Qatar Banking & Commerce e-Guide

Q A T A R B A N K I N G & C O M M E R C E E-G U I D E

77

Extracted from issue

spring

2020 summer

Contents • Banking and Finance • Economy • Investment and Trade

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• Special Features The Court System in Qatar New Rules for the Stock Exchange SMEs Defined 3/26/20 10:11 AM

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Founder & Managing Editor Hilary Bainbridge Marhaba endeavours to quote accurate information and updates each of its sections every issue.

However, the magazine accepts no liability in the case of unintentional errors. © 2020 Marhaba Information Guide.

All Rights Reserved. No part of this magazine may be reproduced, in any form, without written permission of the publishers.

Dana Public Relations PO Box 3797, Doha, Qatar Tel (+974) 4465 5533, 4465 0083 Fax (+974) 4465 5588

General Information marhaba@qatar.net.qa Retail Sales retailsales@marhaba-qatar.com

Editorial Sarah Palmer (Editor) Ola Diab (Deputy Editor) Terry Sutcliffe Gina Coleman Online Lubuna Jeffin Advertising Howard Bainbridge

Digital Lalaine Turqueza Charlotte Wright Weslee Dizon Retail Sales Ayen Molina Design and Artwork Dick Tamayo Mar Principe Arnel Ramos

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Banking and Finance • • • • •

Useful Numbers: Banks and Exchange Houses The Banking Network in Qatar • Currency The Banking Sector • Qatar Central Bank • Qatar Credit Bureau Loans, Bank Charges and Interest Rates • Accounts • Offshore Banking Financial Services and Insurance • Islamic Finance

Economy • Economic Growth and Gross Domestic Product (GDP) • Trade Surplus • The Budget • Inflation and Cost of Living • Population and the Labour Force

Commerce Useful Numbers Investment and Trade • • • • • •

Incentives • Investment Regulations • Choosing a Business Structure Company Structures • Commercial Registration Export and Import • Taxation • Intellectual Property Regulatory Bodies and Government‑owned Entities Qatar Financial Centre • Qatar Exchange • Real Estate Developers and Real Estate Agents Selling Property • Business Etiquette

Feature – The Court System in Qatar Learn more about the Supreme Judicial Council, which defines how Qatar’s law courts perform.

Feature – New Rules for the Stock Exchange A set of new guidelines aims to encourage new foreign investment with increased transparency and reporting by listed companies.

Feature – SMEs Defined

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Contents

There is now a unified definition for small and medium enterprises in the country, as well as support from government agencies.

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Banking and Finance Bank

Telephone

Website

Ahlibank

4420 5222

ahlibank.com.qa

Al Khalij Commercial Bank

4494 0000

alkhaliji.com

Commercial Bank of Qatar

4449 0000

cbq.qa

Doha Bank

4445 6000

dohabank.qa

Qatar Development Bank

4430 0000

qdb.qa

Qatar National Bank

4440 7777

qnb.com

Arab Bank Qatar

4438 7777

arabbank.com.qa

Regional Banks

Banking and Finance

Branches of Foreign Banks Bank Saderat Iran

4441 4646

bsi.com.qa

BNP Paribas

4453 7115

mea.bnpparibas.com

HSBC

4442 4722

hsbc.com.qa

Mashreq Bank

4408 3333

mashreqbank.com/qatar

Standard Chartered Bank

4465 8555

sc.com/qa

United Bank Limited

4444 1314

ubldirect.com

Islamic Banks Barwa Bank*

800 8555

barwabank.com

Masraf Al Rayan

4425 3333

alrayan.com

Qatar First Bank

4448 3333

qfb.com.qa

Qatar International Islamic Bank

4484 0000

qiib.com.qa

Qatar Islamic Bank

4402 0888

qib.com.qa

4405 6666

qinvest.com

Investment Banks QInvest

*Barwa Bank merged operations with International Bank of Qatar in April 2019

Currency and Exchange Alfardan Exchange 4453 7777 alfardanexchange.com.qa Al Jazeera Exchange 4436 3822 aljazeeraexchangeqatar.com Al Mana Exchange 4442 4226 almanaexchange.com Al Sadd Exchange 4432 3334 Al Amir Street Arabian Exchange 4443 8300 arabianex.com Gulf Exchange 4438 3222 gulfexchange.com.qa/en Travelex Qatar 4443 4252 travelex.qa Unimoni Exchange 4436 5252 unimoni.com/qat Western Union Send money online and via the app, or find a branch at westernunion.com/qa/en

The Banking Network There are over 250 bank branches and 850 ATMs across the country, with most in Doha but also further afield. They are located in nearly all of the malls, hotels, souqs and petrol stations. Visitors can usually access funds in their home accounts by using their ATM cards here, and some allow the withdrawal of USD and Euro – check with the relevant bank(s) for details of commission or exchange rate fees. Major credit cards are widely accepted. Exchange houses provide remittance services and foreign exchange and are licensed by Qatar Central Bank. There are no exchange control regulations, but movement of money in and out of local accounts is monitored. Account holders may need to provide a declaration of origin for large cash deposits.

Opening hours: Generally Sunday – Thursday 7:30 am – 1 pm, however many banks have extended branch operations. Check the respective bank's website for the up to date list of timings and locations for branches and ATMs. All day/extended hours: Ahlibank, City Center-Doha: Saturday – Thursday 10 am – 3 pm, Friday 4 pm – 10 pm CBQ, mall branches: Saturday – Thursday 9 am – 2:30 pm/3:30 pm – 9 pm, Friday 3:30 pm – 9 pm Qatar Islamic Bank, Medina Centrale, The Pearl-Qatar: Sunday – Thursday 11 am – 6 pm Friday: Al Khalij Commercial Bank (al khaliji), City Center-Doha: 4 pm – 9 pm QNB, City Center-Doha, Lagoona Mall and Medina Centrale, The Pearl-Qatar: 3:30 pm – 9 pm Saturday: HSBC, City Center-Doha: 8:30 am – noon QNB, City Center-Doha and Lagoona Mall: 9 am – 2:30 pm/3:30 pm – 9 pm QATAR AND COMMERCE E-GUIDE © MARHABA M77 SPRING/SUMMER 2020 © MARHABA 346 BANKING

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marhaba.qa Currency The unit of currency is the Qatari Riyal (QAR), divided into 100 Dirhams (Dh), issued by Qatar Central Bank (QCB). It is pegged to the US dollar at a fixed exchange rate of USD1 = QAR3.64.

Notes in circulation are QAR1, QAR5, QAR10, QAR50, QAR100 and QAR500; coins are Dh5, Dh10, Dh25 and Dh50.

Banknotes incorporate security threads, as well as special features for recognition by the blind and visually impaired.

Four GCC countries support the creation of a Gulf Monetary Union (GMU) – Qatar, Saudi Arabia, Kuwait and Bahrain; the UAE and Oman have withdrawn entry. The GCC Supreme Council in 2008 approved the Monetary Union Agreement and the Statute of the Monetary Council. The headquarters of the Gulf Monetary Council opened in Riyadh in October 2013. Monetary union between the GCC countries was proposed in December 2013; subsequently Qatar, Kuwait, Bahrain and Saudi Arabia agreed to establish a unified central bank with a currency pegged to the US dollar. However, there has been no further action since 2013, and this looks unlikely given the blockade which started in June 2017.

The Banking Sector The Qatari banking sector currently comprises a number of regional, foreign and Islamic banks. The state-owned Qatar Development Bank provides financing to small and medium enterprises, while QInvest focuses on investment banking, asset management and investing its own capital.

Barwa Bank and International Bank of Qatar (IBQ) announced in August 2018 that they had signed a final agreement to merge the two banks – the first merger in Qatar's banking history – to create a Sharia-compliant financial institution with more than USD22 bn in assets. The legal merger was completed in April 2019 and the new entity will trade as Barwa Bank. As such, IBQ products are being converted to Sharia-compliant equivalents.

