist when the employer asks the must be at least 25 per cent of the Probation employee not to work for some of standard rate. Employers and employees may the notice period. The employer can agree on a probationary period. pay the employee in lieu of notice. Employees who have been This must not exceed six months. employed for 12 months are The probation period cannot be The Labour Law allows an employee provided with a minimum of three extended. During the probation to terminate the working relationship weeks of annual leave per year. For period the employee can be with immediate effect if: those that have been employed for terminated if it is proved that he is more than five years, the holiday incapable of executing the job (s) • His employer has breached the entitlement increases to four weeks. he was hired for. A three day notice terms of the employment contract The holiday entitlement may be must be given before termination. • The employer has physically divided into two periods if the assaulted the employee employee provides his/her consent. Termination of the employment • The employer has misled relationship The date when the annual leave is the employee to continue his Temporary contracts can be to be taken must be agreed with the employment although he is aware employer to accommodate the leave terminated by the employee without that continuing the employment to existing work commitments. providing a reason for termination. would put the employee in danger

Employees are entitled to sick leave; When the contract is permanent, The employer is entitled to terminate however, the employee must have it can be terminated by either the the employment contract with worked for the same employer for employee or the employer by immediate effect if: at least three months and provide giving written notice. While there a doctor’s certificate. Employers are various notice periods, as a • The employee has assumed a must pay full salary for up to two general rule, notice must be at least false identity or nationality or weeks of sick leave, half salary one month for employees who submitted false certificates or for the third and fourth week and have been employed by the same documents nothing thereafter. employer for less than five years • The employee has committed an and two months for employees that act which caused gross financial Female employees are entitled to have worked for the same employer loss to the employer 50 days paid maternity leave when for more than five years. they have worked for the same • The employee discloses employer for at least one year. The Upon termination, the employer confidential information maternity leave should be divided needs to pay the employee his • The employee is found drunk into two periods; one before and wages and any other benefits due or under the influence of drugs one after the delivery, with the to him for the notice period provided during working hours

16 • The employee is absent from At present, employees under work without a legitimate cause sponsorship from a certain employer for more than seven consecutive are not allowed to work for another days or 15 days in a year employer unless the current and prospective employers agree In addition to any wages or to the transfer. The transfer of benefits, employees may receive a employment requires approval by ‘gratuity’ if: the Interior Ministry. Changes to • The employment relationship is labour law, due to come into effect terminated either by the employer in December 2016 will allow foreign or the employee giving notice but workers to switch jobs at the end of no reasons a fixed-term contract. • If the employee terminates the employment relationship as a Law No. 4 of 2009 Regulating consequences of the actions of the Entry, Exit, Residence & his employer as stated above Sponsorship of Foreigners Employees (Sponsorship Law) states that Employees are not entitled to foreign individuals are not allowed to who work any gratuity if the employment leave the country unless they obtain relationship is terminated due to overtime an exit permit from their employer. their gross misconduct. Exit permits are valid for seven days are entitled The amount of the gratuity is to be from the date of issue. determined between the employer to additional and the employee, in any case it Changes to the Sponsorship Law should be equal or higher than three will come into force in December wages. weeks of the employee’s basic 2016. Rather than applying for an salary for every year of service. exit permit from their employer, The normal foreign individuals will be required Employment of foreign to inform the interior ministry overtime rate employees at least 72 hours before their Foreign nationals (with the exception planned departure; the ministry must be at of nationals from the GCC) wanting will then obtain the employer’s to do business in Qatar for a consent. The Ministry of Interior least 25 per limited period of time can obtain a business visa which is valid for has also set up a new grievance cent of the one month. Only those companies committee that expats can petition approved by the Qatari to if their sponsors refuse to approve standard rate. authorities can sponsor foreign their departure. nationals and apply for business visas. The application must be Employment visas are valid made from Qatar and the visa must from one to five years and are be presented upon arrival to the renewable. It must be noted that country. The visa can be renewed the non-working spouses do not for an additional two months on a automatically receive a visa; a monthly basis. separate application must be made. Foreign nationals wanting to work Trade unions in Qatar on a permanent basis need a valid employment contract Employees in Qatar can form sponsored by a company resident in Workers Committees and join trade Qatar. If the employment contract is unions. Strikes are permitted as long approved by the Ministry of Labour, as they follow the rules established the visa is granted. by the labour law.

17 Audit Accounting standards Qatar does not have local Generally Accepted Accounting Principles (GAAP) with most companies using International Financial Reporting Standards (IFRS). Companies operating in the Qatar Financial Center prepare their accounts in accordance with IFRS, UK GAAP or any standards published by the Accounting and Auditing organisation for Islamic Financial Institutions.

Companies can either use American dollars or Qatari Riyals as their reporting currency.

Accounting records The Tax law states that accounting books must be maintained at all companies; nevertheless, businesses can apply for an exemption from the Public Revenues and Taxes department. Books can be maintained in Arabic or in English. The currency in the books could either be Qatari Riyals or American Dollars.

