Operating within a free zone can offer several benefits to businesses looking to expand within Qatar and the Middle East.
WHAT’S BEST FOR YOUR COMPANY?
Every business person or entrepreneur will know that starting a business – whether at home or overseas – means taking on a certain amount of risk.
To enhance your chances of success, you have to minimise this risk wherever possible. Apart from needing a full understanding of your business, your clientele and the nuances of your surroundings, you also need to conduct research and planning and take into account all applicable laws and procedures.
All of these steps can obviously be much more difficult to follow when setting up a business in an overseas country. This is why a local partner – a professional organization you can rely on for guidance and support – is invaluable if not essential.
If you’re thinking about establishing a company in Qatar, Fusion Middle East is that partner. In fact, we are the local partner of choice for more than 80 companies.
We will provide you with local knowledge and insight and assist you to make sure your business adheres to Qatari policies and procedures, while you retain full control of your day-to-day operations.
The first step toward starting your business in Qatar is to select the best company type for your business needs.
Limited Liability Company
If you want to set up your company in Qatar indefinitely, or you wish to sell your products or services to both private and government-related organisations, then a Limited Liability Company (LLC) type might be the best fit for you.
There are many key advantages to setting up an LLC. Unlike a Branch Office or Trade Representative Office, an LLC can carry out and fulfil an unlimited number of contracts simultaneously.
Top 3 Advantages of a Limited Liability Company (LLC)
- No limitation on the amount of products or services the company can sell.
- Your company will be recognised as a local company, often permitting the entity to take part in an increased number of government and private tenders.
- The company will not be subject to withholding tax.
The process for setting up an LLC in Qatar is as follows:
If you are a manufacturing company looking to penetrate the Qatari market, you may want to set up a Trade Representative Office. This type of representation is useful in introducing your products to Qatari companies as a non-trading ‘shop-window’.
However you will need to bear in mind that your Trade Representative Office cannot export, import or sell goods or products in the State of Qatar.
Personnel from your Trade Representative office may contact a client or exporter to acquaint them with their foreign establishment, but they are not permitted to contact the end customer directly, nor to promote products that are not manufactured by your company.
Main Advantages of Operating as a Trade Representative Office include:
- Can maintain 100% foreign ownership
- There are no share capital requirements for a Trade Representative Office
Further Considerations of a Trade Representative Office:
- Trade Representative Office cannot export, import or sell in the State of Qatar
- Requires Ministerial Approval based on the manufacturing license of the mother country
While in many cases a local partner is necessary to conduct business in the Middle East, it is not always mandatory.
Certain company establishment types allow for a foreign business to maintain 100% ownership, including the ‘Branch Office’.
For example, if you are a foreign company executing a specific contract in Qatar, you may want to choose to establish a Branch Office. The contract, however, must “facilitate the performance of a public service or utility”.
This means that your contract must be issued by a government or quasi-government entity.
Main Advantages of Operating as a Branch Office:
- Maintain 100% Foreign Ownership
- There are no share capital requirements
Key Considerations of a Branch Office:
- It is entitled to perform only the specific contract for which it is registered and cannot tender for any further public or private contracts through the entity.
- Branch Offices are fully taxable unless granted a special exemption.
- Although there is no need for a Qatari partner in a Branch Office set up, Fusion Middle East can help you through the company establishment process.
ENGINEERING COMPANY ESTABLISHMENT OPTIONS
Setting up a company in Qatar where the primary purpose is any engineering-related business requires special consideration.
This is because the process of fulfilling the necessary requirements to establish an Engineering Company office within the State of Qatar are often intricate.
Fusion Middle East is fully equipped to provide assistance, with the support of Premier Solutions.
A sister company to Fusion Middle East, Premier Solutions – a 100% Qatari owned company – specialises in overcoming bureaucratic obstacles, working specifically with Engineering Companies to help them establish and run their business operations successfully in Qatar.
The team at Premier Solutions have more than 50 years combined experience and have successfully established over 30 engineering companies in Qatar.
Unlike some other business sectors, engineering companies are required to obtain additional approvals to ensure that their businesses are compliant with all local requirements.
All professional consultants practicing within the State also need to be licensed under the Qatari Engineering Law, created in 2005. This law details strict and specific requirements for foreign entities wishing to practice and establish a presence in Qatar.
1-International Engineering Consultancy Office (100% Foreign Owned)
An International Engineering Consultancy:
- Must be a branch of a main office located abroad.
- Must have a license to practice the relevant profession.
- The main foreign office must dedicate time and resources to support the branch office and ultimately take responsibility for all their obligations.
2-Local Engineering Office
If you are interested in registering a ‘Local Engineering Company’, you can do so by using the services of our sister company, Premier Solutions. Dedicated to Engineering Companies, Premier Solutions meets all of the stringent requirements applicable to those needed by your local partner / Qatari shareholder.