Meanwhile, new institution Energy Bank will launch with a targeted capital of USD10 bn to fund hydrocarbon projects across the world. The Qatar Financial Centre-based bank will progressively scale up its capital base to become the world’s largest Islamic lending institution and follows the end of Qatar's self-imposed moratorium on the development of new gas projects.

A new loan-to-deposit requirement of 100% came into effect in 2018. The adoption of International Financial Reporting Standard (IFRS) 9 by QCB has strengthened the provision coverage at Qatar’s commercial banks – under the IFRS standard, banks and financial entities have to set aside a certain proportion of profit against losses for unseen reasons. QCB data shows the NPL ratio was3.0% in 2018. QCB also set up the Supreme Emergency Committee in 2018 to monitor the day-to-day activities of financial institutions in the country, addressing emergency matters and easing the flow of work.

The International Monetary Fund (IMF) stated in June 2019 that 'Qatar’s banking sector remains healthy, reflecting high asset quality and strong capitalisation' and that 'Qatar’s economy has successfully adjusted to the dual shocks of lower oil prices and diplomatic rift. Prudent fiscal policy, an appropriate monetary anchor, sound financial regulation and supervision frameworks and considerable buffers continue to underpin strong macroeconomic performance. Increased gas production, a slower pace of fiscal consolidation, infrastructure programmes and adequate credit growth will underpin growth over the medium term.'

Qatar Central Bank Under Law No 13 of 2012 Qatar Central Bank and the Regulation of Financial Services, QCB is deemed an autonomous corporate body, with a capital of QAR50 bn (USD14.28 bn) and under the direct control of The Amir. It is headed by a governor appointed by The Amir, and primary goals include financial stability, supporting developmental activities and strengthening the national economy. The law is not just for banks, but includes insurance companies, exchange houses, Qatar Exchange and QFC-registered entities. Decree No 27 of 2018 renewed the term of the Governor of QCB, HE Sheikh Abdulla bin Saoud Al Thani, for five years from June 2018.

Under Law No 13 of 2012, the Financial Stability and Risk Monitoring Committee shall study existing and future risks related to all banking, financial, insurance and stock market activities. The panel works closely with the Ministry of Finance to frame general policies.

The law provides strict penalties for anyone accepting deposits from the public without a valid licence from the banking regulator – violators can ©

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Banking and Finance

face a jail term of up to five years and/or a fine of up to QAR5 mn. For those refusing to accept the legal tender of Qatar, there is a jail term of three years and/or a fine of up to QAR5 mn. Issuing forged currency means 10 years in jail and/or a fine of QAR10 mn. Manipulating accounts incurs a prison term of up to three years and/or a fine of up to QAR200,000.

Regulations in 2013 curbed local banks’ investment options. Equities and bonds can account for up to 25% of a bank’s capital and reserves (previously 30%); debt issued by the government and national banks are exempt. The regulations also limit the amount banks can place with individual companies and unlisted securities: a maximum of 5% of capital and reserves for foreign investments and 10% domestically. The cap for total foreign equities is set at 15%.

Law No 20 of 2019 on combating money laundering and terrorism financing was issued in September 2019, replacing Law No 4 of 2010, with implementing regulations following in December. The new law is in accordance with the latest international standards adopted by major international organisations including Financial Action Task Force, and highlights Qatar's regional role in setting standards in its legal and regulatory framework for combating money laundering and terrorism financing.

The Qatar Renminbi Centre (QRC), which opened in 2015, is the first clearing centre in the region to offer Renminbi (RMB) clearing and settlement, increasing financial connectivity between China, Southwest Asia and the MENA region. The centre provides access to China’s onshore RMB and foreign exchange markets to local financial institutions – Chinese companies have become active partners in the Qatar market, and the RMB centre will facilitate trade via their agreement with QCB. qatarrmbcentre.com

The Second Strategic Plan for Financial Sector Regulation 2017–2022 QCB, the QFC Regulatory Authority (QFCRA) and the Qatar Financial Markets Authority (QFMA) jointly launched in December 2017 the Second Strategic Plan 2017–2022 for the future of financial sector regulation in Qatar, an extension of the First Strategic Plan 2013–2016. The new plan comprises five main goals: • Enhancing financial sector regulation and promoting regulatory cooperation.

• Developing financial markets and fostering financial innovation.

• Maintaining integrity of and confidence in the financial system.

• Promoting financial inclusion and financial literacy.

• Developing human capital.

The plan aims to create a regulatory framework allowing growth, is 'inclusive and sustainable', promotes innovation and financial technology (fintech), and successfully tackles cyber-security threats. qcb.gov.qa

Qatar Credit Bureau Bad loans have been reduced since the Bureau started operations in 2011. The centre is not involved in the granting of credit facilities to individuals nor imposing any restrictions on banks. Access to customers' creditworthiness is available only to institutions operating under QCB. Qatar Credit Bureau provides analytical data and supports banks’ use of advanced techniques in risk management, as well as support sustainable growth of credit in Qatar. It provides banks with information on customers' total exposure in the market and the loans they hold, enabling banks to choose prospective customers. cb.gov.qa

Loans, Bank Charges and Interest Rates Loans: Under QCB rules, a doubtful loan is one in which no monthly instalments have been paid for 180 days; a bad loan is one that has not been serviced for a year. Banks in Qatar have to closely monitor loan disbursement and forward reports on customer creditworthiness to QCB. There is also a duty to track and follow defaulting customers and seek resolution – if this fails, they will take legal action. Non-payment of loans could lead to a travel ban for Qatar and possibly the GCC. QCB has imposed ceilings on the amounts a bank can lend as a personal loan both to citizens and expatriates. Banks cannot lend more than QAR400,000 as a personal loan to an expatriate, with a maximum repayment period of 48 months, against a maximum 50% of total monthly salary, and at a maximum 6.5% interest rate. Qatari citizens can have a maximum loan of QAR2 mn over a maximum 72 months. Banks cannot use post-dated cheques for the loan value.

Mortgages: Generally available – check with each bank for their individual requirements. Documents usually required: Valuation Report from an approved real estate agent; salary assignment letter if the home loan is the first facility with the bank; ID for Qataris or passport and valid residence card for expatriates; copy of the Title Deed and map; and building insurance cover.

Discuss provision for life assurance against any loan amount taken and consider updating your will.

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marhaba.qa Bank charges: Banks must prominently display all interest rates on personal loans and credit cards, as well as publish them in local newspapers.

Credit cards: A maximum 12% annual interest rate can be charged. Cards can usually only be issued when customers transfer their salary or have an adequate deposit at the bank.

Interest rates: Announced by QCB on overnight deposit and loan transactions between QCB and local banks through the Qatar Money Market Rate Standing Facility (QMR), a monetary instrument through which local banks can request access to loan and deposit facilities with QCB at daily interest rates.

As there is fixed parity between the Qatari riyal and the US dollar, QCB short term interest rates policies are subordinated to the fixed exchange rate policy, making QCB overnight interest rates closely related to its USD counterpart, the Fed Funds Rate.

In October 2019 QCB decreased the overnight lending rate from 4.5% to 4.25%, the deposit rate to 2%, and the repo rate from 2.25% to 2%.

QCB and Bloomberg jointly launched the first Qatar interbank offer rate (QIBOR) fixing in 2012. This is the interest rate charged by banks in Qatar for interbank transactions.

Accounts Standard bank facilities: Include debit/credit cards, standing orders, money transfers, personal loans, vehicle loans and mortgages on current and savings accounts (including joint accounts). Some accounts offer longer terms, higher interest and the option to save in US dollars, pounds sterling and Euros.

24/7 telephone and Internet banking services offer additional options, and most banks have an app, allowing for bill payments and account enquiries.

With mobile banking services a customer relations officer will visit you at home or work to assist with banking requirements. Most banks also offer premium banking services.

International bank account number (IBAN): Adopted in January 2014 as a standard for identifying and numbering all bank accounts in Qatar, and effective from May 2014. The system applies to all accounts in banks operating in the country, found on bank statements or online in account details. The existing account number is not replaced; additional characters appear in front of the account number to form a 29-character IBAN. All incoming and outgoing transfers to and from banks and financial institutions must use IBAN.

