Set up a Limited Liability Company in Qatar, LLC Company Formation in Qatar

The most common method available to foreign investors setting up in Qatar is to incorporate a Limited Liability Company (LLC).

Currently, the law states that most Limited Liability Companies must have one or more local Qatari partner(s). The local partners’ shareholding in the LLC should be a minimum of 50%. In most cases however, a 51% shareholding will be held by the Qatari partner.

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.

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Types of company set up in Qatar - LLC

Benefits of 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/shareholders.

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 (Corporation Tax).

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).

Requirement to set up an LLC in Qatar

The process to incorporate a 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.

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.
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.
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.
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.
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 we 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 PRO Partner Group 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@propartnergroup.com. For more information, click here.

FOR MORE INFORMATION

Also referred to as a With Limited Liability (WLL) company, an LLC is the most common type of entity in Qatar as it’s a perfect model for small and medium-sized businesses. This entity type enables 2-50 shareholders and partners, who are only liable for the sum of their investment percentage in the company. This protects their personal assets outside of the company. Additionally, corporate tax is one of the lowest in the world at only 10%.

Qatar operates based on the territorial taxing regime. As a consequence, only revenues derived from Qatar sources and from activities performed within Qatar are taxable in Qatar. Qatar General Tax Authority oversees and governs tax policies and frameworks. Qatar has two independent taxation frameworks:

State-registered entities are subject to the State Income Tax Law.

Entities registered in the QFC are subject to the QFC Tax Regulations.

The standard tax rate on profits is 10% in both cases. However, there are important differences between the two frameworks, e.g. the QFC does not apply withholding tax or contract tax retention.

Register a Trade name and the business activities of the company
Prepare Memorandum of Incorporation
Obtain a Commercial Registration
Get a facility associated with your business activities (commercial location, commercial office, workshop, etc.)
Apply for a Trade Licence and the Immigration Card
Obtain a Computer Card (Establishment Card)
Register company with Ministry of Labour
Register with the General Tax Authority (within 30 days from CR issuance)
Apply for GM Labour Quota
Open a corporate bank account and register with WPS (Wages Protection System)
Appoint auditors
Register with Customs (if applicable)

In most cases (Mainland setups), there must be 51% ownership by a Qatari national and 49% can then be foreign owned. There are situations, depending on the business activities of the company, where 100% foreign ownership is permissible.

As per Companies Law in Qatar, if you wish to set up a LLC, in most cases you will require a local partner. Venture Partner, as a 100% Qatari owned company, can act as your local partner in the LLC. Having a ‘corporate’ rather than individual Qatari partner offers numerous advantages to the foreign investor.

In most cases (Mainland setups), there is no minimum requirement as to the share capital.