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What To Consider When Purchasing an Existing Company in Qatar

While many expats come to Qatar with the intention of starting their own business, there is an alternative option available: to purchase a company that already exists. But is this right for you? Whether you choose to start a business in Qatar or buy a going concern will really depend on what you want to get out of the process – and what you are willing to put in.

As we have already written posts covering all the essential info you need to know about starting a business in Qatar, in this post we’ll focus on the more salient points regarding purchasing a business that is already in operation. With this info at hand, you can weigh up your options to work out which one will likely work best for you.

Purchasing an LLC vs. Setting up an LLC

Expats looking to buy a going concern in Qatar most commonly choose an LLC. Why? Those who choose to set up their own business here typically opt for an LLC as a company structure, so it’s not unsurprising that expats opting to buy rather than establish their own company also tend to choose the LLC structure.

When setting up an LLC, there are plenty of rules to abide by. You have to have a viable business plan, which includes a study of the market conditions, the competition and your forecast results. You will also need to have the necessary funds to invest, and in most cases, you must have a local partner. This local partner will own 51% of the company, so of course, it’s important to choose a partner that you trust.

In terms of risk, it goes without saying there is risk involved when starting any business. However, if you are new to Qatar, you may find that risk is greater than if you were to start a business at home, simply because the business landscape and its customs are unfamiliar to you. If you start a business in Qatar, having a better understanding of the way things work – or having a local partner that is willing to provide help in this regard – can make the difference between success and failure.

So, why buy a business rather than set one up? Buying a business that already exists is a more straightforward process. There is no need to lodge capital, acquire sponsorship or obtain registration. All that has already been taken care of. As the business is already established, you will also be in a better position to assess whether it is succeeding. As long as all looks good with the proposition, all you need to do is agree on a price and transfer the ownership of the business.

Factors to Consider When Purchasing an LLC

But, is it really that simple? While there are certain advantages to buying an established business over building one from the ground up, you should take time to consider the following factors before signing on the dotted line.

  • Viability: Just as you would complete research to ensure the viability of a new business, you should do the same for the business you are looking to buy. While it may look like a successful venture from the outside, there may be a reason the owner is looking to sell. Thoroughly investigate all aspects of the business to ensure it looks as good on the inside as it does on the outside, and that it will continue to prosper under your new ownership.
  • Liabilities: When you buy a business, you buy both the good and the bad. Make sure you understand any outstanding liabilities the business has before you buy, because as the new owner, they will become your liabilities.
  • Partner: In most cases, buying an LLC means buying into an existing partnership. With a local partner already on board, it’s important to assess what this partner has to offer before committing yourself to the relationship. Does the partner provide everything you need as a new business owner in Qatar? If not, will the existing partner be willing to sell their shares to a partner that does?

Whether you choose to buy an existing business in Qatar or build a new business, as your local partner, Fusion will be by your side every step of the way. To learn more about what Fusion can offer you as you start your journey in Qatar, read this blog post or contact us today.