publications documents doing business in qatar 2013

Doing Business in Qatar

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Introduction Doing Business in Qatar has been prepared for the exclusive use of BDO and its clients. Its aim is to provide background information for setting up and running a business in the State of Qatar in compliance with the legislation in force. It is written in general terms and is not intended to be comprehensive. For more detailed information, advice should be sought from the BDO office with which you normally deal.

BDO International is a worldwide network of public accounting firms, called BDO Member Firms, serving international clients. Each BDO Member Firm is an independent legal entity in its own country.

The global network has 1200 offices in 138 countries, and some 55,000 partners and staff in Member Firms that provide business advisory services throughout the world.

BDO Qatar

BDO Jawad Habib Public Accountants and Management Consultant is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. BDO Jawad Habib Public Accountants and Management Consultant is a wholly owned subsidiary of Jawad Habib & Co. BDO is the brand name for the BDO International network and for each of the BDO Member Firms.

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Contents Preface ................................................................................. 5 Chapter 1 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 1.10 1.11 1.12 1.13 1.14 Chapter 2 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 2.10 2.11 2.12 2.13 Chapter 3 3.1 3.2 3.3 3.4 Chapter 4 4.1 4.2 4.3 4.4 4.5

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The Business Environment Geography ……………..……………………………………………………………………………..…….7 History …………………………………………………………………………………………………..…….7 Religion ………………………………………………………………………………………………….…...7 Population ……………..…………………………………….……………………………………….…..8 Natural Resources ……………………………………….…………………………………………...8 Language …………………………………………………….…………………………………………....8 Climate ……………………………………………………………………………………………………..…8 Government and Political System …………………………………………………….……..8 Legal Environment ……………………………………………………………………………….…… 9 Entry Points.……………..……………………………………………………………………….………9 Visas ……………………………..…………………………………………………………………...…….9 Work Permits …………………..…………………………………………………………………..…10 Driving License …………………..………………………………………………………………..…10 Health Cards ………………………..………………………………………………………..…..….10 Qatar Lifestyle Shopping centers & welfare benefit………………………………………………..……..12 Media …………………………………………………………………………………………………….….12 Time ………..………………………………………………………………………………………….…..12 Business hours ……………..…………………………………………………………………….…..13 Public holidays ………………………………………………………………………………….….…13 Transportation …………………………………………………………………………………..….13 Housing ………………………………………………………………………………………………….…13 Clothing ………………..……………………………………………………………………….……….14 Social customs ……………………………………………………………………………….…..….14 Cost of living ………………………………………………………………………………..….…..14 Post and telecommunication services ………………………………………….…….14 Shipping and airlines services ………………………………………………………….….15 Road and rail ……………………………………………………………………………………...…15 The Qatari Economy Gross Domestic Product (GDP) ………….………………………………………………...17 Public Finance ………………………………………..………………………………………….….17 The oil sector…………………………………………………………………………………….…..17 The natural gas sector ………………………………………………………………….……..17 Foreign Investment Free of transfer ……………………….….………..………………………………….…….…..19 Investment Incentives……………….…..……….………………………………….………….19 Foreign investment finance………………….………………………………………………..20 Foreign trade……………………………………………………………………………………………20 Customs exemptions ……………….…………………………………………………………….20

4.6 4.7 4.8 4.9 4.10 4.11 4.12 4.13 4.14 4.15 Chapter 5 5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 Chapter 6 6.1 6.2 6.3 6.4 6.5 6.6 6.7 6.8 6.9 Chapter 7 7.1 7.2 7.3 7.4 7.5 7.6 7.7 7.8 Chapter 8

Valuation ……………..…………………………………………………………………………….…...21 Temporary imports …………………………………………………………..……………….……21 Duty Exemptions…………………………………………………………………………………..….21 Free zones ………………………………………………………………………….………………….…21 Personal effects and restrictions …………………………………………………….…..21 Exports ……………………..………………………………………………………………………….…21 Foreign relations……..……………………………………………………………………………..21 Foreign investment law…………………………………………………………………………..22 Labor law…………………….…………………………………………………………………………..22 Property law for Non-Qataris………………………………………………………………..22 Guidelines for setting up a business in Qatar Setting Setting Setting Setting Setting Setting Setting Setting

up up up up up up up up

an industrial company in Qatar.……………………………………..….24 a company for government contracts ………………………………..24 a tourism company ……………………………..………………………….....24 a healthcare institution…………………………………………….….......24 an educational institution ………………………………………………..…25 a trade representative office……….…………………………………..…25 an engineering consultancy office ……….…………………….….….25 a law office …………………………………….…….…………………..……....25

Structure of Companies inside Qatar Simple Partnership Company ………….….…….………………………………….….….27 Joint Partnership Company ……………….…..….……………………………..….…….27 Joint Venture Company ….…………………………….………………………….….…..….27 Public Shareholding Company ……………………………….……………….….…….….27 Limited Shares Partnership Company……….…………………………….……….….28 Limited Liability Company ………….……………………….………….………………….28 One person company ………………………………….…………………….…………….…..28 Holding company ………….…………………………….…………………………….….……..29 One person company ………………………………….…………………….…………….…..29 Other information related to setting up a business in Qatar Investment attractions .…………….…………..…………………………………………..31 Banks/ Investment Businesses/ Insurance ….………………………………………31 Branch of foreign corporation or company ….…………………………...…….32 Commercial laws ….…………………………………………………………………….…..….32 Trademarks and intellectual property ………..…………………….……....….33 Agency rights ………………………………………………….………………….…………......33 Stock exchange ……………………………………………….……………………………….….33 Copyrights ……………..……………………………………….…………….………………..….33 The Tax Structure

8.1 Introduction .……………………………………………….………………………………………..35 8.2 Direct Tax …………………………………………………………….……………………………….35 8.3 Tax Administration ……………………………………………..……………………………….36 (a) Filing requirements …………………………………………………………..….36 (b) Accounting records and inspection….……..……………………….…..36 8.4 Tax Determination …………………………………………..………………………….……..37 (a) deductions ………………….…………………….………………………….…..….37 8.5 Tax Rates ……………….…………………………………………………………………….……..38 Page 3

8.6 8.7 8.8 8.9

Chapter 9

Accounting principles………………………………….………………………………………..38 Tax exemptions ………………………….……………………….……………………………….38 Tax treaties ………………………………………………………..……………………………….38 Other Taxes ………………………………………………………..……………………………….39 (a) Direct Taxation of business activities …………………………..….39 (b) Taxation of individuals ……………………..…………………………..….39 (c) Sales Tax or Value Added Tax ……………..………………………..….39 (d) Estate and Gift Tax ……………..……………..…………………………….…39 Qatar to host 2022 FIFA World Cup

9.1 Qatar is selected to host the FIFA World Cup ……….……….………………..41 9.2 Major construction projects are planned …….….……………………………….41

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Preface Who should read this guide?

Getting started to do business in a new environment is extremely exciting, yet you may struggle to get to grips with the economic, legal and socio-political framework of the country in which you are planning to operate.

Qatar is one of the world’s fastest growing economies. The GDP growth over the past three years is around 15%. Looking at the current fiscal policy of Qatar and the surpluses in fiscal and on current account, it is very clear the futuristic direction and advanced vision the country leadership is aiming for Qatar. Today, Qatar had plans in place to develop the whole nation economy, to make Qatar the world leader in producing liquefied natural gas, in parallel, several initiatives has been launched in the industrial sector, healthcare and education.

Due to the above, Qatar is becoming an attractive place to start new business, yet, fundamental questions arise from those who are trying to set up there business in Qatar. What are the rules about foreign ownership? How easily can you repatriate any profits you make? What types of companies you can set up? Relevant information about Qatari employment law? And the cultural or religious issues should you bear in mind?

Doing Business in Qatar should be read by anyone who is thinking of establishing a business in Qatar, be it a separate entity or a subsidiary of an existing foreign company, or anyone who is considering work in Qatar. It is also relevant to those reviewing their business in Qatar.

Scope Doing Business in Qatar describes the business environment and the financial and legal implications of running, or working for, the Qatar branch or subsidiary of a company based outside Qatar.

Most key issues are covered in this publication but it is outside its scope to deal with every aspect in detail.

For more specific information, please contact the BDO Member Firm in Qatar.

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For more information on BDO Qatar’s Full range of professional services, please contact one of the service leaders below: Contact: Gavin Brown Partner GSM: +974 66001 830 E-mail: gavin.brown@bdo.com.qa

Tel: +974 44999 530 Fax: +974 44999 533 Website: www.bdo.com.qa Palm Tower (B),38th Floor PO Box 24139 West Bay Doha State of Qatar

Chapter 1 – The Business Environment

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Geography Qatar is one of the smaller Arab Gulf states in terms of population and geographical area. It is Situated midway along the western coast of the Arabian Gulf between latitudes 24.27° - 26.10° North and longitude 50.45° 51.40° East. The country’s area is approximately 11,437 square kilometres and covers a low-lying limestone Peninsula projecting northwards about 160 kilometres into the Gulf. The coastline is 550 kilometres long and bounds the country to the west, north, and east.