Opening an Account: Documents usually required: • A valid residence card or work visa. A worker’s dependants (eg spouse and family) can open an account but may require his permission as he is their sponsor (check with the individual bank).

• Valid passport.

• For a current account, a letter from your employer or sponsor confirming your monthly salary in Qatari Riyals, with the company’s official stamp. You may have to transfer your salary to the new account but check with the individual bank.

• Some banks may ask to see your tenancy agreement to establish your residential address.

• Take copies of these documents, along with identity photographs. Ask for photocopies of any documents signed.

The Wage Protection Scheme (WPS) is an electronic salary transfer system that ensures workers are paid as per their employment agreement, initiated by the Ministry of Administrative Development, Labour and Social Affairs and QCB. Employees therefore need a local bank account in order to receive their wages from the employer.

Cheques: A chequebook can be issued with a current account. They are not widely accepted for instant payment – these are made with cash or cards. Post-dated cheques are commonly used for house rental payments. The onus of responsibility is on the banks not to encash cheques before the designated date. Issuing a cheque without the necessary funds in your account is a serious criminal offence and the bank or creditor may notify the police, leading to possible prosecution.

Punishment for causing a cheque to bounce due to insufficient funds can be severe: jail terms of between three months and three years, and/ or fines of between QAR3,000 and QAR10,000.

Cases being filed are on the rise in the country, mostly for cheques for large amounts, and the Capital Security Department is now recording all cases electronically to speed up the process.

Credit cards: Widely available with all the usual associated privileges. The credit limit will be determined by the cardholder's salary or savings balance. Family members may also be eligible for a card. Check with the relevant bank at the time of applying for details of issuance and renewal fees, conversion charges, and payment options.

Customers should contact their bank when travelling overseas and wishing to use their credit or debit cards. Since May 2014 all banks’ credit and debit card transactions made using the ©

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marhaba.qa magnetic stripe inside and outside of Qatar will be declined. However, as certain countries (eg the US, India and the Philippines) still use the magstripe for transactions, customers should activate their card before travelling.

Complaints: Unresolved consumer complaints can be made online to QCB's Consumer Protection Department. qcb.gov.qa

Banking and Finance

Offshore Banking Offshore banking can be a secure anchor for an expat's finances while out of their home country.

Offshore banking is in a jurisdiction other than the one in which you live as a way to enjoy tax breaks and invest in foreign currencies. Check with local banks for availability of international bank accounts in US dollars, pounds sterling, or Euros.

Financial Services and Insurance Financial services are provided by entities registered with the Qatar Financial Centre (QFC).

Insurance products are widely available from local and international companies (see Living in Qatar in the Discovering Qatar section).

Under Law No 13 of 2012 Qatar Central Bank and the Regulation of Financial Services, only local insurance providers are permitted to underwrite any kind of risk against properties in Qatar. Decision No 1 of 2016 issued by the Governor of QCB provides a set of instructions related to licencing, regulation and controls, risk management, accounting, and other requirements.

Listed companies must have capital in excess of QAR100 mn or a risk-based capital, while unlisted companies must have capital higher than that set

by QCB or their risk-based capital.

Islamic Finance There are now six Islamic institutions: Barwa Bank and International Bank of Qatar (trading as Barwa Bank), International Islamic, Masraf Al Rayan and Qatar Islamic Bank. Qatar First Bank – regulated by the QFC Regulatory Authority – is the first independent, Sharia compliant investment bank.

Law No 13 of 2012 requires that Islamic banks must have a Sharia board with at least three qualified members approved by the shareholders.

Neither they nor members of their family may be employed or hold shares in the entity.

Institutions and services must abide by regulations set out in the Holy Quran and Sharia (Islamic Law).

Charging riba (interest) is haram (forbidden). Islamic banks charge fees for services and engage in profit sharing, enabling them to offer comparable facilities to those of conventional banks. Under a mudharabah (profit sharing) contract, the rabbul maal (owner of the money) authorises the bank to invest funds as per Sharia to make justifiable returns. Other concepts of Islamic banking include wadiah (safekeeping), musharakah (joint venture), murabaha (cost plus) and ijarah (leasing). Bai (saving) is halal (allowed). m

Qatar's next generation bank, al khaliji, has moved its headquarters to Lusail City.

Located at 69 Al Add Al Sharqi Street, the striking al khaliji Tower has a full-service branch, ATMs and the latest innovations in banking.

Checked & Updated February 2020

QCB continues to regulate the insurance market and develop it as per international standards, in line with the Second Strategic Plan for Financial Sector Regulation 2017–2022. Decision No 7 of 2019 sets out further instructions for licensing, organising and supervising the services of supporting insurance providers. It sets out the competencies and expertise for each supporting insurance provider, the nature of the work, areas of responsibility and functions, and the establishment of professional and ethical codes of conduct.

In February 2011, QCB asked banks to separate their Islamic and conventional lending operations by 31 December 2011. Islamic banking by other conventional banks are now barred from Qatar's market. QCB took this action due to certain supervisory and monetary issues, namely that holding both Islamic and non-Islamic deposits incurs different risks and reporting methods.

The banks either wound up or sold their Islamic operations, although some have not fully divested their Islamic bank portfolios, due to a provision in the QCB ban which allows them to hold existing Islamic loans until maturity.

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Economic growth and gross domestic product (GDP) One of the main aims of Qatar National Vision 2030 is to diversify the economy and reduce dependence on the hydrocarbon industries.

The International Monetary Fund (IMF) has projected Qatar’s GDP per capita will grow by 3.2% in 2020, with growth coming from a gradual recovery in oil prices and revenue diversification.

The economy has weathered the impact of the blockade imposed 5 June 2017. Hydrocarbon exports have not been affected. The Planning and Statistics Authority (PSA) Economic Outlook 2018– 2020 predicts the average real GDP growth to rise to 2.8% per annum, while the average rate of change of nominal GDP to be 8% during the same period.

The PSA released the estimates of GDP at current and constant prices for Q2 2019 in October. GDP at current prices (Nominal GDP) is estimated at QAR163.45 bn, a decrease of 3.9% year-on-year (y-o-y) and a decrease of 2.8% against Q1 2019.

GDP at constant prices (Real GDP) is estimated at QAR200.21 bn, a decrease of 1.4% y-o-y and a decrease of 0.9% against Q1 2019.

Export, Import and Trade surplus

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marhaba.qa 2019, in key sectors such as health, education and transport, and the hosting of the 2022 FIFA World CupTM. New projects worth QAR11.5 bn are expected to be awarded, of which QAR8.5 bn is expected to go to the Public Works Authority (Ashghal). Salaries and Wages has increased to QAR59 bn, up 3.3%, to take account of recently completed projects, such as the opening of the Doha Metro.

The infrastructure sector has been allocated the biggest expenditure for highway and internal roads development, expansion of the existing roads system, water and electricity networks, sewerage networks, and other public utilities. The main infrastructure projects under construction include the launch of the previously-shelved Sharq Crossing Project, linking Ras Abu Aboud and West Bay, and which is expected to be completed within four years.

The allocation for the healthcare sector is QAR22.6 bn, 11% of total expenditure in 2020, for major projects to improve healthcare services including expansion of Hamad Medical Corporation facilities and the establishment of new healthcare centres. The education sector is allocated QAR22.1 bn, (10.5%), for expansion of schools and other educational facilities.

In November 2019, the total exports of goods was QAR22.2 bn, a decrease of 13.0% y-o-y, and an increase of 10.6% month on month (m-o-m).

Imports amounted to QAR9.7 bn, an increase of 1.7% y-o-y and an increase of 15.8% m-o-m.

Qatar's trade surplus was approximately QAR12.5 bn, a 21.8% decrease y-o-y, and a increase of 6.8% m-o-m.

The budget again provides for the five-year, QAR12.0 bn land development scheme for Qataris, to include water and electricity networks, sewerage, roads and other infrastructure.

For more information about major projects, see the Infrastructure section.

The y-o-y decrease in total exports was mainly due to lower exports of petroleum gases/other gaseous hydrocarbons. Japan was the top destination for exports, followed by China and South Korea, while the US was the leading importer.

