Qatar to allow 100% foreign ownership in business

By Nima Hassan Ali | Business Abroad

Jun 13

Qatar is about to welcome 100% foreign ownership in business, with the goal of becoming a prime target for new businesses in the region.

The rich oil country has decided to take the plunge in opening up the economy to the world in a bid to lure even more foreign investments and reduce the economy’s reliance on hydrocarbon in the wake of duelling oil price and a global shift over from fossil fuel.

On May 25th 2018, Qatar announced a new initiative allowing foreign investors to have 100% ownership in all economic sectors and providing them support through the provision of several incentives. According to Qatar National Agency and others media outlets, Qatar’s cabinet has been tasked to draft the legislation and decrees necessary to implement the initiative.

A new era to come

One of the biggest hurdles facing expat entrepreneurs in doing business in Qatar and the rest of Gulf States nations has been the mandatory Qatari partner as the majority shareholder with 51% of the company.
These forced relationships with their share of legal and financial risks have always been a strong deterrent for foreign start-ups since its inception in the 90’s. To avoid this, foreigners opted and still continue to set up shop at the QSTP or QFC where resident companies can be 100% foreign owned but it was costly and intricate process.

 With its new Commercial Company Law in 2015 , Qatar started improving the ease of doing business in the country when it removed the obligation of a minimum capital of QR 200,000 as well as clarified that the legal ownership structure of 51-49% didn’t preclude the profit sharing scheme to be determined by the partners among others new developments. But with this new initiative, Qatar is taking the lead among its neighbours.

Potential benefits of the 100% foreign ownership for business owners could include the provision of several incentives, most notably the allocation of land to establish their investment projects, in addition to the possibility of exemption of taxes and customs duties and free transfer of investments within and outside the country.

A consensual relationship will always trump a forced one in life and business. By accepting full foreign ownership, Qatar is creating a healthy investment environment where local and expatriate partners would be on equal footing thus protecting them from the risk of under the table deals and removing the need for side agreements.

The need for a local and expat partnership will remain but it will be based on common interests and goals. But one of the most crucial aspects that the new law will have to address would be the future of the businesses’ created according to the previous legislation. Would it authorise the transfer of share between partners and if so, on what conditions?

A necessary evolution

With the gradual depletion of oil resources, Qatar realised that luring new businesses and investments in its slowing economy is key to ensure its resilience and sustainability.

This new legislation, when enacted, would be a game-changer in the way of doing business in the country and could be a deciding factor for those would-be expat entrepreneurs in calling Qatar home. Furthermore, this will also help freelancers and consultants fully explore the benefits of the gig economy and establish themselves without the need of employment.

Qatar is not the only country in the Gulf Cooperation Council that made such decisions. The United Arab Emirates (U.A.E) this also announced its decision to allow 100-percent foreign ownership of companies. But its initiative should go further than the U.A.E.’s plan to allow full foreign ownership in certain industries.

Approving these laws doesn’t mean that implementation will swiftly follow but the will to change the status-quo is there. But we should be all managing our expectations until the law is published and put in practice. As the saying goes “the devil is in the details ".

LinkMotility is Now in Qatar!

Yes, we’re growing! We are excited to announce that we will be expanding our business in Qatar beginning this September 2018, and it could not be more timely in lieu with Qatar’s 100 percent foreign business ownership announcement. It will be our pleasure to serve you at our new Middle East location with the same quality and service you have come to expect of us for global employment and entrepreneurship solutions. We hope to see you soon!

Maximise profits and mitigate risks with LinkMotility’s global business set-up expertise

No matter which part of the world you are at, Qatar can be a great place to open a business- but you need to do your homework.

A great way to start is to get in touch with one of our experienced business- set-up specialists who can help you navigate the process efficiently, give you important feedback on your business ideas and marketing plans, as well as a realistic perspective on setting up a business in the region.

We at LinkMotility are focused on bringing businesses to the Gulf region to enable you to take advantage of this more open, growing economy.

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About the Author

Nima is the legal affairs expert and co-founder of LinkFacility. Her decade long experience as a banker for the Credit Agricole in Djibouti, East Africa, helped Nima accrue invaluable insights about the challenges in emerging economies related to business set-up, commercial and jurisdictional risks. At LinkFacility, she shares her indelible know-how of the world of global entrepreneurship with a solution-driven mindset, analytical attitude and a globalist outlook. Having lived, studied and worked in 6 countries across 4 continents, she blends her solid financial background with legal insights from both emerging and developed markets to tailor make solutions for businesses from an international standpoint. While formulating entrepreneurship solutions, Nima approaches business risk management with due diligence, rigorous compliance standards and a thorough knowledge of the regulatory framework of the target market. Nima is a double degree Honours graduate of Bachelor of Law (L.LL) and a Juris Doctor (J.D.) with a specialisation in International Law from the University of Ottawa, Canada.

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