The landscape of Qatar is generally flat arid desert terrain. The desert areas are predominantly low lying with the exception of scattered hill formations in the north west and rolling sand dunes in the south east areas.

History Qatar is an independent and sovereign State situated in the midway of the Western coast of the Arabian Gulf having a land and maritime boundary with Saudi Arabia, and also maritime boundaries with Bahrain, United Arab Emirates and Iran. The State of Qatar with its arid desert climate extends over a Peninsula of about 200 kilometres long and 100 kilometres wide covering a total area of 11850 square kilometres including a number of Islands and Islets. The Peninsula of Qatar emerged as one of the richest places in the Gulf, with regard to the trade and commerce during the 3rd and 2nd millennium BC. This period witnessed the spread of the Bronze Age cultures and civilizations from Mesopotamia to the Indus Valley settlements of India.

Qatar was ruled by Bahrain from the 1700s until the mid-1800s, when Great Britain and the Ottoman Empire began vying for control of the peninsula. It was a British protectorate from 1916 until 1971, when it became independent. In the 1980s and 90s Qatar had territorial disputes with Bahrain and Saudi Arabia. During the Persian Gulf War (1991) international coalition forces were deployed on Qatari soil.

Qatar’s modern history begins with the emergence of the Al-Thani family rule in the 19th century. On 3 September 1971, Qatar de-clared independence. Since that time, they have been the rulers without interruptions, and the country has progressed steadily, fuelled in large part by Qatar's development of its oil and gas resources.

Religion The country adopted Islam in the 7th century, and it is the official religion in Qatar. The majority of Qatari’s are Sunni Muslims. There are also small population of foreigners such as Christians, Jews, Hindus, Bahais and others. Public worship of nonMuslims faiths is prohibited and the freedom of religion is not protected by any constitutions.

Imam Mohamed bin Abd el Wahab Mosque

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Population The new population census of 2010 put the population of Qatar at 1,670,389. The results of the new population census in 2010 reveal an increase of 88.7% from the previous 2006 census of 885,359. Most of the population resides in Doha, the capital city. The rest of the population lives in other municipalities, mainly Al Rayyan, Al Wakra, Umm Slal, Mesaieed, Al Khor, and Al Shamal.

Natural Resources The State of Qatar is endowed with rich reserves of oil and gas, having the second largest gas reserves in the world, estimated at over 900 tcf. Qatar has four main state-owned oil fields: one onshore on the west side of the peninsula, Dukhan; two wholly-owned offshore, Idd-Al-Shargi and Maydan Mahzam; and one offshore field, El-Bunduq. This is shared on a 50:50 basis with Abu Dhabi.

A number of other offshore fields are operated in partnership with major oil companies.

Language Arabic is the native language of Qatar. English is widely understood and commonly used by all nationalities, especially in the fields of business and commerce. Farsi, Hindi, and Urdu are also widely spoken.

Climate The climate is characterised by a mild winter and a hot summer. Rainfall in the winter is slight, Averaging some 80 millimetres a year. Temperatures range from 7 degrees centigrade in January to around 45 degrees at the height of summer. The weather is generally pleasant during the period from October until May. Government and Political System Qatar has been ruled by the Al Thani Family since the 19th century. In 1916, a treaty was ratified with Britain in which Qatar became a British Protectorate. Qatar enacted a provisional constitution in April 1970, asserting its full statehood for the first time. The full independence of Qatar was announced on 3rd September 1971. On 27 June 1995, H.H. Sheikh Hamad Bin Khalifa Al Thani acceded as Head of State, Emir to the country. In August 2003, H.H. Sheikh Tamim Bin Hamad Bin Khalifa Al Thani was declared as the Heir Apparent. H.H. Sheikh Abdulla Bin Khalifa Al Thani holds the post of Prime Minister. The Council of Ministers are responsible for proposing draft laws and decrees, for implementing these laws and for supervising the financial and administrative affairs of the Government. The Advisory Council consists of 35 members chosen from all sectors of Qatari society and reviews draft laws proposed by the Council of Ministers prior to their ratification by H.H. the Emir. The Advisory Council has five permanent committees: Legal & Legislative Affairs, Financial & Economic Affairs, Public Services and Utilities, Domestic & Foreign Affairs, and Cultural Affairs and Information. H.H. the Emir is advised by a secretariat known as the Emiri Diwan, an executive staff that assists the Emir in the performance and discharge of day to day governmental responsibilities.

Qatar’s first civic polls - the elections for a Central Municipal Council (CMC) - were held in March 1999, an event which marked the country’s first step on the road to democracy. The second elections for the CMC was held in April 2003 with the first female member being elected to the council. The council will act as an advisory body for the Ministry of Municipal Affairs and Agriculture. The political reform programme of H.H. the Emir, Sheikh Hamad Bin Khalifa Al Thani, had taken a major step forward with the creation of the National Constitution Committee. This committee presented a draft of the permanent constitution in July 2002, which received an overwhelming positive response from the public in the referendum held in April 2003. The presented document calls for the creation of a 45 member national parliament, two-thirds of whose members would be directly elected by the people. The national parliament is to have legislative powers, while the powers of the executive and judiciary will be defined for the first time. The draft also ensures equality and the right to vote and run for office for all citizens, including women. The draft constitution provides for the freedom of press, of expression, of association and of religion.

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Legal Environment The judiciary is independent, and is currently divided into two court systems; the civil, commercial and criminal system and the Sharia Court system which administers Islamic laws. The civil courts are required to apply Qatari Laws as established by Emiri decrees, in enforcing agreements between parties. In 2004, the judicial system witnessed radical changes as per the new Judiciary Law issued in 2003, which became effective in October 2004. The new Judiciary Law will see the current two court system merge into one. A Higher Court called the Court of Cassation (Supreme Court) will be established, which will be considered the highest court of appeal in the country.

Entry Visas & Work Permits Entry Points Entry into Qatar may be made by land through the two main border points at Abu Samra, and Sauda Nathil, by air through Doha International Airport, and by sea through the ports of Doha, Mesaieed, Ruwais and Ras Laffan.

Visas Applications for visas are normally through the Qatari Embassy or Consulate in the home country. They must be based on a formal offer of employment or upon an invitation. Visas are also issued for business purposes, tourism and residency. A 14 day business visa extendable for up to 3 months is issued to visitors who visit Qatar for business purposes. For this, the visitor must have a valid passport and a return ticket. In addition, a letter signed by a sponsor in Qatar stating that the visit is for business purposes only, must be submitted to the immigration authorities at the airport 48 hours prior to the visitor’s arrival.

Tourist visas valid for 14 days, extendable for another 14 days, is available on arrival for nationals of 33 different countries, mostly from OECD countries. A 14 day visa costs QR 55 ($15).

Foreigners with valid residence permits from GCC states do not require a visitor’s visa. On arrival in Qatar they will be granted an entry visa that will be valid for 14 days; however, the residence permit stamped on their passports must be valid for at least 1 month. Holders of British passports with the right of abode in Britain may obtain a visitor’s visa for Qatar for up to 6 months on application to the Qatari Embassy in London, as well as other Qatari embassies overseas. A 7 day business visa may also be obtained from the embassy in London. The application for the business visa should be accompanied by a letter from a sponsor in Qatar stating that the visit will be for business purposes only. British citizens will, on application be granted a multiple entry visa for a maximum five year period, depending upon the validity of the passport.

A U.S. Citizen is entitled to a multiple entry visa valid for 10 years. However, the maximum length of stay in the country is 6 months after which the holder of the visa must leave the country. The application for the multiple entry visas must be made to a Qatari Diplomatic mission outside Qatar.

The visa is valid for business and tourism purposes. A residence visa valid for up to 3 years is granted to persons holding employment contracts to work in Qatar.

In February 2000, new expatriate-friendly measures were taken. Holders of “Work Visit Visas” can bring their families to Qatar, get an official ID card from the Bureau of Immigration, and obtain a health card, driving license and enrol their children in schools. The new “Work Visit Visa” is valid for one year, renewable every year after that. Two other new types of visa were also introduced; namely “Personal Visit Visa” and “Commercial Visit Visa”. The former applies to an expatriate’s spouse and relatives and is valid for six months or one year. Upon expiry, it can be renewed for another year after exit from the country, with a renewal fee of QR 300.

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Work Permits Work permits may be obtained only by local sponsors. Employees satisfying certain criteria may sponsor their immediate family to enable them to obtain a residence permit. Holders of work visas require an exit permit to leave Qatar; however, their dependents do not require such a permit while travelling abroad. It is essential for permanent residents in Qatar to obtain an identity card.