The PSA issues the monthly Consumer Price Index (CPI), used to calculate inflation rates in Qatar. The CPI for December 2019 was 108.26, an increase of 0.46% m-o-m. The IMF stated in its Article IV consultation with Qatar in June 2019 that inflation is projected to peak at 3.7% in 2020 due to the possible introduction of VAT, but converge to 2% in the medium term.

Major projects have been earmarked QAR90 bn (43%), the largest proportion and up 0.6% on

Inflation and cost of living

Population and the labour force Qatar's population has more than doubled in the last decade. Total population as at 31 December 2019 was 2,687,871: males 1,995,175; women 692,696. In the Labour Force report for Q1 2019, there was an increase of 2.73% compared to Q4 2018, with an unemployment rate of 0.1%. m Sources of information: Planning and Statistics Authority (PSA); Qatar Central Bank (QCB); Ministry of Finance ©

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The budget The State Budget for 2020, announced in December 2019, has again been based on an oil price of USD55 a barrel, and is forecast to achieve a QAR500 mn surplus. Revenue is again estimated at QAR211 bn, and spending at QAR210.5 bn, up 1.9%. Expenditure is the highest in the past five fiscal years, as the country is committed to completing numerous development projects across multiple sectors, including those related to National Development Strategy 2018–2022.

Economy

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Commerce

Commerce

Qatar is a member of the World Trade Organisation and its trade policies create a competitive international trading market. The government supports the growth and success of businesses in a bid to diversify the economy. Qatar is a member of the Gulf Cooperation Council (GCC), which also includes Bahrain, Kuwait, Oman, Saudi Arabia and the United Arab Emirates. The blockade by Saudi Arabia, the UAE, Bahrain and Egypt has led to a number of restraints and made travel between these countries difficult. However, Qatar has strengthened relations with a number of other countries and increased trade routes to mitigate exports and imports.

Organisation

Telephone

Online

Map

American Chamber of Commerce in Qatar

4020 6038

amchamqatar.org

C4

Communications Regulatory Authority

103/4406 9938

cra.gov.qa

C4

Department for International Trade (UK)

+44 (0)20 7215 5000

gov.uk

General Authority of Customs

4445 7457

customs.gov.qa

C4

German Business Council Qatar

4431 1152

gbcqatar.com

C4

Hukoomi (Qatar e-Government)

109/4406 9999

gov.qa

C4

Mada Assistive Technology Center

4459 4050

mada.org.qa

C4

Ministry of Commerce and Industry

16001

moci.gov.qa

A4

4404 4444

edu.gov.qa

C4

Ministry of Finance

16020/4446 1444

mof.gov.qa

C4

Ministry of Justice

137/4021 5555

moj.gov.qa

C4

Ministry of Municipality and Environment

184/4434 8888

mme.gov.qa

C4

4407 0000

moph.gov.qa

C3

16016/4045 1111

motc.gov.qa

C4

Ministry of Education and Higher Education

Ministry of Public Health Ministry of Transport and Communications Planning and Statistics Authority

4495 8888

psa.gov.qa

C4

188/4495 1111

ashghal.gov.qa

C4

officemanager@qanzba.org

qanzba.org

Qatar British Business Forum

4496 2080

qbbf.com

Qatari Businessmen Association

4435 3120

qataribusinessmen.org

Qatari Business Women Association

4420 9109

See their Facebook page

Qatar Chamber

4455 9111

qatarchamber.com

D4

Qatar Development Bank

4430 0000

qdb.qa

D4

Qatar Exchange

4433 3666

qe.com.qa

C4

Qatar Financial Centre (QFC)

4496 7777

qfc.qa

C4

Qatar Intl Court & Dispute Resolution Centre

4496 8225

qicdrc.com.qa

C4

Qatar Investment Authority

4499 5919

qia.qa

A4

Qatar National Tourism Council

4406 9921

visitqatar.qa

A4

Public Works Authority (Ashghal) Qatar Australia & New Zealand Bus Assoc

C4

qpwn.org

Qatar Science & Technology Park

4454 7070

qstp.org.qa

C2

QFC Regulatory Authority

4495 6888

qfcra.com

C4

Checked & Updated February 2020

Qatar Professional Women's Network

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Embassies can provide valuable information on commercial activities and can connect you with their business council/chamber of commerce – see the Discovering Qatar section for contact details.

Translation services can be found in Living in Qatar, also in Discovering Qatar.

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Qatar has one of the fastest growing global economies thanks to the third largest concentration of natural gas reserves in the world. This along with recent legal liberalisation, economic diversification and an expanding economy provides many investment opportunities for non-Qataris. Profits can be repatriated as can proceeds of sale and capital on liquidation. Major investment sectors are construction, oil and gas, education, and financial and legal services, with opportunities in ICT, sport, leisure and healthcare.

Incentives The government welcomes foreign participation in joint ventures, with incentives for investment: • A developed infrastructure and ICT network.

• Easy access to world markets with good sea and air connections, continuously being upgraded.

• Natural gas, electricity, water and petroleum at subsidised rates.

• Land for industrial development in the Industrial Area near Doha for a nominal rent of QAR1 per square metre per year.

• Loans available from Qatar Development Bank.

• Fixed parity between the Qatari riyal and US dollar (USD1 = QAR3.64).

• No customs duty on the import of plant machinery; exemption from export duty.

• Five-year renewable tax holidays (based on government approval).

• No income tax on the salaries of expatriates.

• Tax on the profits of foreign-owned stakes in Qatari companies is applied at a flat rate of 10%.

• Employment and immigration rules enable the import of skilled and unskilled labour.

Investment Regulations There are primarily two regulatory jurisdictions for foreign investors seeking to conduct commercial business in Qatar: the regulations of the State of Qatar, and the rules and regulations of the Qatar Financial Centre (discussed in more detail below). Qatar also recently introduced new free zones designed to encourage certain bespoke investment vehicles to bring their businesses to the region.

Non-Qatari investors may only invest in Qatar in accordance with Foreign Investment Law No 1 of 2019: • In January 2019 the Amir promulgated the new foreign investment law of 2019. According to the new law, foreign investors are permitted to hold more than 49% in commercial companies with special permission from the Minister of Commerce and Industry (MOCI) (subject to some prohibitions set out below). Under the former law such increased ownership was limited to those businesses operating in a specific set of sectors.

• Non-Qatari investors are prohibited from being appointed as commercial agents under Commercial Agencies Law No 8 of 2002, but the former prohibition preventing foreigners from investing in real estate businesses has been removed under the new Foreign Investment Law. Approval from the Council of Ministers is required for foreign investment in banking and insurance.

• Foreign capital is protected against expropriation (although the State may acquire assets for public benefit on a non-discriminatory basis, provided the full economic value is paid for the asset).

• Subject to Ministerial approval, a foreign company performing a specific contract in Qatar may set up a branch office if the project facilitates the performance of a public service or utility.

• A non-Qatari company operating in Qatar under a Qatari government concession to extract, exploit or manage the State's national resources is exempt from the Foreign Investment Law. In practice this covers all large oil and gas companies.

• A company formed by a non-Qatari entity with the government or a government entity ('Article 207 Company') may be subject to special rules and exemptions from the Commercial Companies Law No 11 of 2015.

• All international companies securing mega infrastructure development work must share at least 30% of the contract with local entities.

• Law No 7 of 1987 governs the practice of commercial activity by GCC citizens in Qatar, and was amended in April 2017 under Law No 6 of 2017. GCC citizens as individuals or legal personalities can practice retail and wholesale trade in Qatar. However, the GCC citizen engaging in the activity must be directly responsible for it. Those undertaking retail business must do so via direct sale to customers in a shop, and those in wholesale trading are required to import and export the goods. NB: the blockade against Qatar means that some aspects of this commercial activity is subject to change (as at date of going to print), and legal advice is recommended.