Listed companies’ accounts are publicly available. • Their annual taxable income exceeds QAR100,000 Companies Filing and submission of • It is a branch with the head office statutory financial statements situated outside Qatar can either Limited liability companies must send copies of their financial Those financial statements must be use American statements to the Ministry of Trade submitted to the Public Revenues and Business within a month of and Taxes Department with the dollars or their preparation. company’s tax declaration. Qatari Riyals as Audit requirements Limited liability companies need As explained in the Corporate to have their financial statements their reporting Income Tax section, companies in audited. Financial Statements must Qatar need to have their financial be prepared within four months of currency. statements audited and must the financial year end. submit them to the Public Revenues and Taxes Department if: While there are no restrictions on the appointment of auditors • The profits or the capital of for non-listed companies, listed the taxable company exceeds companies must change their QAR100,000 auditors every five years.

18 Trade Foreign Direct Investment Qatar has a relatively open foreign investment policy. While profits can be repatriated without restrictions, according to the Investment of Foreign Capital in Economic Activities Law to do business in Qatar it is necessary to establish a company with a Qatari partner. As a general rule, 51 per cent of the company must be owned by the Qatari party. Nevertheless, as stated in the ‘Conducting business in Qatar’ section, profit distribution does not need to reflect shareholdings; this means that foreign investors may be able to receive a greater share of the profits available for distribution. capital is protected against expropriation. Nevertheless, it There are no In exceptional circumstances, is possible for the government foreign investors are authorised to to acquire privately-owned restrictions on own 100 per cent of the company assets for public benefit on a by the Ministry of Business and non-discriminatory basis as long profit transfer Trade as long as the company as it provides fair and timely operates in the following ‘priority compensation. or capital sectors’: Certain financial sectors such as repatriation, • Education banking and insurance require • Tourism specific approval from the Financial import duties • Health Markets Authority and the are low (less • Agriculture Central Bank. • Industry Real estate than four per • Energy and mining It is possible for non-Qataris to own • Exploitation of natural resources real estate in the following areas: cent for virtually • Information technology Resort, Lagoon, and the Pearl. Additionally, it all goods) and • Cultural services, sports and entertainment is possible for foreign investors to own property on a 99 year leasehold non-existent Total foreign ownership is permitted in the following areas: Musheirib, in the case of in the ‘Free Zones’: The Qatar Freej Abdul Aziz, Doha Jadeed, Financial Centre (QFC) and the Ghanim Al-Atiq, Al-Riffa, Al-Hitmi items imported Qatar Science and Technology Park Al-Atiq, Salata, Bi Mahmood, (QSTP). The former hosts mainly Rawdat Al-Khail, Al-Mansoura, Bin for use in the professional and financial services Dirhem, , Umm Ghwailina, companies while the latter is Al-Khulaifat, Al-Sadd, Al-Mirqab dedicated to technology and start-up Jadeed, Al-Nasr, Al-Qisar, Al-Dafna, free zones. firms. , Lusail, Al-Khiraij, Jabl Thuailab and the area around Doha Qatar recognises the importance . It is possible of foreign investment, and foreign to sell the lease. All leases must be

19 19 registered; landlords have to pay one to approval from the government Further exemptions apply to the per cent on the annual lease value. • Free foreign ownership in the categories following goods: Free Zones While individuals are not normally • Limited restrictions in the • Food products such as grains, allowed to remain in the country recruitment of foreign employees livestock, tea, coffee, sugar, without a sponsorship from their rice, milk for infants and other • Duty-free imports of the employer, individuals owning a essential food property in the areas of Al Khor equipment necessary for projects in Qatar • Goods imported by embassies Resort, , Lusail and consulates and the Pearl can request a • Duty-free imports of raw and sponsorship from the Ministry of the half manufactured materials not • Household appliances and Interior and remain in the country available in Qatar and necessary furniture owned by foreign even if they no longer work. for industrial projects national moving to Qatar for work reasons Companies cannot obtain a Imports commercial license without a lease In Qatar imports are regulated by Importers must register with the the Qatar Customs Law No 5 of of a commercial property. Importers Register and secure the 1988. The standard customs duty is approval of the Qatar Chamber of five per cent calculated ad valorem. Government incentives Commerce and Industry. The government of Qatar currently However, higher customs duties are applied to steel (20 per cent) and offers the following incentives for Import restrictions tobacco (100 per cent). foreign investors: The importation of products Goods manufactured in GCC is prohibited. The importation of • Low corporate income tax at a countries are exempt from customs alcoholic beverages is restricted rate of 10 per cent duty if importers are able to present under Qatari law. Imports from • No income tax on the salary of the certificate of origin issued by are not permitted. the Chamber of Commerce of their • Tax holidays for five years subject home country.

