Investment in Qatar – OpportunitiesPosted on May 20th, 2014
If you are considering about possible investment in Qatar, then this might be the best time to get involved. Qatar has emerged as one of the hot spot for the investors in the world. Qatar is one of the smallest country among GCC countries. Like most Arab countries, it is rich in natural carbon resources. It has the largest reserve for natural gas. Qatar is ruled by Al-Thani family since 19th century.
Regulations for doing business in Qatar are relaxed, which is helping foreign companies to get more assets into Qatar. Assets like foreign labor is allowed under controlled regulations. Visas and work permits are easily available from the Ministry.
The term “ICSID”
Convention on the Settlement of iInvestment Disputes has helped Qatar and foreign investors to come into an agreement for investing in Qatar resources. Investment in Qatar from foreigners is increasing since, the risk and cost in investment is reduced in Qatar. Due to this, Qatar companies and foreign partner companies have grown in confidence.
Regulation in Qatar for foreign investment
Foreign investment in Qatar is regulated by Law no. 13 of year 2000. This law regulates the investment of foreign capital in economic activities. Foreign investors are allowed to carry out businesses provided that they have a Qatari partner with a share of at least 51% of the company’s equity.
According to article 68 of the Qatari Commercial Companies Code, the government, departments, public corporations and companies in which the State holds minimum 51% shares may establish one or more shareholding companies by themselves or jointly with one or more national or foreign establishments.
These companies will not be subject to the provisions of Commercial Companies Code except in the extent that does not contradict what was agreed and provided for in the company’s articles of association.
Economic activities allowed under Qatar laws
Notwithstanding the limit of 49% set out for foreign ownership, exceptions can be made in certain industries where the government has an interest in encouraging foreign investment. Therefore, subject to the approval of the minister of economy and commerce, foreign investors are allowed to have an equity stake ranging from 49% to 100% in specified sectors including agriculture, Tourism, Manufacturing, Information Technology, Distribution services, Health and various other.
Taxation in Qatar
Tax in Qatar is governed by Law Decree No. 21 of 2009, issuing the Income Tax Law. This law repealed Law No. 11 of 1993 and replaced the sliding scale tax rate under the 1993 law with a flat tax at the rate of 10%. According to the 2009 Income Tax Law, any business activity carried out in Qatar is subject to corporate income tax. Tax applies on the companies’ profits and income sourced in Qatar for each previous taxable year commencing on January 1 and ending on December 31.
The new applicable tax rate under the 2009 tax law is a flat rate of 10%; however, business activities of companies owned in full by Qatari nationals are exempted from this tax. In fact, Article 4 of the income tax law, provides exemption from tax, inter alia, on the gross income of Qatari natural persons resident in the State of Qatar, including their shares in the profits of legal persons and the gross income of legal entities wholly owned by Qatari nationals. Where specific agreements have been concluded between the Qatar government and foreign companies in the oil sector and for the development of natural wealth and resources, the tax rate specified in the agreement would apply, provided that it is not less than 35%.
A new withholding tax regime on payments made to non-residents has been established under the 2009 tax law, as follows: 5% of the gross amount of royalties and technical fees, and 7% of the gross amount of interest, commissions, brokerage fees, director’s fees, attendance fees and any other payments for services carried out wholly or partly in Qatar. Some countries have treaties with Qatar, examples of which include France, Russia, China, Switzerland and the UK, to avoid double taxation.
With regards to Personal Taxation, there are no personal taxes, social insurance, or other statutory deductions from salaries and wages paid in Qatar.
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