Qatar opens up to investments
PICTURE: Dutourdumonde Photography (Shutterstock)
Qatar has amended the Foreign Investment Act and for the first time allowed foreign ownership of companies and real estate in Qatar. In connection with the upcoming football world championship in 2022, this creates an environment for investments and opportunities for foreign companies. On January 7, 2019, the Qatari Emir, Sheikh Tamim bin Hamad Al Thani, announced a new Qatari law on foreign investment and it promises a truly major change for foreign investors in the country.
In particular, the new investment law introduces the principle that foreign ("non-Qatari") investors may newly own up to 100% of Qatari companies in general in all areas and sectors of the Qatari economy, except for those areas and sectors excluded from the scope of the law. The new investment law should in practice cover most economic activities and sectors. In the agricultural, engineering, fisheries, tourism, consulting and advisory services and services sectors in general the possibility of up to 100% foreign capital ownership is expected. The specific provisions should contain implementing provisions to be adopted by the Ministry of Economy in the coming weeks to months and the adoption of the new law will only enter into force.
The purpose of the new law is to attract foreign capital to the country to accelerate economic development and achieve economic diversification and modernization of the Qatar economy. The law falls within the framework defined by the document entitled "Qatar National Vision 2030", which is a broad-based strategic modernization plan from the Emir for his country. The liberalization and opening of Qatar abroad then accelerated considerably after June 2017, when neighboring Arab states imposed a trade embargo on it and a land, air and naval blockade. In this situation, Qatar had to quickly find new ways and partners for the supply of critical commodities. Qatar has largely succeeded in replacing former suppliers with new ones.
Another legislative change in the country, which allows foreigners in Qatar to own real estate in certain demarcated areas of Qatar's capital and Doha is also a major step forward. It permits the ownership of Qatari land and real estate for both private and commercial purposes. The new land law opens the way for foreign real estate companies and funds for the Qatar market. The implementing regulation has identified 10 areas where foreigners can own real estate without restrictions and another 16 areas with ownership limited to 99 years. Another advantage of the law is that during the period of ownership of the property, its foreign owner in Qatar will be granted permanent residence.
Foreign investors or entrepreneurs who come to Qatar most often use the so-called "Limited Liability Company", or LLC. However, owner, with a few exceptions, should be a Qatari citizen who in principle owns at least 51% of the company. Other legal form of business that foreign companies and investors use in their business activities in Qatar is the establishment of a so-called temporary branch of the company. The advantage of a temporary branch is the fact that it can be 100% owned by a foreign entity without any problems and Qatari partner is not needed. Quite a widespread form of doing business in Qatar is signing of an exclusive agency contract, which establishes a local sales representative of a foreign company, who carries out the sale and distribution of goods and services for a commission.
Access to the Qatar market has certainly never been easier for Czech businesses, even for example due to the introduction of a direct flight connection Prague-Doha, or thanks to the introduction of visa-free entry in the summer of 2017 for citizens of 80 countries, including the Czech Republic.