20 Finance Capital markets The Government of Qatar issued industry has a forecast compound The Qatar Stock Exchange is the a new central bank Law No 13 annual growth rate of 6.7 per principal stock exchange in Qatar. of 2012 (QCB Law) which came cent through 2017. Property and The primary aim of the Qatar Stock into force in 2013. A new financial insurance represent Exchange is to support Qatar’s regulation framework was enacted around 70 per cent of Qatar’s non-life economy by giving investors a by the unification of the regulatory premiums. Additionally, according platform through which they can regime; QFCRA and QFMA, all three to Lloyd’s of London, compulsory trade fairly and efficiently. The regulatory bodies, now function third-party motor insurance Exchange is part of a comprehensive under one umbrella. represents a large percentage of the national strategy that aims to non-life insurance market. Moreover, The banking sector in Qatar is establish Qatar as a world-class the introduction of Qatar’s health characterised by strong balance international market and reinforce insurance scheme in 2013 presented sheets, high capital ratios and the country’s position as a regional great opportunities for private liquidity. In general, Qatari banks are financial centre by introducing new healthcare insurance companies profitable and well capitalised. The trading products, technology and and brokers. exit of European banks from the international investors and issuers MENA region in order to strengthen to Doha. Local insurers rely heavily on their capital positions has provided foreign reinsurers for the provision great opportunities for internal It is regulated by the Qatar Financial of reinsurance services. As far acquisitions. The assets held by as distribution is concerned, Markets Authority (QFMA) which the Qatari banking system reached bank assurance is mainly used was established in 2005 as an QAR1 trillion in 2014 which is a sign for personal insurance while independent regulatory authority for of healthy growth. Banking assets brokers are largely used for Qatar’s capital markets. Its primary grew at 10.4 per cent in 2014. The commercial purposes. role is to regulate and supervise high levels of the stock exchange and securities are one of the main causes of Investment management industry in Qatar and implement the positive performance of the industry a new regulatory framework banking sector. There is a large amount of wealth for Qatar’s capital markets and in the Gulf region, including securities industry based on There is a large selection of Qatar, and this is a ready source international best practice. international banks in Qatar as well as of demand for asset managers. a number of local banks holding the Institutional wealth is also growing There are currently more than role of Islamic institutions. with sovereign wealth funds (SWFs), 40 listed companies on the Qatar insurers and funds also Stock Exchange. While foreign employees are permitted to open bank accounts, spurring growth in the asset management industry. Banking system they normally need a letter from their The Qatari banking sector is employer to do so. Investment management and regulated by the ; advisory firms in the Qatar Financial its main objectives are: Insurance industry The Qatari insurance industry is Centre have been subject to new prudential rules since 1 January • The stability of the Riyal small compared to other countries 2015. The revisions, contained exchange rate in the Gulf region which provides great opportunities for prospective in the Investment Management • The stability of commodities and investors. Despite the low and Advisory Rules 2014 (INMA), services prices penetration rate, Qatar is the fastest support the QFC Regulatory • Financial and banking stability growing GCC insurance market. Authority’s commitment to Insurance companies will benefit the continued development of The Qatar Central Bank is authorised from the multiple construction the QFC as a leading financial and to issue national currency and acts as projects in the next decade which business centre in the GCC and soon a bank for the government and the have an estimated value of USD200 to be in par with the UAE’s banker to the banks. billion. Overall, Qatar’s insurance International Financial Centre (DIFC).

21 Infrastructure Qatar has experienced rapid economic growth that has to be accompanied by the development of transport and infrastructure projects. The Public Works Authority is developing a transportation system in line with the Qatar National Vision QNV2030 and the Qatar National Development Strategy.

There are three key drivers for the Qatar’s National Vision 2030, which are:

• Facilitating events such as the 2022 FIFA World Cup • Transforming the capital, Doha, into a trade and transportation hub between , and Europe • Complying with existing regulations on safety, health and the environment

Qatar’s main city, Doha, has recently undergone a huge expansion of its transportation network which includes: a new airport, new metro and new highways. Road are the main transport method in Qatar. There are five highways connecting Doha with surrounding cities:

• The highway (west of While most people prefer to use Qatar does not currently have the city) their own car, there is a bus system a railway system, but the Qatar operated by a state-owned company Integrated Railway Project has • The Al-Shamal Road connects which covers most of the city. begun construction and covers four Doha to the north of the country metro lines in Doha, tram routes in • The Al-Khor Expressway connects Doha International Airport is West Bay and Lusail, a high speed Doha to Al-Khor the country’s only international line and dedicated freight railways. • The Wakrah Road connects Doha airport. The airport’s facilities to the south of the country have expanded significantly in Additionally, the is a recent years due the country’s railway project that will connect six • Salwa Road connects Doha to the growing demands; nevertheless, Arab member states of the GCC Saudi border the expansion did not solve the (, , , Qatar, problem. A new airport has been Saudi Arabia and United Arab Al-Shamal road is undergoing built, Hamad International Airport. Emirates). The network is expected significant expansion; it is being The airport will host around 50 to be 1,940 kilometres long and will transformed into a four-lane million passengers per year. It is the be completed by 2019. highway. Additionally, the Doha hub of , which is the Expressway will connect Doha state owned national carrier that with the projected Qatar-Bahrain connects Qatar to 140 destinations Friendship Bridge at al-Zubara. around the world.

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