The ID card is essential when dealing with Government ministries on a day to day basis. There are no restrictions on the employment of women. Opportunities for such employment are determined by market demand and lie mainly in the teaching and medical professions, and in administrative work. Applications for residence permits are made after arrival in Qatar through the Immigration Department. These are becoming increasingly straightforward to arrange, and are normally available within 6 weeks of arrival. Family dependents’ also receive residence permits, and are deemed under the sponsorship of the family member employed in Qatar. For long-term visitor’s and residence visas, it is necessary to complete various health and fingerprint examination procedures. Most companies have well established departments to assist new arrivals in the completion of all necessary formalities. A person employed in Qatar may not work for anyone other than his or her sponsor. Sponsorship cannot be transferred until an employee has worked with the original sponsor for at least 2 years, and has been granted a release letter by that sponsor. Foreigners resident in Qatar are advised to register with their embassy on arrival.

Driving License All residents driving vehicles in Qatar are required to hold a valid Qatari driving license. These are obtained after the residence permit has been issued, and usually involve a driving and eye-vision test.

Health Cards In order to receive medical treatment from clinics and hospitals, it is necessary for foreign residents to obtain health cards. On payment of a nominal fee (QR 100 per person), these are issued by the nearest clinic on production of relevant residence permits. Health cards must be shown on all clinic and hospital visits.

Hamad Medical City

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Chapter 2 – Qatar Lifestyle

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Shopping Centres & Welfare Benefits There are many modern shopping centres with a wide range of consumer and luxury, goods. Lagoona Mall near to The Pearl is the latest addition to the Doha shopping scene. Another recent development is Villagio Mall, which has an exterior design reflecting an Italian hill town in form, scale ,materials and colour, while the interior plan is an organic, curvilinear form that uses a street metaphor to unite and connect variously themed elements and districs.

Villagio Mall

Royal Plaza, an up-market boutique mall, with over 105 retail outlets, is the most recent shopping mall in Doha. The City Centre-Doha, Land Mark, The Mall, Lulu, and Hyatt Plaza are other major shopping malls in Doha. The `City Centre-Doha’, is one of the Gulf’s largest retail establishment, and covers a total area of 286,000 sqm. It has 4 levels, that encompasses a family entertainment centre, a Winter Wonderland, Qatar’s first ice skating rink, a 10 pin bowling alley, a water park for children, a Cineplex with 14 screens, several food courts and a hyper-market run by the French retail giant Carrefour. In all, the number of retail outlets at the City Centre will number around 357.

Qatar is a welfare state and many aspects of the inhabitant’s needs are heavily subsidised: water, electricity and petrol are extremely inexpensive; some basic foods are subsidised; local landline telephone calls are free; there is no employee income tax, and there are no property or municipal taxes.

Most food and goods are imported into Qatar. The country is, however, self-sufficient in fish, and it also produces some of its own vegetables. There are also local dairy and poultry farms.

Media Qatar has seven daily newspapers - four in Arabic and three in English. Many international newspapers are available one or two days after publication. There are two local television channels, one Arabic and one English. The English service operates from afternoon until about mid-night. Cable and Satellite TV are also available, and offer a variety of news, sports and entertainment channels.

Additional premium movies and family entertainment channels are also available. There is also a local English-language radio station, which plays both classical and popular music. The popular news and entertainment channel Al-Jazeera is based in Qatar, and continues to gain international acceptance with its in-depth news coverage in Arabic & the English channels. Advertising is available in the press, on commercial TV and in cinemas and radio. Publicity material for general distribution should be in Arabic, although correspondence and technical literature is acceptable in English.

Time Qatar local time is GMT + 3 hours. Time difference and approximate flying times between Doha and certain major cities of the world is shown in the following table:

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Business Hours Government offices are open from 7:00 am to 2:00pm daily from Sunday to Thursday. Banks are open from 7:30 am to 1:30 pm from Sunday to Thursday. Commercial offices normally open from 8:00 am to 1:00 pm and from 3:30 pm to 6:30 pm.

Public Holidays Friday is the Muslim day of rest and all offices are generally closed. The major holidays observed in Qatar are as follows: • Eid Al Fitr 4 days holiday • Eid Al Adha 5 days holiday • Independence Day 18th December • Sports Day 2nd Tuesday of February Transportation Doha Port is the main seaport area for Qatar. There are also port complexes at Mesaieed and Ras Laffan. Doha Port handles general imports particularly consumer goods and container cargo.

Qatar is readily accessible by air through Doha International Airport. The airport is very close to the city centre and taxis can be hired at reasonable rates. Taxis are easy to obtain and are distinguished by their light green and white colour, in addition to white number plates. Metres are used in all taxis and the rates vary according to the time of day. Additionally, limousine services are available through hotels. There are also several car hire companies. Qatar has a modern road system that includes highways linking Qatar with other GCC countries. Persons with business or visit visas may drive if they have international driving licenses. There is an active market of second hand cars. Third party car insurance is mandatory, while comprehensive cover is recommended.

Housing Foreign expatriates and GCC citizens are now allowed to own and lease real estate in Qatar, as per the cabinet decisions No. (5) and (6) made during February 2006.

GCC citizens can own land in three designated areas (Losail, Al Kharaij and Jebel Thiyab), while foreign nationals and expatriates can lease properties for a period of 99 years in 18 designated areas. Earlier in 2004, foreign nationals were permitted for the first time in Qatar to own properties at three designated projects, namely, The Pearl-Qatar, Al Khor Resort, and West Bay Lagoon. As a result of these new developments and increasing demand, most banks in Qatar now provide mortgage loans, ranging from 25-30 years.

The pearl - Qatar

The Pearl of the Gulf project has recently been the first to attract large-scale investment offering over 7,500 high quality dwelling unit, and three luxury hotels offering around 900 rooms between them. The retail units covering approximately 60,000 square miles, and community infrastructural facilities such as entertainment centres, restaurants and parks.

Currently existing good quality housing includes a wide range of villas set in their own grounds, villa and bungalow developments located in compounds, and high quality two and three bedroom apartments. Many compounds have their own swimming and sports facilities and all accommodations have either central or individual unit air-conditioning.

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Housing (continued) Electric power is 220/240 volts, 50 cycles A/C. There is no piped gas for household usage, and gas for cookers is generally supplied in cylinders.

The piped water system carries drinking and multi purpose water, the latter coming form massive desalination plants. Domestic tap water is safe from bacteria and is therefore drinkable, but it should always be filtered. There is also a ready supply of bottled mineral water in the shops.

Clothing Light-weight cotton clothing is advisable during the hot and humid months between April and September. Medium-weight clothes are advisable for winter, particularly in the evenings. A modest code of dressing in public is recommended. Shorts for men and short-sleeved dresses for women are acceptable for expatriates only in Sports Clubs or other leisure activities. Traditional Qatari attire for men is a long cotton robe (dishdasha) with a head cloth (kufiya) held in place by a head band (aqal).

In public, Qatari women wear a black covering (Abbaya) over their dress, and a headscarf (hijab).

Social Customs The heritage of Islam is deeply rooted in the Qatari character and society. The importation and consumption of alcohol is strictly regulated. However, liquor permits may be obtained by foreign employees and the major hotels are allowed to serve alcohol to guests in restricted areas. Qatar prohibits the brewing and trafficking in alcohol. Drunken behaviour in public or driving under the influence of alcohol is an offence punishable by imprisonment, a fine or both and revocation of the offender’s driving license. Importing and using narcotics is illegal and punishable by heavy penalties. The possession of material deemed obscene is also punishable by a prison sentence.

Souq Wakif

Cost of Living After a number of years of strong increases, the cost of living fell in 2009 and 2010 (See following chart).

Housing costs have been the main inflation driver of the increase and the subsequent drop in the cost of living. punishable by heavy penalties. The possession of material deemed obscene is also punishable by a prison sentence.

Post and Telecommunication Services The postal system is state owned and as efficient as any in the world. Qatar’s telecommunication system stands amongst the most advanced in the world and has made an essential contribution to the State’s economic development. In the finance and banking sectors, the services provided are vital.

Their foundations can be traced back to the last century when the Gulf was already an important link in world communications. The role grew, and with it Qatar moved to the forefront of the telecommunications world.

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Post and Telecommunication Services (continued) Qatar’s telecommunication system, which gives immediate telephone, GSM, telex, facsimile and internet access to all parts of the world. Qatar Telecom (Ooredoo ) was the sole owner and operator of all the national and international services, including telephones, GSM, telexes, telegrams, facsimile and internet services. With the opening up of the telecom sector, a new mobile operating license has been issued to Vodafone Qatar, which successfully started full mobile operations in July 2009. The telecommunications sector is witnessing tremendous growth, with rising demand, especially in mobile communications.

Shipping and Airlines Services The State of Qatar is ideally located at the centre of the trade routes for very large crude carriers which spend more time loading in the Gulf than in any other waters. The department of ports and customs contributes to the international maritime organization.

Qatar has a number of ports but the most important of all are: Doha, Ras Laffan, which is located on the eastern coast 80 kilometres to the north of Doha from which oil is exported. Qatar also has Halul port which has an oil shipping terminal.

