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Insolvency procedures

What are the main insolvency procedures applicable to companies in your jurisdiction?

  • Liquidation
  • Bankruptcy

Liquidation – A solvent process typically commenced by shareholder consent and conducted in accordance with the company’s articles of association. A liquidator is appointed to realise the company’s assets, pay its creditors and distribute any surplus to its shareholders. The consent of the court and the shareholders is required to finally liquidate the company.

Bankruptcy – Where a company has stopped paying its commercial debts, a petition for bankruptcy can be brought by the company, a creditor, the public prosecutor’s department, the court or a majority of the shareholders.

The court determines the date on which the relevant entity became unable to pay its debts which cannot be more than two years prior to the date of the bankruptcy order.

Up to three bankruptcy administrators are appointed to preserve, manage and realise the assets of the insolvent entity.

NB: Qatari insolvency law is not yet fully developed and is largely untested.

Can a company obtain a moratorium whilst it prepares a restructuring plan?


To what extent do the directors of the company remain in control of its affairs during any of the above procedures?

They don’t. The powers of management is transferred to the liquidator or the bankruptcy administrator (as applicable).

Timeline to commence liquidation
How quickly can a creditor generally commence the liquidation of an insolvent company, assuming an undisputed claim and no opposition from the company?

As a general guideline 12 to 24 months, however, bankruptcy proceedings are extremely rare in Qatar.

Overseas proceedings
Do your courts recognise insolvency proceedings commenced in the courts of another jurisdiction?


Position of creditors

Forms of security
What are the main forms of security over movable and immovable property?

Security over immoveable property is taken by mortgages over land and affixed structures

Security over moveable property is taken by:

  • pledges over moveables
  • assignments of receivables
  • pledges over shares and bank accounts

Preferential status
Which classes of creditor are given preferential status? Are any classes subordinated?

The statutory order of priority of creditors is as follows:

  • employees
  • Qatari government
  • landlords
  • judicial costs, taxes
  • secured creditors
  • unsecured creditors
  • shareholders

Treatment of foreign creditors
Are foreign creditors treated equally to domestic creditors?


Termination of contract by reason of insolvency
Are contract terms permitting termination of the contract by reason of insolvency valid?

Yes theoretically (and they are commonly used). We are not aware of this being tested before the courts.

Retention of title
Are retention of title clauses effective?

Retention of title clauses are routinely included in contracts involving Qatari entities. There is no reason to doubt their efficacy but we are not aware of the position having been tested in the courts.

Setting aside transactions

Transaction avoidance provisions
What are the main transaction avoidance provisions, and who can challenge transactions?

The following pre bankruptcy transactions can be set aside where they are entered into after the company has suspended payment of its debts:

  • gifts
  • settlement of debts before they fall due
  • settlement of a debt in a manner otherwise than that agreed upon
  • grants of security
  • transactions where the counterparty knew the bankrupt company had suspended payment of its debts

Position of directors

Risks for directors
What are the risks facing the directors of an insolvent company?

The directors can be held civilly liable for the company’s debts if the value of its realised assets is less than 20% of those debts. The directors can escape liability if they can prove that they prudently administered the company’s affairs.

Directors can be held criminally liable for fraud or wilful misconduct.