• The Cabinet approved a draft law regulating the partnership between the public and the private sector in April 2019, as per one of the following regulations: Allocation of land through a rental or usage licence, for development by the private sector; build-operate-transfer (BOT); build-transfer©

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marhaba.qa operate (BTO); build-own-operate-transfer (BOOT); operations and maintenance (OM); or any other form adopted by the Prime Minister, upon the proposal of the relevant minister. The Government or other administration may, on its own initiative or at the suggestion of the private sector, identify a project for its implementation through partnership.

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Choosing A Business Structure To conduct business in Qatar on a regular basis, foreign investors are required to establish or register a legal presence from the following options: • Incorporating as a company under the Commercial Companies Law which allows full access to Qatar's market and to work on an unlimited number of projects. A Qatari partner is required to own 51% of the capital of the company, except in the circumstances mentioned above. Various exemptions are available to attract foreign capital.

• Obtaining a licence for a branch office or trade representation office which does not require a Qatari partner. The licence for a branch is granted in respect of a specific project for a government client. The existence of the branch office is dependent on the duration of a particular project: once the project is completed, the branch office must close unless it has secured additional qualifying projects. Branch offices are only permitted to perform a specific contract and may not engage in general commercial activities with the larger local market. The branch will be fully taxable unless granted a special exemption.

Trade representation offices are only permitted to market goods and services; they are not permitted to engage in commercial activities.

• Under Law No 7 of 2017 companies in GCC states can now establish companies in Qatar, subject to having had a commercial registration in one of the GCC states for at least three years, and be fully owned and managed by a GCC citizen.

Refer to our preceding caveat regarding the blockade.

• Appointing a commercial agent means a nonQatari company does not establish a presence in Qatar; instead a 100% owned Qatari entity or Qatari national is appointed as an agent to market the relevant goods and services. Commercial agencies must be exclusive and registered in order to be afforded the protections provided under the Commercial Agents Law No 8 of 2002; non-registered distributorships are subject to the Commercial Law No 27 of 2006.

• There is a separate regime for establishing an entity in the Qatar Financial Centre (QFC). This

allows 100% foreign ownership and aims to attract international financial services companies and some professional support companies to invest in Qatar. The number of permitted activities in which a QFC firm may engage was recently increased to include a broader spectrum of investment options.

• The Qatar Science and Technology Park is currently Qatar's only free zone and allows companies to engage in research and development, again with full foreign ownership.

• At least one new free zone started accepting applications and international investors in 2019.

• Some upcoming free zones include: ° Um Alhoul, a 33.52 sq km site adjoining Hamad Port, south of Al Wakra – offers easy access to the water for maritime and logistics companies, and will be a gateway for imports and exports. A port and marine cluster, 'Marsa', will be able to support a wide range of marine businesses. ° Ras Bufontas, a 4.01 sq km site adjacent to Hamad International Airport – a proposed technology and manufacturing hub for businesses requiring international connectivity.

• The Cabinet has added some areas to the Free Zones Law, including Msheireb Downtown Doha.

• Under Ministerial Decision No 242 of 2016, the MOCI will grant licences for small businesses at home conducting certain commercial activities including sewing, events services, electronic services, business services, cosmetic activities and food activities. A single license is issued per activity, with an annual fee, and cannot involve direct sales to the public from the residence.

Decision No 163 of 2018 cancelled the requirement for signage at the house entrance.

Company Structures According to the Commercial Companies Law No 11 of 2015, the following structures are permitted: • Limited liability companies (LLCs) – subject to the Foreign Investment Law can now be established by a single person owning the entire share capital (previously the minimum number of shareholders was two). This replaces the single person company under the old companies law.

Shareholders can determine the share capital of an LLC (previously the minimum share capital was QAR200,000 divided into equal shares).

• Article 207 company – a shareholding company where the Qatari government, a government owned entity or a public corporation must own 51% of the shares, unless the Council of Ministers consents otherwise. Certain provisions of the Commercial Companies Law are excluded from the company’s Articles of Association.

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marhaba.qa • General partnership – joint partners administer the affairs of the company, and trustee partners contribute to the company's capital.

• Simple limited partnership – a local entity formed by two or more Qataris.

• Limited partnership with shares – formed by joint partners, liable for the debts, or trustee partners, whose liability is limited to the share value.

• Unincorporated joint venture – formed by two or more people pursuant to specific contractual arrangements. The unincorporated joint venture does not have a separate legal personality distinct from its partners'.

• Joint stock company (public or private) – the capital is divided into shares with a minimum of five shareholders. Permissible foreign share ownership depends on the type of company and is subject to Qatar Financial Markets Authority approval.

• Holding company – incorporated as a joint stock or limited liability company. The holding company must hold at least 51% of the shares in each of the companies under its control.

Commercial Registration (CR) Virtually all companies use a government liaison officer or facilitator to assist with establishment formalities. Under Qatar Commercial Registration Law No 25 of 2005, companies must be approved or registered by one or more of the following entities: Ministry of Commerce and Industry (MOCI); Qatar Chamber; Ministry of Municipality and Environment; Ministry of Interior; Importers' Register/Contractors' Register; and QFC Authority (where appropriate).

The following amendments were made under Law No 20 of 2014 in order to expedite registration procedures: • The MOCI must respond to the applicant's request for registration on the same day.

• Reasons must be given for rejected applications.

The Minister must accept or reject an appeal of the Ministry's decision within 15 days.

• A CR is now valid for one year, renewable 30 days before expiration.

• Incorporated branches must be in the exact name of the principal company, and are not considered separate legal entities.

• Amendments have also been made to penalties for those operating commercial premises without a CR, misusing the CR, and providing false/ wrong documents.

Export and Import Exports According to the Planning and Statistics Authority (PSA), Qatar’s total exports (including exports of domestic goods and re-exports) in Q3 2019 amounted to QAR63.9 bn, for such things as mineral fuels, lubricants, fertilisers, and steel, with Asia the principal destination. There are no duties on exports.

Imports According to PSA, imports in Q3 2019 totalled QAR25.7 bn in 2017, comprising machinery and transport equipment, food, and chemicals, mainly from Asia.

Import tariffs Importers of goods into Qatar must sign up to the Importers' Register and be approved by Qatar Chamber (QC). Customs duty and legalisation fees are levied on all commercial shipments, irrespective of its value.

All goods imported into Qatar are subject to customs duties, based on a percentage value of goods (usually 5%), or on a 'per unit' basis.

The value of goods is calculated according to the Customs and Ports Law. Customs duty tariffs fall under these categories: • Personal effects and household items, imports of charitable organisations and returned goods, diplomatic and military exemptions, merchandise for ‘free zones’ and duty-free shops – exempt.

Goods in transit may be accepted at designated stations without duty.

• General cargo, eg clothing, perfumes, cars, electronic appliances and devices – 5%.

• Steel – 20%.

• Urea and ammonia – 30%.

• Cigarettes, tobacco and its derivatives – 100% or QR1,000 per 10,000 cigarettes, whichever is higher.

Law No 25 of 2018 on Excise Tax came into effect 1 January 2019. All businesses that import, produce or store/stockpile excise goods must comply with the requirements stipulated under the law. The following goods are subject to Excise Tax: • Tobacco products – 100%.

• Carbonated drinks (non-flavoured aerated water excluded) – 50%.

• Energy drinks – 100%.

• Special goods – 100%.

In accordance with the Gulf Cooperation Council (GCC) Customs Union, more than 600 goods exempted from customs duties, as well as exemptions granted to certain bodies and persons under Customs Law No 40 of 2004. There are fees for the attestation of the Certificate of Origin ©

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marhaba.qa (from QC) and a tariff for the attestation of the Commercial Invoice, based on shipment value.

of the profits due to a Qatari or GCC partner is exempt from tax.

Qatar implemented the World ATA Carnet Council in August 2018, joining 77 other countries that use the system, an international customs document permitting the duty-free and tax-free temporary import and export of goods for up to one year. The system is being implemented by QC alongside ICC Qatar and the General Authority of Customs (GAC).

Tax exemption applies for certain activities, and companies listed on the Qatar Exchange are also exempt, but companies must pay a 2.5% contribution to charitable and cultural activities.