DHL worldwide Express operates a fleet of seven aircrafts from its regional hub erected next to the airport handling inbound and outbound shipments between the Middle East and the rest of the world.

Qatar's international airport is served by more than 40 international airlines, and it is under construction for the process of expansion. The current airport handles 4.2 million passengers per year, whereas the new airport will be able to handle 12.5 million passengers per year with an overall cost around $7.5 billion.

Road and Rail Currently, there are no railways in Qatar, but a GCC railway network will become a reality in five to ten years from now. A proposed bridge, referred to as the ‘Friendship Bridge’ will link Qatar and Bahrain via a 45-kilometre causeway - the world’s longest fixed link. A feasibility study to this project is already completed. This road network will be a natural extension of King Fahad Causeway that connects Bahrain and Saudi Arabia, thus linking the entire region.

The Doha Metro is an integral part of the Qatar Rail Development Program (QRDP). Consisting of 4 lines, the Metro network will cover the Greater Doha area and will include connections to town centers and vital commercial and residential areas throughout the city. In central Doha, the Metro will be underground, whilst at the outskirts; it will mainly be at ground level or elevated.

The formation of Qatar Rail began back in 2011 when the Doha Metro Project Qatar Rail Company was created. The Qatar Rail will be the owner and manager of Qatar’s rail network and will be responsible for the design, construction, commissioning, operation and maintenance of the entire rail network and systems.

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Chapter 3 – The Qatari Economy

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Introduction The oil and gas sector currently maintains its prominence as the largest contributor to the overall nominal GDP. Qatar’s economy has achieved a high level of diversification away from oil in recent years as gas has grown to account for an estimated 22.9% of GDP in 2011, with a contribution of QR145 billion.

Qatar’s successful economic diversification program includes projects to produce and export additional natural gas in the form of liquefied natural gas (LNG - Qatargas and RasGas), piped gas (Dolphin), gas to liquids (GTL - Oryx and Pearl), and investments in petrochemicals, fertiliser, aluminium, steel and various other industries.

Qatar Gas’ site

Qatar’s diversification efforts, coupled with a buoyant oil-sector, have led to rapid economic growth and the emergence of Qatar as one of the richest countries in the world in terms of GDP per capita.

Gross Domestic Product (GDP) Qatar’s nominal GDP growth continues at an astonishing pace, averaging 25.4% over the period 20072011. The oil and gas sector, as mentioned earlier, is the principal component of Qatar’s GDP and in 2011 accounted for 57.7% of overall GDP, amounting to QR364 billion (US$100 billion). According to figures published by the Qatar Statistics Authority (QSA), Qatar’s nominal GDP grew by an estimated 36.3% in 2011 to reach QR632 billion (US$174 billion).

Public Finance The state budget plays a vital role in the Qatari economy, as public expenditure represents a large share of the total effective demand, which is the main factor in achieving the Government’s economic development goals. Fiscal policy is considered the core of the overall economic policy, which aims to achieve full utilisation of economic resources and to raise standards of living in Qatar.

Qatar’s prudent fiscal policies continue to receive acclaim from sovereign ratings agencies, with the most recent upgrade given by Standard and Poor’s in July 2010, wherein it raised the long-term foreign and local currency ratings of Qatar to AA from AA-. Qatar has achieved a fiscal surplus in every year from 1999/2000 to 2010/11, collectively totaling QR270 billion (US$74 billion).

The Oil Sector Qatar’s main oil operations are carried out by state owned Qatar Petroleum (QP). QP produces oil on its own account from one onshore and two offshore fields and from other fields through Exploration/ Development and Production Sharing Agreements (EPSAs/DPSAs) between QP and major international partners. Qatar’s total oil exploration area is divided into 22 blocks covering a total surface area of 43,426 km2. According to QP, Qatar’s proven oil reserves (including condensates) currently stand at 25.9 billion barrels.

The Natural Gas Sector Qatar currently has the third largest natural gas reserves in the world, after Russia and Iran, estimated at over 894 tcf. These reserves are located in the North Field to the North-East of the mainland, extending over an area of approximately 6,000 km2, predominantly underlying the territorial waters of the State of Qatar. QP has initiated and developed two major LNG projects with foreign shareholders for the purpose of utilising the North Field gas for exports in the form of LNG. These projects are Qatargas and RasGas. QP has recently completed a major expansion of its LNG facilities, increasing production capacity to 77.1m t/y with a total of fourteen LNG trains now in production.

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Chapter 4 – Foreign Investment

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Qatar welcomes foreign participation in joint ventures through technology supply, market administration and equity participation. Government initiatives to attract foreign capital can be attributed to various investment incentives provided.

The State’s commitment in this direction was further witnessed through the passing of the Foreign Investment Law by an Emiri decree in October 2000, the setting up of the “Investment Promotion Department” at the Ministry of Business and Trade, the law establishing the Qatar Science and Technology Park, the law establishing the Qatar Financial Centre, and the new Commercial Law in 2006.

Free of transfer A shareholding company (joint stock) is required to transfer a sum equal to 10% of its profits for the year to a legal reserve until the reserve amounts to at least 50% of the paid-up share capital. This legal requirement represents the only restriction on a foreign participating joint stock company intending to remit all its annual profits generated in Qatar back to the holding company’s base of operations. Equity capital, loan capital, and all income streams arising in Qatar are freely remittable.

No foreign exchange restrictions exist.

Investment Incentives Qatar welcomes foreign participation in joint ventures through technology supply, market administration and equity participation. The Government offers several attractive incentives for joint ventures, such as: • Natural gas priced at a nominal and subsidised rate • Electricity at a very nominal rate • A developed infrastructure • Industrial land at a nominal rent starting at one Qatari Riyal (US$1 = QR3.64) per m2 per year; (Note: Land rent can differ according to the area and also between the public and private sectors) • No custom duties on imports of machinery, equipment and spare parts • No export duties • No taxes on corporate profits for pre-determined periods In addition to the above, the government also offers the following incentives: • 5-year renewable tax holidays (Based on Government approval) • No income tax on salaries of expatriates; • No exchange control regulations - the Qatari Riyal is freely convertible at a parity of $1=Qatari Riyals 3.64, a rate of exchange which has been stable for two decades; • Excellent medical and educational facilities; • Low rates of inflation; • Easy access to world markets with first class air and sea connections; • Excellent telecommunications facilities; and • Liberal immigration and employment rules to enable import of skilled and unskilled labour.

Economic liberalisation measures have been introduced to encourage inward investment. The private sector has been given a greater role to play in the development drive. In the pursuit of developing a strong private sector with an enhanced industrial base, the Qatar Industrial Development Bank (QIDB) was established in 1997, with an authorised capital of QR 200 million ($54.9 million). QIDB is 100% owned by the State of Qatar and provides loans at competitive rates of interest.

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Generous incentives have also been granted to private investors and measures were taken to encourage grass-roots projects and joint-venture investments. Non-Qatari capital is welcomed in business and industrial investments in the country. Economic reform decrees have been issued to activate industrial investment activities and to accelerate further the current rapid pace of development. Amongst these were proposals for liberalising the present restrictions upon foreign ownership of Qatari enterprises and plans for the re-codification of the principal commercial law statutes in order to meet the requirements of the next century. A New Foreign Investment law was approved in October 2000. The new law allows foreigners to own up to 100% share in certain projects.

Foreign Investment Finance There are no restrictions on foreign investors using their own funds to participate in Qatari businesses.

If a foreign investor’s own funds are insufficient to finance the business, the investor may approach a Qatari, GCC, or indeed any bank for finance. Bank financing in Qatar is granted on normal commercial terms.

Foreign Trade Foreign Trade in Qatar is regulated by the Qatar Customs Law No. 5 of 1988. In general, a person wishing to import goods into Qatar for sale, must be registered in the Importers Register and be approved by Qatar Chamber of Commerce and Industry (QCCI). The standard rate of customs duty in Qatar is 5% (ad valorem) in accordance with the new GCC customs union put in place since January 2003. Certain goods which compete with locally manufactured products are subject to a higher customs duty tariff as a protection measure. These include the following: • General Items 5% • Cement (currently exempt) • Steel 20% • Urea 30% • Tobacco 100% • Records and musical instruments 15% Goods manufactured in GCC countries are exempt from customs duty provided they are accompanied by a certificate of origin issued by the Chamber of Commerce in the GCC state of origin.

Customs Exemptions Exemptions from customs duty apply to the following items: • Personal effects and used household appliances and furniture belonging to foreign employees arriving in Qatar for the purpose of residence; • Equipment, materials and other supplies belonging to Government entities or state companies; • Food products such as grains, livestock, tea, coffee, sugar, rice, milk for infants and other essential consumer items; • Goods imported by embassies, legations and consulates.

The following documents are required for releasing imports: • Invoice and shipping document; • Certificate of origin; • Producer’s declaration of observance of the Israeli boycott rules; and • Full description of goods; • Health and quality certificate, if applicable.

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Valuation The basic value of the assessment of duty is the CIF value of the goods. Where only the FOB price can be established, duty is computed based upon the FOB price plus 15%.

