Setting up a Freezone company in Qatar, Set up Freezone company in Qatar

Qatar, recently ranked by Forbes in the top 40 best countries for business, is fast becoming one of the best places to expand your business.

To set up in Qatar, there are several key stages to be considered in developing a successful entry strategy to include; in-depth market research, developing a business plan, determining the right commercial structure, understanding the laws & regulations and finally considering implications of tax in Qatar.

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In Qatar there are few legal company formation options including the Free Zones which makes the decision process much simpler than in many other GCC countries.

Free zones are designated areas whereby foreign companies can set up businesses, assuring them of a certain degree of autonomy over their enterprise. Free zones are common in Gulf countries and are often grouped for specific industries, such as media or technology.

Free Zone Company: Qatar has main ‘free zones’, Qatar Science and Technology Park (QSTP), Qatar Free Zone Authority (QFZ) and Qatar Financial Centre (QFC). QFC is not a true free zone as, although it offers 100% ownership, corporation tax applies at the same rate for mainland companies. There are also restrictions on activities in QFC, no ‘trading’ (sales and import) for example but you are allowed to do business in Qatar mainland, and this is particularly useful for service-based companies.

QFZ has 100% ownership and a zero-tax regime, however, this free zone appeals to only a small number of specialised businesses. It should be borne in mind that as a general rule, government contracts are not awarded to companies that are not mainland companies with a local Qatari partner.

Benefits of the Qatar Freezones

The core advantage of establishing a free zone is 100% foreign ownership. Whilst this is key, there are limitations in accessing the free zones in Qatar and the success of your application will depend on your business activities. There may also be restrictions on where you can operate from and where/whom in Qatar you can conduct business with.

Top 5 things to consider before choosing a Qatar free zone:

Purpose of the company / business activities
Activity in mainland Qatar
Location
Lease facility requirements
Number of Visas required
Budget for setting-up

Qatar freezones represent an excellent option for foreign investors. They are considered separate from the domestic state ‘mainland’ area with regards to legal requirements and customs rules and as such have distinct benefits, including:

100% foreign ownership
0% Corporate tax
Full capital repatriation
Zero customs duties on imports
Modern digital infrastructure
Flexible structuring options
A transparent, business friendly legal environment
Access to an investment fund for small and medium size enterprises (SMEs)
Numerous joint venture and partnership opportunities

They are mainly focused on three key sectors: logistics, technology and chemicals, where Qatar can provide unique advantages over other foreign investment destinations.

There are currently three free zones operating under the QFZA and all are within 30 minutes of the country’s capital, Doha.

Requirements to set up in QFZA

There are 2 main steps involved in starting your business in a Freezone in Qatar (QFZ) – application stage and registration stage. Both stages are handled by liaison with QFZA (Qatar Freezone Authority) or through a company service provider like PRO Partner Group. Note that PRO Partner Group (PPG) Qatar can act as your agent to assist with the set up and liaison with Qatar Freezone Authority to ensure the correct and timeline set up of the freezone company in QFZ. PPG can act as your main point of contact through the process.

What is the QFZ Application process

This process includes obtaining general information on the company, financial and employment forecasts and a business plan detailing proposed operations and activities.

The documents that you will be required to submit at this stage are:

A copy of your company registration (If the company is already registered in Qatar)
Audited financial statements or a shareholder’s financial statement from the last 3 years
Copies of ID documents for all the directors of the proposed company
Proof of payment of the 300 QAR necessary for the application

Registration of QFZ company

The documents that will be submitted at this stage depend on the proposed business activity and structure.

QFZ LLC Formation

For incorporation of an LLC in QFZ, you will require all the documents relating to the free zone entity. These are:

Articles of Associations (AoA), which must be signed by shareholders or authorised representatives of the shareholders on every page
Documents pertaining to the incorporation of the free zone entity and appointment of an authorised representative (shareholder’s resolution)
All governmental documents that relate to the company shareholders

Note that where shareholders may be corporate entities then the relevant Board Resolution and Power of Attorney must be obtained from the country of origin and Notarised, Legalised and Attested through the Qatar embassy in that country. PPG can fully assist with this process as needed.

QFZ Branch Formation

In order to register a branch office in the Qatar Freezone, you must provide the following:

All documents that relate to the authorisation for incorporation of a free zone branch
Any documents that are connected with the appointment of a manager
Any other constitutional documents that are related to the originating parent company

With setting up Branch office in QFZ the relevant Board Resolution and Power of Attorney must be drafted from the parent company and obtained from the country of origin and Notarised, Legalised and Attested through the Qatar embassy in that country. PPG can assist with this process as needed.

What are the Fees for QFZ set up

The initial government fees to set up in QFZ are QAR 11,000 for an LLC.

This is comprised of QAR 300 freezone application fee, QAR 5,700 freezone registration fee and QAR 5,000 annual licence fee.

How can we help?

We understand that entering and developing in new markets is challenging. We can help you identify the correct legal entity for your business and assist you with all relevant PRO Services, such as Staff Visas, Immigration and Labour matters, and all relevant company licensing, corporate structuring and corporate governance.

If you need assistance in setting up a free zone company in Qatar, and for further information on any other related company setup, local partner or PRO service matter in Qatar, do get in touch with us on +974 4478 8765, email us at info@propartnergroup.com or complete the contact form below and we will be delighted to assist you.

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Type of free zones operating in Qatar

The main key differences between the free zone and mainland jurisdiction companies are surrounding where they are allowed to operate, conduct business, and what activities they are permitted to engage with. Additionally, companies operating in the mainland are required to pay corporate tax, whereas companies operating in the free zones might benefit from tax holidays.

The initial government fee to set up in QFZ is QAR 11,000, which is comprised of QAR 300 for the application, QAR 5,000 registration fee and QAR 5,700 annual licence fee.

Setting up in a free zone offers many benefits to a company including:

100% foreign ownership
0% corporate tax - renewable for 20 years (tax holidays)
Full capital repatriation
Zero customs duties on imports
No personal income tax
Mix of pre-built, land lease, flexible office space options to suit your current and future development plans

Whilst these are key, there are limitations in accessing the free zones and the application success can be dependant on business activity and your business plan.

To start a business in QFZ there are 2 main steps – the application and the registration stages. Both are handled with the Qatar Free Zone Authority (QFZA) or through a service provider such as PRO Partner Group (PPG). PPG can act as an agent and main point of contact in assisting with set up and liaison with QFZA ensuring correct and timely set up.

There are currently two main free zones in Qatar and all are within 30 minutes of the capital, Doha. The two free zones are: Qatar Science and Technology Park (QSTP) and Qatar Free Zone Authority (QFZA), which oversees Ras Bufonas Free Zone and Umm AlHoul Free Zone.

Qatar Financial Centre is not recognised as a free zone but as an onshore platform for foreign investors.