Taxpayers must register with the Public Revenue and Taxes Department. Auditors must be a firm based in Qatar and registered with the MOCI or approved by the QFC.

Import regulations All commercial shipments are subject to examination by GAC prior to clearance.

The Qatar Clearance Single Window (Al Nadeeb) is a one-stop e-government system facilitating international trade, with interchange between GAC and other stakeholders. 136, ecustoms.gov.qa

In January 2016 officials from GCC member states agreed to introduce VAT, tentatively set for early 2018. The Council of Ministers approved the Qatar Value Added Tax (VAT) Law and Excise Tax Law and Executive Regulations in May 2017, based on the unified GCC agreement. To date, only the Excise Tax has been implemented, although VAT is expected to be imposed in 2020.

New regulations were introduced in 2013 to prevent fake products from entering the market.

All general goods must have non-removable marking of their place of manufacture to be eligible for customs clearance. This applies to both air and sea freight. The import of vehicle tyres, spare parts and electrical home appliances has to be based on a 'certificate of conformity' issued by the authority concerned. All general cargo for customs clearance must be backed by an original commercial invoice on the shipper’s letterhead, with stamp and signature. They also require attestation by QC. The packing list of each consignment must have the number of pieces, weight and volume.

GAC requires all importers to obtain an HS Code, an international system for classifying traded products. This must be linked to the trader's Commercial Registration and import licence.

There are no restrictions on bringing personal effects into Qatar. Banned imports include alcohol, pork and e-cigarettes. The import of pets is allowed, however certain breeds are not permitted. NB: the blockade against Qatar means that goods from boycotting countries are prohibited (as at date of going to print).

Points of entry Imports and exports are transitted via Hamad International Airport, Hamad Port, Doha Port, Mesaieed Port, Ras Laffan and the Salwa Overland Terminal.

Taxation There are no personal taxes or statutory deductions from salaries in Qatar. Under Law No 24 of 2018, companies must pay tax on all profits at a flat rate of 10%. This is on all corporate income from sources in Qatar, whether the entity has a physical presence in Qatar or not. The share

Intellectual Property Under Law No 9 of 2002, a trademark registration is valid for 10 years from the date of filing the application, renewable for further consecutive periods of 10 years. The court may be ordered to cancel a trademark registration if the owner fails to use it in Qatar within five consecutive years from the date of the registration.

Copyright Law No 7 of 2002 gives protection to authors of original literary and artistic works.

Protected works include books, lectures, musical works, photographic works and computer software.

The economic rights of the author/owner are protected during the lifetime of the author, and for 50 years after his death.

Patent Law No 30 of 2006 provides for the registration of inventions and foreign patents at the Qatar Patent Office, and implementing regulations were issued by the Minister of Commerce and Industry under Decision No 153 of 2018.

Qatar announced its accession to the Patent Cooperation Treaty in 2011. The Law of Trademarks in the GCC Countries was promulgated under Law No 7 of 2014. The same year Qatar signed a cooperation agreement with the World Intellectual Property Organisation (WIPO) to jointly improve services. There is an electronic trademark registration service via the MOCI website to expedite submissions and preserve IP rights.

Regulatory Bodies and Government-owned Entities Ministry of Commerce and Industry (MOCI) A4 Creates commercial policy for both private and public sectors in order to boost regional and

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marhaba.qa international trade relations and support the development of businesses across the country.

This should be the first stop for information when opening a company and investing in Qatar.

The MOCI_QATAR app is one of the ministry's e-services to speed up the delivery of services, and promote trade and investment in Qatar.

Invest In Qatar is a useful tool for local and foreign investors and investment opportunities. moci.gov.qa, invest.gov.qa Ministry of Finance (MOF) C4 Prepares the State budget and proposes objectives and tools of financial policy in line with Qatar National Vision 2030. The General Authority of Customs monitors the import of all goods, and the e-services of the Government Procurement Portal include tenders and company registration. mof.gov.qa, customs.gov.qa, monaqasat.mof.gov.qa Qatar Chamber (QC) D4 Provides a wide range of services and support to local and international businesses, including certificates of origin (COO) for import/export and ATA Carnet, acting as liaison for international business delegations, and providing training courses. QC services are also available to QFC-licensed firms. The Qatar International Center for Conciliation & Arbitration (QICCA) was established in 2006 as part of QC to act as an efficient and swift mechanism to settle disputes between Qatari enterprises, or between national companies and foreign counterparts. qatarchamber.com, qicca.org Qatar Development Bank (QDB) D4 The bank plays an active role in the economic and industrial development of Qatar in the private sector by promoting and financing SMEs. The bank is 100% owned by the State of Qatar and provides a wide range of financial and advisory products, such as funding, incubation, and support services. qdb.qa Qatar Financial Markets Authority (QFMA) C4 An independent regulatory authority supervising the financial markets and firms authorised to conduct activities related to securities in or from Qatar, and empowered to exercise regulatory oversight and enforcement over the capital markets. QFMA was granted full membership of the International Organisation of Securities Commissions in 2013. New legislation in 2014 modernised the legal infrastructure, while listing rules and a governance code for funds were issued in 2019. qfma.org.qa Qatar Investment Authority (QIA) A4 The country's sovereign wealth fund is a major investor in Qatar, owning 50% of Qatar National Bank, 55% of Ooredoo, and 100% of Katara Hospitality, and is a key shareholder in three local Islamic

banks. Subsidiaries include: Qatar Holding, a global investment house established in 2006 and licensed by the Qatar Financial Centre Authority; Qatari Diar Real Estate Investment Company, which oversees the Lusail City development among other projects; and Qatar Sports Investments, which owns football club Paris Saint-Germain.

QIA has approximately USD320 bn in assets, according to the Sovereign Wealth Fund Institute.

In May 2016 QIA was restructured – USD100 bn of investments in local companies were placed in a new unit, abandoning the Qatar Holding name. The new internal division, Qatar Investments, is known as QIA internationally.

QIA has reduced its direct holdings in Credit Suisse Group AG, Rosneft PJSC and Tiffany & Co, while making new investments in retail properties in Fifth Avenue and Times Square in New York City with Crown Acquisitions, and in Los Angeles with Douglas Emmett. The fund aims to invest USD45 bn in the US. QIA is also committed to investing GBP5 bn in the UK, and a deal has been signed with AccorHotels to create an investment fund of more than USD1 bn dedicated to hospitality in subSaharan African countries. Following five years of redevelopment, 52 Champs-Elysées in Paris was relaunched in March 2019, home of the famous Galeries Lafayette.

Domestically, USD40 billion was injected into the economy in the first two months of the blockade, according to Moody’s Investors Service. qia.qa Qatar Investments Portfolio (unconfirmed): 52 Champs-Elysées, Adecoagro, Agricultural Bank of China, Asia Square Tower 1 (Singapore), Banyan Tree, Barclays PLC, Barwa Bank, Brookfield Property Partners, Canary Wharf Group, Claridge's/The Berkeley/The Connaught hotels, Credit Suisse Group AG, Deutsche Bank AG, El Corte Ingles SA, Empire State Realty Trust, Fahrenheit, Glencore PLC, Grupo Santander Brasil, Harrods, Hassad Food, Heathrow Airport Holdings, Hochtief, Iberdrola SA, J Sainsbury PLC, Kahramaa, Lagardère, Le Brantano!, Le Tanneur, Lifestyle International Holdings Ltd, London Shard Tower, London Stock Exchange, LVMH, Masraf Al Rayan, Mowasalat, National Grid PLC, One Ocean Port Vell, Ooredoo, Oryx Midstream Services (Oryx), Pavilion, Pulkovo Airport (St Petersburg), Qatar Exchange, Qatar Islamic Bank, Qatar International Islamic Bank, Qatar National Bank, Rosneft PJSC, Royal Dutch Shell, Siemens, Societe Fonciere Lyonnaise SA, The Bürgenstock Selection, Tiffany & Co, Total SA, Turkuvaz, Valentino Fashion Group SpA, Vente-Privée, Vivendi, Volkswagen AG, Xstrata PLC. ©

