How to set up a limited liability company in Qatar

How to set up a limited liability company in Qatar

- James Elliot-Square

More and more companies are looking to establish an economic presence in the Middle East. The nation of Qatar, with its fast-growing economy, attractive foreign investment policies, upcoming global events and focus on economic diversification, is a great option that a lot of companies are considering.

In recent years, the Qatari government has invested heavily in major infrastructure and hospitality projects such as the FIFA World Cup, the Lusail Light Rail Transit Project and the redevelopment of the old Doha Port. These projects will generate enormous revenue and create many investment opportunities for foreign businesses.

If you plan to start a business in Qatar, it is important to understand the various company structures that are available to business investors and how they differ. Each has its own unique benefits, requirements and applications.

This article is a guide to the Limited Liability Company (LLC) option in Qatar, its advantages, the process of incorporation, and the requirements for eligibility.

Benefits of Forming an LLC in Qatar

An LLC (also referred to as a WLL company) is the most common type of business formed in mainland Qatar. This model is perfect for most small to mid-sized businesses. Under an LLC, ownership can range from two to fifty partners.

The primary benefit of an LLC is that it provides strong investor protection. Each shareholder is only liable for the percentage of the company that matches their investment. In the event of a lawsuit, the investor’s personal assets outside of the LLC are protected.

LLCs that are formed in Qatar get access to additional benefits. First, the Qatari government is very friendly toward the setup and approval of these types of business entities, meaning that process to register an LLC is relatively quick and easy. Also, LLCs in Qatar are taxed at one of the lowest business rates in the world — only 10 percent.

While forming an LLC is ideal in many situations, it won’t work for every type of business. There are some key requirements that you must consider before deciding if an LLC structure is right for your business:

  • Qatari Ownership - In most cases, an LLC must maintain a minimum of 51% ownership by a Qatari national. However, there are limited situations where the Ministry of Economy and Commerce may permit foreign investors to own up to 100% of the company.
  • Share Capital - LLCs must have a minimum share capital of QAR 200,000 (approximately equivalent to 55,000 USD).
  • Value of Shares - The company must be divided into equal shares that value QAR 10 or more (2.75 USD).

What is the Incorporation Process for an LLC in Qatar?

The process to incorporate an LLC in Qatar is fairly straightforward. However, you will need to work with several different government offices throughout the process. It’s important to complete all of these steps in order to avoid any delays.

  1. Step 1: Register a Trade Name - First, you will need to apply to reserve the name for your business through the Commercial Registration and Licences Department. The cost for this will be QAR 1,000. However, names that don’t translate to Arabic may be charged an additional QAR 1,000.
  2. Step 2: Draft Articles of Association - The Articles of Association (AOA) will serve as the founding document for your organisation. It will contain information about the shareholders, company details, addresses, a list of business activities, and rules for how the organisation will be managed. This document will need to be written or translated into Arabic and submitted to the Ministry of Justice for approval.
  3. Step 3: Obtain a Commercial Registration - Next, you’ll return to the Ministry of Commerce and Industry (MOCI) to apply for a commercial registration (CR). The CR is valid for one year and permits you to open a bank account and start accepting invoice payments.
  4. Step 4: Open a Bank Account in Qatar - This is where you will deposit the minimum share capital QAR 200,000 required for the LLC.
  5. Step 5: Apply for a Trade Licence - Finally, you will need to apply for a trade licence with the MOCI. This part of the process typically takes the longest to gain approval. To apply for the trade licence, you will need a copy of your CR, AOA and documentation on the office location (either rented or owned space).

In Qatar the mainland LLC is the primary option for most companies looking to set up in the country to do business within Qatar. There are a number of Freezone options in Qatar for companies that are looking to be present in Qatar but that will be doing business within that Freezone and internationally.

For more information on the options between setting up in Qatar mainland or in one of the Freezones, such as QFZ or QFC, see the PPG article here on Qatar Freezones.

How can Venture Partner Qatar help?

While it is possible to go through the process of setting up an LLC in Qatar alone, it can be confusing and time-consuming. At Venture Partner Qatar, we have in-depth knowledge of business practices and incorporation requirements in Qatar as well as direct contact with many key government departments. We can advise you on the best company structure for your business venture and provide ongoing support and administration to ensure compliance with all local laws and regulations.

If you need guidance on setting up an LLC in Qatar or any other related company setup, restructuring, local partner or PRO support matter in Qatar, Abu Dhabi, Dubai, the wider UAE or Oman, then please do get in touch with us on +971 (0)4 456 1761 for Dubai or +974 4478 8765 for Qatar, or email us at info@vpqatar.com. For more information visit, propartnergroup.com/locations/qatar

Get in touch with James Elliot-Square

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