Temporary Imports The Qatar customs authorities allow certain goods, including equipment, to be imported on a temporary basis. Temporary imports are subject to the prior approval of the Director General of Customs. This approval is normally valid for a period of 6 months, but may be extended by a further 6 months. A longer “temporary import� period may be granted in exceptional cases at the option of the customs authorities. A cheque or bank guarantee equivalent to the duty on a normal import must be deposited with customs to secure this temporary import arrangement.

Duty Exemptions Duty Exemptions as a general rule, duty exemptions will not normally be granted. However, it is stated Government policy to allow customs duty exemptions for Qatari joint venture entities, where there is a substantial investment from the foreign joint venture party. In recent years, blanket duty exemption for construction materials and equipment imports have been granted to the principal contractors working on projects undertaken in the oil, gas, water and electricity sectors.

Free Zones There are presently no free zones in Qatar. The newly established Qatar Free Zone Authority is in the process of setting up all of the regulations required to operate a free zone in Qatar. Certain initiatives in Qatar are working in a free zone regulated areas by the entity itself, such as Qatar Financial Centre and Science & Technology Park. .

Personal effects and restrictions Once a foreign employee is resident in Qatar, personal effects may be imported free of customs duty.

The import and sale of alcohol and pork products are prohibited. The import of pets is allowed. A valid health certificate issued by a Veterinarian registered with the Public Health Authorities in the country of departure must be produced for pets imported into Qatar. There is no known rabies in Qatar, but animals being imported must be immunised against this disease.

Exports No duties are levied on exports. It is forbidden to export goods to Israel or to export certain goods such as subsidised foodstuffs or antiques.

Foreign Relations While maintaining its identity and autonomy, Qatar has always regarded itself as an integral part of the Gulf Community. Even before independence, it was one of the most active advocates of economic and social co-operation and of a unified Arab voice in international forums. The State has always maintained a good relationship with the rest of the Arab world.

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Foreign Investment Law Law No. (13) of the year 2000 deals with aspects of foreign investments. The law stipulates that foreign investors may invest in all sectors of the national economy providing that they have one or more Qatari partners whose share shall not be less than 51% of the capital.

However, the law permits foreign investors to have 100% of the project’s capital, through a ministerial approval, in the sectors of agriculture, industry, health, education, tourism, and the development and exploitation of natural resources or energy or mining, provided it is in conformity with the country’s overall development plans. The law also allows for certain tax exceptions and benefits.

Labour Law Labour Law No. (14) was issued in May 2004, providing for the protection of the rights of workers, both national and expatriate, and giving Qatari individuals the right to form workers’ associations. The law grants equal rights to men and women on matters of wages, training and promotion, and protects the rights of working women. The law also stipulates working hours, holidays, leave, workplace safety norms, payments and end-of-service benefits. The law states that employment contracts should be written and authenticated by the Labour Department and issued in triplicate.

Property Law for Non-Qataris A New Property Law No. (17) for Non-Qataris was issued in June 2004, allowing Non-Qataris to own residential properties in select projects (‘Pearl of the Gulf Island’ project, ‘West Bay Lagoon’ project and ‘Al Khor Resort’ project).

According to Article 4 of the law, Non-Qataris can own real estate in the selected projects mentioned earlier for a period of 99-years, extendable for a further 99-years. Article 5 of the law states that NonQataris could own one or more residential units in these select projects.

The law states that it is the responsibility of the buyer to safe-keep and do the necessary maintenance of the property during the period of ownership. The law also stipulates that the property can be used only for the purposes initially agreed upon. The law mentions that owners are allowed to form building owners societies of which they can be members. The law also states that properties owned by NonQataris could be transferred to legal heirs.

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Chapter 5 – Guidelines for setting up a business in Qatar

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Introduction The Qatar Investment Promotion Department (IPD) is a government authority, which operates under the supervision of the Ministry of Business and Trade and is entrusted with encouraging the growth of Foreign Direct Investment in Qatar.

IPD provides investors with extensive information related to the local business environment, including current investment Ministry of Business and Trade projects, suitable business partners and government incentives.

IPD also links investors with the local government agencies and informs them on how to set up a business in Qatar. Shown below are guidelines on how to set up certain businesses in Qatar, which were provided by the IPD: A. Setting up an Industrial Company in Qatar 1. Apply for an Industrial License along with a feasibility study to the Department of Industrial Development at the Ministry of Energy and Industry.

2. Obtain a clearance from the Supreme Council of the Environment & Natural Reserves 3. Submit a request to be exempted from local partnership to the Investment Promotion Department at the Ministry of Business and Trade 4. Fill and certify the establishment contract form at the Ministry of Business and Trade 5. Apply for a commercial registration at the Ministry of Business and Trade 6. Obtain a commercial permit from the Ministry of Municipal Affairs and Urban Planning 7. Obtain a commercial registration number from the immigration office at the Ministry of Interior B. Setting up a Company for Government Contracts 1. Submit a request to be exempted from local partnership to the Investment Promotion Department at the Ministry of Business and Trade, along with Arabic translated certified copies of the following: a) The signed contract between the applicant (the foreign firm) and the government agency b) A certificate or memorandum of association of the foreign firm c) A certified copy of the power of attorney for the nominated director in Qatar 2. Apply for a commercial registration at the Ministry of Business and Trade 3. Obtain a commercial permit from the Ministry of Municipal Affairs and Urban Planning 4. Obtain a commercial registration number from the immigration office at the Ministry of Interior C. Setting up a Tourism Company in Qatar 1. Submit a request along with a business proposition to be exempted from local partnership to the Investment Promotion Department at the Ministry of Business and Trade 2. Obtain a clearance from the licensing department at the Qatar Tourism and Exhibitions Authority 3. Fill and certify the establishment contract form at the Ministry of Business and Trade 4. Apply for a commercial registration at the Ministry of Business and Trade 5. Obtain a commercial permit from the Ministry of Municipal Affairs and Urban Planning 6. Obtain a commercial registration number from the immigration office at the Ministry of Interior D. Setting up a Healthcare Institution in Qatar 1. Apply for a license to the Department of Medical Licensing at the National Health Authority 2. Submit a request to be exempted from local partnership to the Investment Promotion Department at the Ministry of Business and Trade 3. Fill and certify the establishment contract form at the Ministry of Business and Trade

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D. Setting up a Healthcare Institution in Qatar (continued) 4. For a full service healthcare institution, apply for a commercial registration at the Ministry of Business and Trade 5. Obtain a commercial permit from the Ministry of Municipal Affairs and Urban Planning 6. Obtain a commercial registration number from the immigration office at the Ministry of Interior E. Setting up an Educational Institution in Qatar 1. For K-12, obtain an approval from the Department of Private Education at the Ministry of Education; For Post Secondary Education, obtain an approval from the Higher Education Institute Department at the Supreme Education Council 2. Submit a request to be exempted from local partnership to the Investment Promotion Department at the Ministry of Business and Trade 3. Fill and certify the establishment contract form at the Ministry of Business and Trade.

4. Apply for a commercial registration at the Ministry of Business and Trade.

5. Obtain a commercial permit from the Ministry of Municipal Affairs and Urban Planning 6. Obtain a commercial registration number from the immigration office at the Ministry of Interior F. Setting up a Trade Representative Office in Qatar 1. Submit a request along with a certificate or memorandum of association of the parent company, and the certified power of attorney for the nominated manager in Qatar for the representative office, to the Investment Promotion Department at the Ministry of Business and Trade 2. Apply for a commercial registration at the Ministry of Business and Trade 3. Obtain a commercial permit from the Ministry of Municipal Affairs and Urban Planning 4. Obtain a commercial registration number from the immigration office at the Ministry of Interior G. Setting up an Engineering Consultancy Office in Qatar 1. Apply for a license to practice the proposed profession to the Engineering Acceptance Committee at the Urban Planning and Development Authority H. Setting up a Law Office in Qatar 1. Apply for a license to practice the proposed profession to the Lawyer Acceptance Committee at the Ministry of Justice For all contact details, please refer to preface page.

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Chapter 6 – Structure of Companies inside Qatar

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Introduction The regulations relating to the structure and governance of companies are governed by the Commercial Companies Law, Law No. (5) of 2002, replacing Law No. (9) of 1998. Certain provisions of the Commercial Companies Law were changed as per Law No. (16) of 2006. One of the main changes of the 2006 law is the removal of the provision where only nationals of the State were allowed to form certain types of partnership companies. Another significant change is the addition of two new types of companies. The 2002 Commercial Companies Law provides for the incorporation of eight different kinds of companies in Qatar : 1. Simple Partnership Company A Simple Partnership Company is a company formed by two or more natural persons who are personally and jointly responsible for the liabilities of the company.

