Qatar currently allows foreign companies to establish legal entities in three jurisdictions and has plans to add several more. In this blog, I will examine the key aspects of each jurisdiction’s requirements from an immigration perspective.
Differences in immigration processes and procedures among the different jurisdictions are often overlooked when registering a legal entity in Qatar. Neglecting immigration considerations when making business decisions can lead to additional administrative and financial burdens.
The Three Existing Jurisdictions
The bulk of foreign companies in Qatar are “mainland companies” registered under the Ministry of Economy and Commerce (“MEC”). Such businesses may be 100% foreign owned or joint ventures with Qatari companies. In either case, the immigration process is mandated by the Ministry of Interior (“MOI”) and the Ministry of Administrative Development, Labour and Social Affairs (“labour department”). Foreign companies must consider that registration under the MEC requires the business to obtain special approval to hire foreign workers from the labour department, sign local employment contracts with its employees, and to participate in the Wage Protection System (“WPS”)
Among its other features, the WPS verifies that a Qatar Work Residence Permit holder receives a salary through the Qatar entity’s payroll in accordance with their Qatar employment contract.
The Qatar Financial Centre (“QFC”) was initially established to facilitate the registration process for companies specialising in the financial services sector. However, in recent years, the QFC has started issuing licenses for companies in a wider range of business fields, including legal services, consultancy services, electronics, and energy related services. Companies registered under the QFC, which may be 100% foreign owned, are exempt from the labour department’s visa approval, Qatar employment contract registration requirements and from participation in the WPS. Additional immigration related benefits of the QFC include an on-site immigration office, facilitating applications, and a streamlined residency visa process for dependents.
For more information on the QFC, please visit here.
An important part of the Qatar Foundation, the Qatar Science and Technology Park (QSTP) free zone is a high-tech business park for international technology companies and an incubator for start-up technology businesses. While the QSTP allows for 100% foreign ownership, its strict guidelines permit only companies within the science and technology sector to register under its jurisdiction. From an immigration standpoint, the QSTP shares the QFC’s exemptions from the requirements for obtaining visa approval from the labour department, registration of Qatar employment contracts, and from the WPS. However, family residency visa processing times are typically longer for QSTP entities compared to the QFC.
For more information on the QSTP, please visit here.
New Investment Free Zones on the Horizon
Since the imposition of the current blockade on Qatar by other GCC states, the State of Qatar has shown great interest in developing new investment routes for foreign investors that will include new Investment Free Zone jurisdictions and perhaps relaxed immigration and labour regulations.
In November 2017, the Emir H H Sheikh Tamim bin Hamad Al Thani issued Decree Law 21 of 2017, amending the provisions of Law No 34 of 2005 on Investment Free Zones to include the economic zones of Hamad International Airport with capital and assets worth QR50bn. New free zones are also planned at the new Hamad Port, near the Industrial Area, and near Lusail city.
The advantages of registering with one of the Investment Free Zones include the freedom to choose the project’s legal form and ownership structure, a waiver of restrictions on the origin of capital, greater freedom in transactions, and streamlined import and monetary mechanisms. Further, companies will be permitted to set product prices and profits and will enjoy exemptions from capital assets and product requirements and import and export duties.
Little information has been released regarding immigration policies for the newly established Free Zones. Based on the statements issued by the State of Qatar, such matters will be managed by the Free Zone Authority, which will have ultimate jurisdiction over immigration and labour matters. Based on these announcements, we expect to see the establishment of more free zones with more relaxed immigration processes