Please note that all engineers working for a Local Engineering Office must be listed on the Register of Engineers and meet all of the necessary experience requirements.
3-Engineering Branch Office (Contract Specific)
A foreign engineering company performing a specific government contract in Qatar, may set up a Branch Office, without the need for a Qatari partner. The contract, however, must “facilitate the performance of a public service or utility”.
Also, the branch office must be:
- Entitled to perform the specific contract for which it is registered.
- Authorised by the Ministry of Economy and Commerce.
- Fully taxed, unless granted a special exemption.
QATAR FREE ZONES
With Qatar Increasingly becoming one of the most lucrative places to establish a company globally, more and more savvy business owners are bringing attractive foreign investments into the State.
In many parts of Qatar, to operate locally, incorporation will require you to have a local Qatari partner who will hold 51% of the company shares. However, in recent years, Qatar has been developing Free Zones to further attract foreign direct investment in strategically important fields.
To that end, the Qatar Free Zones Authority (QFZA) was created as an independent authority in 2018 to oversee and regulate world-class free zones in Qatar, offering outstanding opportunities and benefits for businesses seeking to expand globally.
Given its proximity to Hamad Airport, the Middle East’s “Best Airport of the Year”, industries based in Ras Bufontas Free Zone can benefit from unrivaled access to reliable air transportation services.
In addition to industrial infrastructure, Ras Bufontas has also been seamlessly integrated with urban elements to make the zone an enjoyable living environment. Residents of the free zones will have access to housing accommodation, retail stores, parks, mosques, health clinics, and more. For ease of transportation, there is a metro system, bus routes, and plenty of walking and cycling paths. Furthermore, the capital city of Doha is located only 20-minute away by car from the zone, providing access to a variety of exciting things to see and do.
QATAR FINANCIAL CENTRE: QFC
Whilst technically not a Free Zone (as corporation tax is payable on locally sourced profits) the Qatar Financial Centre was one of the first jurisdictions in Qatar to offer 100% foreign ownership, and it’s not only financial companies that can benefit. The Qatar Financial Centre boasts of a global financial hub that offers opportunities for international and domestic financial service providers. Ideally located, the Qatar Financial Centre is split into two areas, regulated and non-regulated activities, dedicated to uplift the finance sector and professional services sectors in Qatar that would ultimately boost the nation’s growth.
Umm Alhoul Free Zone is directly adjacent to Hamad Port, the world’s largest greenfield port, providing an optimal location for industries that require access to sea freight and shipping routes.
Umm Alhoul Free Zone offers a wealth of resources and connectivity, already capturing 27% of trade in the GCC region. Invest here to improve your global supply chain. Recommended industries include maritime industries, polymers and plastics, advanced manufacturing, and logistics.
You can also take advantage of Marsa (Arabic for “anchor”), the new marine cluster located within Um Alhoul. This maritime industry and leisure ecosystem are ideal for maritime industries as a logistics hub. Recommended industries in this zone include heavy manufacturing, emerging technologies, and industrial sectors.
In addition to industrial infrastructure, both zones have been seamlessly integrated with urban elements to make the zone an enjoyable living environment. Residents of the free zones will have access to housing accommodation, retail stores, parks, mosques, health clinics, and more. For ease of transportation, there is a metro system, bus routes, and plenty of walking and cycling paths.
QATAR SCIENCE AND TECHNOLOGY PARK: QSTP
The QSTP is a state-of-the-art business park where technology-based firms thrive (that is, the Innovation Centre, Tech Buildings, Single User Buildings, etc).
QSTP is a high-tech business park that offers state-of-the-art offices and facilities specifically designed for technology-based companies.
Companies can lease premises in our multi-occupancy buildings, or commission their buildings for design and build by QSTP.
QSTP’s rental charges are competitive with ordinary commercial properties in Doha, despite the technology and laboratory-grade specification of its buildings and infrastructure.
QSTP portfolio includes the Innovation Centre, Tech Buildings, and Single User Buildings.
FREE ZONES BENEFITS
Companies that operate within a free zone are often grouped within specialised areas. This allows them to grow within a community of like-minded organisations, learning from one another and creating a network of contacts within the industry.
With their focus on specific sectors, free zones can also offer companies dedicated to research and innovation facilities essential to both their operation and growth.
Base of Operations
Operating within a free zone in Qatar provides foreign investors access to nearby markets across the Middle East, Europe, North Africa, and Western Asia. Depending on the free zone, companies may also be able to benefit from access to state-of-the-art infrastructure at the airport and seaport zones.
Starting a business within a free zone can be quicker than setting up elsewhere in Qatar, typically with less paperwork involved.
Independent Legal Framework
Free zones have their own independent legal framework, which for the most part is based on English common law. That means, free zone companies are under the jurisdiction of the free zone authority, which can provide extensive benefits to the way they do business.