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Qatari Diar Real Estate Investment Company A4 Projects include: Lusail City (Qatar); Chelsea Barracks and East Village (UK); and City Center DC (US). The Qatar Railways Development Company (Qatar Rail) was formed to oversee the Qatar Rail Development Programme: the Doha Metro, the Long Distance Rail, and the Lusail Tram. qataridiar.com Qatar Science and Technology Park (QSTP) C2 Since 2009 QSTP has been a facility for applied research and commercialised technology in Energy, Environment, Health Sciences, and ICT. This free zone at Education City allows foreign companies to set up 100%-owned businesses in Qatar free of tax and duties. Members must have technology development (eg applied research, development and testing of a product or service, or technology training) as their main activity. qstp.org.qa

Qatar Financial Centre (QFC) The QFC C4 was set up in 2005 to attract international financial institutions and firms to establish business operations in a 'best-in-class' international environment. There are two independent bodies: the QFC Authority (QFCA) and the QFC Regulatory Authority (QFCRA). To operate in or from the QFC, a firm needs to be incorporated or registered by the QFC Companies Registration Office, licensed by the QFCA, and for regulated activities, authorised by the QFCRA. Advantages of establishment in the QFC include: • Firms in the QFC are subject to a separate legal, regulatory, tax and business environment.

• Allows 100% foreign ownership and 100% repatriation of profits.

• Only 10% corporate tax on locally sourced profits.

There are currently more than 650 local and international companies in the QFC, comprising investment and private banking, (re)insurance and asset management firms (each of which is regulated); and consultancy service providers, law firms and financial services recruitment firms (which are non-regulated).

An enhanced registration process was introduced in August 2017 with just four steps, allowing complete registration applications to be reviewed and processed within five business days. Firms are given a dedicated relationship manager and offered support in setting up. qfc.com.qa The QFCA is the commercial arm of the QFC, responsible for leading the expansion of Qatar’s financial services sector and for developing relationships with the regional and global financial

community. The QFCA's strategy focuses on the creation of a global business hub for three core markets – Asset Management, Reinsurance and Captive Insurance.

The QFC announced in February 2019 its new strategy for achieving its targets for 2022, which includes the registration of 1,000 firms and a focus on specific service industries and new emerging markets with a combined value of over USD2.1 tn. The QFC has an attractive incentives programme to tempt multinational companies to Qatar by offering free offices, highly-competitive tax incentives, and seed capital to cover five years of operating expenses in return for a 10-year commitment. qfc.com.qa The QFCRA is the independent regulatory body of the QFC, overseeing all firms conducting financial services in or from the QFC, as a combined banking, insurance and markets regulator. In 2012, the QCB Governor took over the chairmanship of QFCRA, as part of a plan to establish a single financial regime, comprising QFCRA, QFMA, QE, QCB, and the Supreme Judicial Council. qfcra.com The Qatar International Court and Dispute Resolution Centre (QICDRC) consists of the QFC Civil and Commercial Court (First Instance and Appellate Divisions) and the QFC Regulatory Tribunal. The Court has consensual jurisdiction to hear disputes between parties from anywhere around the world and mandatory jurisdiction to hear disputes between entities registered in the QFC. There is a purpose built Alternative Dispute Resolution (ADR) centre. qicdrc.com.qa

Qatar Exchange (QE) QE C4 was created in 2009 between Qatar Holding (88%) and NYSE Euronext (12%) as the successor to Doha Securities Market. Qatar Holding purchased NYSE Euronext's stake in 2013. In 2012, regulatory authority passed to Qatar Central Bank from Qatar Financial Markets Authority, and in 2014 Qatar was added to the Morgan Stanley Capital International Emerging Market Index. It was upgraded in September 2016 from Frontier to Secondary Emerging Market by FTSE Russell.

QE began trading in treasury bills in 2011, and in 2012 the QE Venture Market for SMEs was launched, after the QFMA adopted new listing and initial public offerings (IPO) rules in the secondary market. As at October 2019 there are 46 listed companies and 9 brokerage firms.

All traders must use a stockbroker and register at the Qatar Central Securities Depository.

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marhaba.qa Foreigners are not permitted access to the primary market, so cannot take part in IPOs, and restrictions may apply to the number of floated shares foreigners can trade in. qe.com.qa Qatar Central Securities Depository (QCSD) Established by QCB and licensed by QFMA to provide safekeeping, clearing and settlement of securities and other financial instruments listed on the Qatar Exchange. qcsd.com.qa

Real Estate

The law offers an atttractive new investment model to Qatar, offering 100% guaranteed return on investment in these areas.

The real estate non-Qatari individuals and companies are allowed to invest in includes offices, shops, units and villas in residential complexes, and real estate development of land in specified areas, and is not limited to apartments and residential units.

Leasehold developments Non-Qataris can use real estate property for 99 years in 16 designated areas. The areas are: • Msheireb (Area 13) • Fereej Abdelaziz (14) • Doha Al Jadeed (15) • New Al Ghanim (16) • Al Refaa and Old Al Hitmi (17) • Aslata (18) • Fereej Bin Mahmoud (22 and 23) • Rawdat Al Khail (24) • Mansoura and Fereej Bin Dirham (25) • Najma (26) • Umm Ghuwailina (27) • Al Khulaifat (28) • Al Sadd (38) • Al Mirqab Al Jadeed and Fereej Al Nasr (39) • Doha International Airport area (48)

Freehold developments The number of areas non-Qataris can own and use

All of these areas can be found on the map of Greater Doha in the Discovering Qatar section. m

Investment and Trade

Under Law No 16 of 2018 on the regulation of non-Qatari ownership and utilisation of real estate, implemented in March 2019, non-Qataris may own and use properties in Qatar 'in many areas according to conditions, regulations and procedures, which shall be determined by a decision of the Cabinet based on the proposal of the Committee for the Regulation of Ownership and Use of Non-Qatari Property'.

freehold property has been increased from three to 10 designated areas: • Al Qassar (administrative area 60) • Al Dafna (administrative area 61) • Onaiza (administrative area 63) • West Bay (66) • The Pearl‑Qatar (66) • Rawdat Al Jahaniyah (investment area) • Lusail (69) • Al Khraij (69) • Jabal Theyleeb (69) • Al Khor Resort (74)

Developers and Real Estate Agents Selling Property and Land (for letting agents see Living in Qatar in the Discovering Qatar section ) Cushman & Wakefield

4483 7388

cushmanwakefield.qa

Direct Real Estate

4442 1472

directqatar.com

Just Real Estate

4491 3300

jre.com.qa

New Methods

4410 8000

new-methods.com

United Development Company

4409 5155

udcqatar.com

And Finally ... Some Helpful Tips on Business Etiquette Doing business in Qatar depends just as much on personal relationships as on the quality of the company or service. Networking and exchanging business cards is important. Men should wear suits or smart/business casual, and women should cover elbows and knees. Handshaking is common but when meeting Arab people of the opposite sex it is best to wait for them to initiate a handshake.

Bear in mind a few other cultural nuances: • Do not rely too much on email • Oral commitments at face‑to‑face meetings may be considered binding, while written agreements may not • Appointments should be reconfirmed on the day

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• While English is widely spoken, the language of government is Arabic • Sit and talk with your host on general matters before approaching business ©

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FEATURE

The Court System in Qatar

By Sarah Palmer Qatar's court system has introduced new guidelines for judges and law students, as well as adopted further online services in line with the country's digital revolution.

T

he Supreme Judiciary Council (SJC) launched a new Code of Judicial Conduct in February, along with a new visual identity, on the sidelines of the second high-level meeting of the Global Judicial Integrity Network, which was held in Doha with the participation of many heads of international judicial councils.

The code has been issued to enhance the independence, impartiality, and competence of judges and their associates, the effectiveness of their procedures, and to establish the rule of law in a manner that enhances the confidence of litigants in the judiciary and its role in establishing completed justice with impartiality.

According to HE the President of the Supreme Judiciary Council and President of the Court of Cassation Dr Hassan Lahdan Saqr Al Mohannadi, 'the SJC is working to develop the judicial sector in the country in line with the rational vision of the Amir, HH Sheikh Tamim bin Hamad Al Thani in achieving prompt justice.'