• The name of the company shall be formed by reference to the name of all the partners, or the name of one partner followed by the words “And Partners”. A company may have a special commercial name, provided it is connected with the fact that it is a simple partnership company • All the partners in a simple partnership company shall be natural persons • A simple partnership company should have a Memorandum of Association 2. Joint Partnership Company A Joint Partnership Company is a company consisting of two types of partners: I. Joint partners who are empowered to administer the affairs of the company, and are jointly and personally responsible for the company’s liabilities II. Trustee partners, who merely contribute to the company’s capital without being responsible for its liabilities except to the value of their shares in the capital • All the Joint partners in a joint partnership company shall be natural persons • A Trustee partner shall not interfere in the management of the company 3. Joint Venture Company A Joint Venture Company is a company formed by two or more persons. It is an un-incorporated entity, without validity against third parties and has no legal personality and is not subject to any registration procedures in the commercial register. A Memorandum of a joint venture may be proved by all evidential means including substantive and circumstantial evidence.

• The resolutions of a Joint Venture Company are decided by the unanimous vote of all the partners, unless stated otherwise by the Memorandum • If non-Qataris are partners of a Joint Venture Company, then the company is allowed to carry out only those business activities stipulated by law for non-Qataris 4. Public Shareholding Company A Public Shareholding Company is a company whose capital is divided into shares of equal value, which are transferable. Shareholders of a Public Shareholding Company are not liable for the company’s obligations except for the amount of the nominal value of the shares for which they subscribe.

• A Public Shareholding Company should have a minimum of five shareholders and in all cases the name of the company should be followed by the words “Qatari Public Shareholding Company” • Subscription to the shares of the company shall remain open for not lesser than two weeks and not more than four weeks. Founders may extend the subscription period by another two weeks if shares are not fully subscribed, after obtaining the consent of the Ministry • A Public Shareholding Company shall have a definite term, which should be indicated in the Memorandum of Association and in the Articles of Association, in accordance with a format issued by a Ministerial Decree. The fixed term of a Public Shareholding Company may be extended by an extra ordinary resolution of the General Assembly

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4. Public Shareholding Company (continued) • The capital of a Public Shareholding Company should not be less than QR10 million. The nominal value of each share may be less than QR10, subject to the Ministry’s approval • A Company may purchase its shares for the purpose of selling them in accordance with the rules determined by the Qatar Financial Markets Authority The establishment of a Public Shareholding Company involves the issuance of a resolution by the Minister of Economy and Commerce. A Public Shareholding Company should have a Memorandum and Articles of Association which contain the following information: • The company name and principal place of business • The objective for which the company has been established • The names of the founders, their nationalities, place of residence, occupations, and the number of shares subscribed by each of them • The amount of company capital, the number of shares into which the capital is divided, their type and value • The duration of the company • A statement of every non-monetary share, the name of the person contributing this share, all the conditions relating to its subscription, and the specific rights in kind attached to this share • A statement of the estimated amount of formation expenses, remuneration and costs paid or undertaken to be paid by the company during its incorporation The founding members from among them shall elect a committee of not less than three and not more than five who shall take over the incorporation procedures before the authorised administration. The founding members are required to subscribe to not less than 20% of the shares and not more than 60% of the shares in the company. No founding member shall subscribe to more shares than the percetage allowed in the company’s articles of association.

5. Limited Shares Partnership Company A Limited Shares Partnership Company is a company formed by two groups, namely: I. Joint Partners comprising of one or more joint partners who are personally liable for the debts of the company.

II. Trustee Partners comprising of no less than four shareholding partners whose liability is limited to the value of shares held in the capital.

• The company should have a Memorandum and Articles of Association signed by all founding partners.

In all cases the words “Limited Shares Partnership Company” should be added to the name of the company • For the joint partners, the company shall be governed in the same manner as a Simple Partnership Company and all the joint partners shall be natural persons • The company should have a minimum capital of QR1 million, divided into shares of equal value that are transferable and indivisible and should be fully paid on incorporation • The company must have a General Assembly composed of all joint and trustee shareholding partners.

• A Limited Shares Partnership Company is managed by one or more joint partners 6. Limited Liability Company A Limited Liability Company is a company formed with at least two partners and not more than fifty partners, whose liabilities are limited to the value of shares held in the company. The shares of a Limited Liability Company are not freely transferable.

• The company should have a Memorandum and Articles of Association signed by all the partners. In all cases the words “Limited Liability Company” should be added to the name of the company • The company must have a minimum capital of QR200,000, divided into shares of equal value not less than QR10 each • The management of a Limited Liability Company is conducted by one or more managers whether being partners in the company or not • A Limited Liability Company may not engage in the business of insurance, banking, or in the investment of funds, whether as a principal or an agent Page 28

7. One Person Company A One Person Company refers to a company in which every economic activity and its full share capital is held by one natural or corporate person.

• The company should have an Article of Association stating its rules, data, and procedures of its entry and registration. Such a company shall not have a corporate personality before its registration. The name of the company shall be linked with the name of the holder of is share capital followed by the words “One Person Company (O.P.C)” • The company must have a minimum capital of QR200,000, paid in full. Such share capital may include shares in kind, whose value is estimated by professional experts • The company shall be managed by the holder of its share capital, who may appoint one or more managers to represent the company in its transactions. The company’s owner shall be responsible from his own assets for company obligations, unless he separates his personal interests from that of the company. The company shall be dissolved upon the death of the holder of its share capital, unless the shares of the heirs is held by one person, or the heirs select to continue the company in another legal form 8. Holding Company A Holding Company is a joint stock, limited liability or one person company financially and administratively controlling one or more other companies by holding at least 51% of the shares of such companies) whether they are shareholding, limited liability or one person companies.

• The Capital of a Holding Company shall not be less than QR10 million • The words “Holding Company” should be added to the name of the company • To the extent not contradicting to the provisions, holding companies shall be subject to the provisions hereof relating to shareholding, limited liability or one person companies, as the case may be

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Chapter 7 – Other information related to business in Qatar

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Investment Attractions The State has many attributes, which encourage investment by foreign businessmen. Its political stability, excellent communications facilities, relatively skilled work force with a good standard of spoken English, low cost of fuel and power, absence of personal and corporate taxation, and lack of exchange and profit repatriation controls are factors that make it the ideal place for many businesses to locate their manufacturing or service functions for the region, or simply the regional head office.

In brief, simplified administrative and legal systems and procedures, along with rapid industrialization assure excellent opportunities for potential foreign investors considering Qatar as a Middle Eastern hub for business activity.

Investment incentives also include: • 100 per cent foreign ownership allowed for certain categories of business.

• Neither VAT nor any form of sales tax on goods or service.

• Duty-free access to the GCC States (subject to conditions).

• Sustained low inflation.

• Strategic geographical position in a market of 100-million people • ‘Fast-track’ seven-day commercial registration procedure for new companies.

• A liberal and high standard of living.

• A well-developed multi-lingual Labour force at one third the cost of those in industrialized countries.

• No customs duties on imports of raw materials, semi-finished commodities brought for further processing, imports required for development projects, machinery for manufacturing, or on goods imported for re-export.

Banks/Investment Businesses/Insurance The State of Qatar has developed into an important regional financial centre, and the government has actively encouraged the development of banking units and investment banks in Qatar.

The CBQ currently offers the following banking licenses: Retail Bank license (‘RB’) Wholesale Bank license (‘WB’) In summary, RB’s are permitted to carry out all types of banking activities, in Qatari Riyal as well as other currencies, and with residents as well as non-residents of Qatar. WB’s wholesale banks may also undertake transactions without restriction, when dealing with the Government of Qatar and it’s agencies; CBQ bank licensees; and non-residents. However, they may only undertake transactions denominated in Qatari Riyal and/or with a resident of the State of Qatar, if these are wholesale in nature.

Banks may operate these licenses either on a conventional basis, or according to Islamic banking principles.

The CBQ currently offers the following investment business license categories: - Category 1 investment firm licensees - Category 2 investment firm licensees -Category 3 investment firm licensees -In summary, Category 1 investment firm licensees are able to undertake all types of regulated investment services, including dealing in financial instruments as principal. In undertaking these activities, they are able to hold client assets.

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Category 2 investment firm licensees are authorized to undertake all regulated investment activities, with the exception of dealing in financial instruments as principal. They are allowed to hold client assets, but are not allowed to act as principal in client transactions or act as a market maker.

Finally, Category 3 investment firm licensees are limited to undertaking the activities of “arranging deals in financial instruments” and/or “advising on financial instruments”. They are not allowed to hold client assets.

Investment firm licensees may operate on a fully Shari’a compliant basis, should they wish to, in which case, certain specific requirements would apply (such as the need to appoint a Shari’a supervisory committee).

The CBQ currently offers the following insurance licenses: Insurance firm license Insurance broker license Insurance consultant license Insurance manager license Insurance exchange operator license In summary, insurance firms are permitted to enter into contracts of insurance. They are licensed to undertake specific classes of insurance: general and long-term insurance activities may not be combined. Insurance firm licenses also specify the particular type of business allowed (direct, reinsurance or captive business); and on what basis the licensee operates (conventional or Islamic principles).

Insurance brokers are allowed to broker insurance contracts and provide advice on such contracts to their customers. Insurance consultants are solely allowed to provide advice on insurance contracts, without broking or otherwise arranging such contracts. Insurance managers are allowed to provide insurance management services: for instance, managing a captive insurer on behalf of a corporate group. Finally, insurance exchange operators are allowed to operate an insurance exchange.

Branch of Foreign Corporation or Company Branches of foreign companies and representative offices are allowed in Qatar. However, a Qatari in the same area of business must act as a sponsor unless the branch or office is being set up in Qatar to act as a regional goods or services distribution centre.

The Minister of Industry & Commerce must be satisfied, prior to registration, that the parent company is a viable financial entity and that it will assume full responsibility for the liabilities, commitments and obligations of business entities. Foreign banks that wish to set up branches in Qatar must also obtain the approval of the CBQ. However, approval can be granted by the Minister of Industry & Commerce, for the setting up of companies that are fully owned by non-Qataris. The reporting currency may be other than Qatari Riyal. The business activities of such a company must be stipulated by the Minister of Industry & Commerce. The Minister may also exempt such a company from the minimum required capital and authorise board meetings and general assembly meetings to be held outside Qatar.

Commercial Laws Commercial transactions and activities in general are regulated by the Commercial Law, which includes a detailed provision in respect of general bankruptcy procedures.

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Trademarks and Intellectual Property Qatar’s first trademark law was passed in 1978, and the latest amendments are incorporated in the Trademark Law of 1986, including the extension of the validity of trademark registrations from 5 to 10 years. Foreign patents and designs can also be protected through registration under the Trade Mark Law. Agency Rights Businessmen must be aware of the commercial effects of the Commercial Agency Law that came into effect in late 1986.

Under this law, only Qatari nationals or companies owned 100% by Qatari’s are permitted to import goods and equipment for trade and resale in the country. The position of the agent, as set out in his agreement with the principal, is secure provided the agency is registered in the Commercial Agencies Register maintained at the Ministry of Industry & Commerce. Only the registered agent may import goods for resale in Qatar.

Under the law, an agency may now be terminated upon the expiry of its fixed term. However, an agent, in the case where an agency is terminated due to the expiry of its term, shall have the right to claim compensation from the principal if the agent has made an obvious success of promoting the principal’s products. Where an agency agreement is for an indefinite period, and one party wishes to terminate it despite the other’s objection, the matter must be referred to an arbitration committee, whose form and rules of deliberation shall be determined by an order to be issued by the Minister of Industry & Commerce, unless a written agreement has been made between the two parties detailing separate provisions for the termination of the agency agreement.

Despite the protection provided to both principals and agents, it is still advisable that the principal should be satisfied with the prospective agent in all respects before committing himself to an agreement.

Stock Exchange In 1995, Qatar’s Stock Exchange commenced operations to formalize the market in the shares of local public companies. The authorities are keen to encourage the growth of the stock exchange and a number of new public companies have been floated since its establishment. The market started its operations on 26th of May 1997, and became fully electronic in March 2002. The Qatar Stock Exchange has signed cooperative agreement with Muscat Securities Market (Oman), the Amman Financial Market (Jordan), the Egyptian Stock Market and the Kuwait Stock Exchange, in which Doha securities market grew from 20 companies in the year of 2000 to 32 Qatar Exchange companies in 2005, and the total market capitalization has increased by 107.3% in the first half on 2005. The total value of traded share has also increased by 212% during the first half of 2005 to reach 46.5 billion from 14.9 billion at year end 2004.

Copyrights Copyrights are governed by Legislative Decree No. 25 of 1995. The law protects the author of creative works, which are of literacy, scientific, artistic or cultural nature. The Minister of Information is empowered to monitor the implementation of this law.

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Chapter 8 – The Tax Structure

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Introduction Law No. (21) of 2009 was issued on 17th November 2009 to cover the income tax system in Qatar (the Income Tax Law). It became effective on 1st January 2010 and replaced Law No. (11) of 1993. In general, the Income Tax Law provides that any business activity (as defined by the sources of income outlined below) carried out in Qatar will be subject to tax.

Income tax is levied on partnerships and companies operating in Qatar whether they operate through branches or in partnership with foreign companies. Tax is not levied on Qatari owned business enterprises. Law No. (9) of 1989 provides that nationals of Gulf Cooperation Council States are, from 1st March 1989, to be treated as Qatari citizens for income tax purposes. Accordingly, foreign companies wholly owned by resident Gulf nationals are not subject to income tax in Qatar.

Direct Taxes Income derived from the following sources within the State will be taxable: • Total income from activity practiced within the state (activity is defined as the profession, vocation, service, trade, industry, speculation, agreement or any job aiming at generating profit or income including therein renting of movable or immovable assets) • Total income from the partial or total implementation of contracts • Total income from real estate or the sale of stocks and shares in real estate companies • Total income from stocks and shares of companies resident in the State or enlisted in the financial market • Service fees paid to head offices, branches or related companies • Interest on loans borrowed from the State • Total income resulting from excavation, extraction or exploitation of natural resources • Total taxable income in accordance with double taxation treaties The following income derived from sources outside the State will be taxable • Interest and bank revenue provided that they result from activities within the State • Commissions due to agencies, mediation, or commercial representation for activities practiced within the state The following income is exempted from tax: • Total income of Qatari nationals residing in Qatar, including their shares in profits of legal persons • Total income of legal persons residing in Qatar that are totally owned by Qataris • Interests and bank revenues of natural persons who are not practicing a taxable activity • Interests and revenues of corporate bonds, development bonds, or general agency and institutional bonds • Capital gains derived by natural persons from the sale of real estate or securities provided that the assets are related to assets of a taxable activity • Dividends paid out of profits as per provisions of existing laws • Total income from vocational activities that do not require the use of machinery and provided that the annual income does not exceed QR100,000 and that the average number of employees during a financial year does not exceed three employees • Total income from agriculture and fishing activities • Total income incurred by non-Qatari companies for air or marine aviation providing that the principal of reciprocity is applied There are no personal taxes, social insurance or other statutory deductions from salaries and wages paid in Qatar.

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Tax Administration The Gregorian calendar is used for Qatar income tax purposes, but a taxpayer may apply for approval to use a different accounting period, ending on a day other than 31st December. The first accounting period may be more or less than twelve months, but it should not be less than six months or more than 18 months. (a) Filing Requirements Tax returns should be filed within 4 months as of the end of the accounting period. The filing period can be extended at the discretion of the Department of Taxation at the Ministry of Economy and Finance, but the extension period may not in any case exceed 8 months.

The amount due, in accordance with the tax return, becomes due on the day of the submission of the tax return. If the filing date is extended, the payment of taxes can be delayed to a maximum of 8 months if the taxpayer provides reasons acceptable to the tax administration.

The tax administration may also agree that taxes will be paid in installments in accordance with the Decree No. (10) of 2011 issuing the executive regulations of the Income Tax Law. Taxpayers are fined QR100 per day for failure to submit a tax return up to a maximum of QR36,000.

Taxpayers will also be subject to a financial penalty of 1.5% of the due tax for each month (or part of it) of delay subject to a limit not exceeding the amount of due tax.

If it appears that tax collection is at risk, the director of the tax department shall, upon the approval of the Minister of Economy and Finance, request a ruling from a judge for urgent matters for the confiscation of money of the taxpayer necessary for collecting tax and related financial penalties.

The taxpayer and other concerned parties have the right of appeal within 30 days of receiving notification of confiscation. The tax administration is empowered, with the approval of the Minister of Economy and Finance, to execute confiscation measures of monies if the taxes remain unpaid.

The Income Tax Law also empowers the tax administration to collect unpaid taxes from third parties, such as a taxpayer’s debtors, where the taxpayer fails to settle taxation liabilities.

Prompt filing of tax declarations and payment of a taxpayer’s liability, as well as general cooperation with the tax administration, are of great importance. (b) Accounting Records and Inspection The tax administration may when necessary request a copy of accounting records such as books, records, documents, accounts or statements. There is no legal requirement for books and records to be kept in Arabic.

The accounting books and records must be maintained for at least 10 years. All entities with capital exceeding QR100,000, total taxable income exceeding QR100,000 or headquarters located outside the state, must include financial accounts with their tax return. The financial accounts must be audited by an auditor who is registered in Qatar.

On submission of the final tax return and audited financial statements, the filings of the taxpayer will be assessed by the tax department. The tax department may dispute the return and estimate the tax assessment in cases where it is difficult to assess tax on the actual basis of income of the taxpayer.

This may occur if, for example, the taxpayer fails to present: a tax return or supporting documentation; complete books and records; or accurate and complete information and justification.

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(b) Accounting Records and Inspection (continued) The taxpayer will have the right to object against the tax department’s assessment by letter within 30 days of being notified of the assessment. If the period expires without an objection, the assessment becomes final and the assessed tax becomes due and payable.

The tax department will notify the taxpayer of its decision with respect to any objection within 60 days of receiving the objection. If the tax department does not reply to the objection within 60 days, it shall be considered a rejection of the objection.

If the taxpayer is not satisfied with the administration’s decision after the objection letter is lodged, he can appeal to a Tax Appeals Committee within 30 days of the date he is notified of the administration’s final decision. Additionally, an appeal may also be presented to the Court by either the taxpayer or the tax administration.

Tax Determination Tax liabilities are computed in a manner similar to general British and American practice, on the basis of profits disclosed by audited financial statements, adjustments for tax depreciation and any items disallowed.

In general, capital gains arising from the sale of business assets and business interests are included as an ordinary income. Income includes the aggregate of all gains and profits which are realised or have arisen from the carrying on of an activity in Qatar. (a) Deductions Expenses incurred to earn the taxable income are deductible. These include: • Costs of raw and used materials and services necessary to practice the activity • Interest of loans utilised in the activity • Salaries, wages, end of service benefits and equivalents including deductions for pension account, end of service benefit or investment funds of employees in the institution • Leases • Insurance installments • Doubtful debts • Allocations of banks to face doubtful debts and those formed by insurance companies to face risk up to a limit of 10% of net income • Depreciation of fixed assets • Grants; donations; allowances and contributions to charity, humanitarian, scientific or athletic acts paid in Qatar to governmental entities, agencies, general institutions or any other licensed body in Qatar, up to a limit of 5% of net income • Taxes and dues with the exception of income tax Individuals practicing “liberal” professions (independent professions based on the exploitation of knowledge and scientific, artistic and operational skills) may choose to deduct 30% of their total income rather than deducting all expenses and costs. The following cost and expenses are not considered tax-allowable deductions: • Expenses and costs paid to incur income that is tax exempted • Amounts paid violating State laws • Fines and penalties levied for violating State laws • Expenses or losses related to compensations recovered or recoverable if not included in total income; • Expenses on entertainment, hospitality, food and restaurants, vacations, club subscription and client gifts • Salaries, wages, bonuses and equivalent, including in kind privileges, paid to the owner (or his/her spouse and children), partners or managers with majority ownership • Share of the branch in general and administrative expenses of headquarters that exceeds a determined rate Page 37

Tax Rates The tax rate is 10% of the taxable income during the fiscal year. The following exceptions apply: • A tax rate of 35% will be applied to agreements that were concluded with the government before the current tax law came into force at the beginning of 2010 and did not state a tax rate • The tax rate does not apply to agreements related to petroleum operations for which the tax rate shall not be less than 35% • Without prejudice to provisions of tax agreements, amounts paid to non residents for activities conducted outside Qatar, will be subject to a 5% tax on the total amount of royalties and technical fees and 7% of the total amount of interest, commissions, intermediary and management fees and other amounts paid for services undertaken totally or partially in Qatar.

Accounting Principles Generally, accepted methods of commercial accounting must be applied and the accruals method must be followed.

If a taxpayer wishes to use a different accounting method, prior approval of the tax administration must be obtained. Compliance with International Accounting Standards is recommended.

Tax Exemptions The maximum period for an exemption is six years. The Income Tax Law provides for a Tax Exemption Committee to be formed, including two representatives from the Ministry of Economy and Finance (one of whom will head the committee) and one representative from the Ministry of Business and Trade, the Ministry of Energy and Industry and the Qatari Chamber of Commerce.

The Committee will be responsible for receiving and studying applications for tax exemptions, the cancellation of existing exemptions and providing recommendations to the Ministry of Economy and Finance.

When assessing projects for tax exemption the committee will observe the following conditions: • That the projects contribute to the support of industry, agriculture, fishing, trade, petroleum, mining, tourism, land reclamation, transportation, or any other activities or contracts that the country needs and which are of benefit both economically and socially • That the project falls within the planned development and economic objectives of the State, has the approval of the concerned Government department and contributes to the national economy The following points are considered with regard to the projects contribution to the economy: • The volume and status of the investment • Trade profitability • The extent of integration with other projects • Reliance of the project on production inputs available in Qatar • Impact of the project on the balance of trade and payments • The use of modern technology • Whether the enterprise will lead to the creation of employment opportunities for Qatari citizens Tax Treaties Qatar entered into double taxation treaties with 44 countries and continues to make efforts to increase the number of these agreements. GCC Nationals are considered equal with Qatari citizens with regard to tax transactions.

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Other taxes (a) Direct Taxation of Business Activities There is no corporate taxation system in Qatar with the exception of profits arising from the extraction of petrochemical products. (b) Taxation of individuals There is presently no personal taxation levied in Qatar. (c) Sales Tax or Value Added Tax There is presently no sales tax or value added tax levied in Qatar. (d) Estate and Gift Tax There are presently no estate or gift taxes levied in Qatar.

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Chapter 9 – Qatar to host 2022 FIFA World Cup

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Qatar selected to host the FIFA World Cup On 2nd December 2010, Qatar made history when it was chosen by the Fédération Internationale de Football Association (FIFA) to host the 2022 World Cup. This will be the first time the event has been held in the Middle East as Qatar will be will be the first Arab state to host the World Cup. Its success, despite strong opposing bids from much larger countries, such as Japan and the United States, was a testimony to the country’s effective leadership and the work of Qatar’s bid committee.

Qatar’s successful bid drew on its previous experience of hosting major sporting events such as the 2006 Asian Games, which was also a first for the Middle East.

Qatar was also able to showcase its capabilities by hosting two major events in 2011: the AFC Asian Cup and the Arab Games. Together with the many smaller sporting events that take place in Qatar annually (these include world-class events in sports such as tennis, golf, squash and motorbike racing), the State was able to demonstrate its ability and commitment as a host for major sports events.

The bid needed to overcome some major challenges. Average summer temperatures in Qatar exceed 45 degrees centigrade. The World Cup bid proposed carbon-neutral for the first time, in spite of the challenge of cooling the stadiums.

It also included an innovative proposal to build the stadiums using a modular design that will enable parts of them to be dismantled after the event and used as components to build 22 stadiums in developing nations.

The FIFA World Cup is a scale above previous events hosted in Qatar. The 2010 FIFA World Cup in South Africa hosted 3.2 million fans across 64 matches, and the global audience was estimated at nearly one billion.

Hosting the event will further establish Qatar’s reputation as a significant player on the global stage and act as a bridge between cultures and nations.

Sheikh Hamad bin Khalifa Al- Thani (Emir of Qatar) celebrates with FIFA committee for hosting Wolrd Cup in Qatar by 2022.

Major construction projects are planned Qatar already has excellent infrastructure and sporting facilities for its local population, but hosting an event on the scale of the World Cup, including the hundreds of thousands of visiting fans, will require a very substantial expansion of sporting facilities, accommodation and transport infrastructure.

Fortunately, many of the infrastructure requirements fit with Qatar’s existing development strategy and the relatively long time line between the award of the World Cup and the date the event is to be held means that Qatar has sufficient time to prepare.

There are a range of construction projects that are associated with the World Cup and will play a major role in Qatar’s economy over the coming decade. They can be split into three categories.

Firstly, nine new stadiums will be built, with capacities of over 43,000 people each, and three existing stadiums will be expanded. In addition, 64 training sites and other facilities for the teams will be required.

Secondly, 55,000 hotel and other rooms, between two to five star (mainly four star), will be added to Qatar’s existing stock of 44,000 rooms to accommodate visitors. The private sector is likely to fund much of the hotel development, but there is a government-backed guarantee to FIFA that sufficient accommodation will be available, and it will therefore step in to finance projects if required.

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Qatar to host 2022 FIFA World Cup Major construction projects are planned (continued) Finally, Qatar’s transport infrastructure will be massively upgraded with a new port, airport, metros, railways and roads. The infrastructure projects were already underway or planned before the World Cup bid, as part of the Transport Master Plan for Qatar, but have been given further impetus and urgency by the award.

The key developments include: • The New Doha Port. This is a massive development south of Doha which will come into operation incrementally from 2014. It is replacing the existing port in the heart of the city, part of which will be replaced by one of the World Cup stadiums • The New Doha International Airport. When its third phase is complete by 2017, it will have a capacity of 50 million passengers a year, or over 135,000 a day, which is more than sufficient for the peak demand expected during the World Cup • A 340 km urban metro system for the greater Doha region, spanning four lines and 98 stations, linking most of the World Cup stadiums • A national railway network with connections to neighboring GCC countries The estimated cost of all the development projects that are associated with the World Cup is in the region of US$ 100 billion. Although some of the hotels that are required for the event would have been built in any case by 2022, the scale of accommodation required will certainly result in an incremental increase in hotel construction. The direct cost of the stadiums themselves is budgeted at around US$3 billion.

The bulk of the investment required will come from the central government and government-related companies and foundations. The preparation for the World Cup will provide many opportunities for local and international businesses. Construction is being staggered over the 11 year period in order to minimise bottlenecks and inflation resulting from high demand for equipment, labour and materials.

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