The code has been designed with the latest global developments and domestic legislation in mind as well as the Amir's vision. It will set guiding principles and act as a reference for judges, as well as used by law students to enhance judicial integrity and can be referred to by members of the public.

The new code derives its basic reference principles from the provisions of Sharia (Islamic) law, the Permanent Constitution of the State of Qatar, the moral values of society, the law, values and traditions of the judiciary, and associated relevant international treaties and agreements.

This is supplemented with the new visual identity of the SJC, which reflects the basic principles upon which Qatar built its judicial system and the respect of the judiciary in achieving justice.

About the Supreme Judiciary Council The Judicial Authority has been established and given its powers under the Permanent Constitution of the State of Qatar, and acts independently of all other authorities. It has jurisdiction over legal matters, to achieve justice and guarantee the rights and liberties of society.

The rule of law constitutes the basis of government in Qatar. Article 60 of the Permanent Constitution guarantees the judiciary procedural and structural independence that is unique and highly developed in accordance with the standards of modern state institutions. Article 135 of the Constitution asserts the right for all people to resort to the judiciary system and the courts.

The judiciary has general jurisdiction over criminal, civil, commercial, family, inheritance, administrative and other disputes, except sovereign acts and nationality matters. As per Article 130 of the Constitution, judicial authority is independent and vested in courts of different types and degrees.

Judgments are issued in the name of HH the Amir.

The appointment of judges in Qatar is based on clear criteria that adhere to the principles of integrity and justice. A judge's ethics and behaviour must be applied in both their working and personal life.

Judges are independent and they are only subject to law when exercising their judicial functions. There can be no interference whatsoever permitted with court proceedings and the course of justice, as per Article 131 of the Constitution. The Supreme Judiciary Council supervises the functioning of the courts of law and the achievement of independence of the judiciary (Article 137).

The Judicial Authority Law No 10 of 2003 and its various amendments have brought about a number of developments in Qatar's judicial sector. Taking effect in October 2004, the 2003 law unified the country's legal system.

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Court of Appeal: Responsible for deciding appeals filed against the judgments issued by the lower courts, and comprises three members.

Court of Cassation: This was introduced to Qatar for the first time under Judiciary Authority Law No 10 of 2003 and is the highest court in the country's judicial system. The court has five members and decides upon the appeals filed against the judgment issued from the Court of Appeal. The Court of Cassation only rules on matters of law and does not re-examine the merits of a case before it. The Court of Cassation may either issue a ruling or remand the case back to a lower court. Rulings delivered by the Court of Cassation are final and cannot be challenged.

The Supreme Judiciary Council Online Services

The Council Structure The SJC oversees three courts in Qatar: Court of First Instance: Consists of the Criminal Court, the Civil Court, the Family Court, and the Execution Court. These are individual courts.

Administrative matters are decided by the Administrative Circuit (not a separate court) of the Court of First Instance.

The court has a president and a number of chairs and judges. It has circuits to consider different cases: Hudod (limits); Qisas (retaliation in kind); Diya (compensation); criminal, civil and commercial matters; personal status matters; inheritance; administrative disputes; and more. The Execution Court enforces judgments retendered by the other courts and circuits.

There are a number of e-services available to businesses in several of the courts, and this will be implemented across the whole legal system by the end of 2020. Currently, e-service users can perform many legal procedures without having to visit the court in question. This ease of facilitating services, such as establishing a business, is designed to attract more foreign investment.

It is also part of Qatar Government Strategy 2020 under the Ministry of Transport and Communications (MoTC), which states that all individuals and businesses will benefit from Qatar's more open and connected government. SJC signed an agreement with MoTC in 2017 and targets more efficient litigation procedures and reduced waiting times.

At the moment, only judgments of the Court of Cassation are published and publicly available.

To learn more, visit sjc.gov.qa/en, call 109 m

SJC issues a resolution to form these circuits, and judgments are issued by three members. The Civil Court consists of the Plenary Courts (three judges) which preside over cases in which the claim is more than QAR500,000, and the Partial Courts (single judge) which deal with cases in which the claim amount is below this threshold. Administrative matters are decided by the Administrative Circuit with three judges presiding.

However, under Article 12 of the Judicial Authority Law the SJC can form one or more circuits with just one judge to issue a decision – a District Court. Civil and commercial lawsuits and dispute cases are also heard here. Under Family Law No 23 of 2006 and SJC Resolution No 23 of 2006, the Family Courts at the Court of First Instance can decide upon family and inheritance disputes. The Criminal Court has jurisdiction over crimes and Hudod, Qisas and Diya, as well as cases from Public Prosecution, at the (usually) single-judge Misdemeanour Court. ©

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FEATURE

New Rules for the Stock Exchange

By Sarah Palmer New rules and regulations by the Qatar Financial Markets Authority and Qatar Stock Exchange are further steps by the country to encourage foreign investment.

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he Qatar Financial Markets Authority (QFMA) announced earlier this year a slew of new guidelines, including the issuance of Governance Code for Listed Funds, and Listing Rules for Funds' Units listed in the Qatar Stock Exchange (QSE).

support the sustainability of our listed companies in the years and decades ahead, especially in light of the current geopolitical instability in the region. The rules reflect best-practice and should in any case be standard for listed companies in today’s regulatory capital markets’ environment.'

This part of the QFMA's ongoing development of its regulations, which aims to enhance the attractiveness of the investment environment of the capital market, as well as to increase the diversity of the financial products listed in the QSE.

The rules will also achieve quality investor relations thereby improving market accessibility, and support the development of successful capital markets.

Under the new IR regime, it is now mandatory for all listed companies to have an IR officer, as well as a dedicated section on IR on their website.

According to QFMA, 'It will continue to strengthen its regulations to meet the investors' needs with adopting the best international practices related to investment funds and relevant governance. This is a significant step for QFMA while exerting efforts to develop the Qatari capital market, and strengthen the elements that attract local and international funds for listing in QSE. The revision and update of Listing Rules & Governance Code would provide a clear framework for local and international fund management companies to be listed in QSE and encourage the development of asset management in the State of Qatar.'

Qatar Stock Exchange later in the year introduced a mandatory rule-based investor relations (IR) regime, effective from 1 October 2019. This is part of QSE's eagerness to promote the adoption of international best practice in IR among its listed companies, to enhance its attractiveness to global investors.

QSE CEO Rashid bin Ali AL Mansoori told the 10th annual IR conference in September that 'As QSE is Qatar's national stock exchange, we seek to

Under QSE’s commitment to create effective communication channels and improve ongoing communication between both the listed companies and investors, QFMA has approved a set of minimum requirements for the IR Rules – these will become part of QSE's Rulebook.

A synopsis of recent updates by QFMA QFMA's Board Decision No 1 of 2019 Listing Rules for Funds’ Units Repeals two previous Board Decisions, Nos 1 of 2012 and 2015. Outlines the fund capital, the fund's net assets value, requirements of the fund manager, and when and how the QFMA may suspend or cancel a fund for non-compliance.

QFMA's Board Decision No 2 of 2019 Governance Code for Listed Funds Does not repeal any earlier Board Decisions by the QFMA. However, it does state that all the funds implement governance principles set out in the decision, namely justice, equality among stakeholders without any type of discrimination, and transparency and timely disclosure to the authority and stakeholders so

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that they may make decisions and undertake their duties properly. The principles also include ensuring the public interest of the fund over any personal interest.

QFMA's Board Decision No 3 of 2019 Amendment of Market Maker Rules Amends some articles of Decision No 4 of 2017, regarding the definition of eligible securities and the role of the market maker.

QFMA's Board Decision No 4 of 2019 Margin Trading Rules Repeals Board Decision No 6 of 2014. Margin trading is 'a transaction, whereby the company pays a percentage of the securities' market value purchased for its client pursuant to the Agreement governing the relation between them'.

The Decision has added some requirements to the Margin Trading Agreement, revised the calculation of the Maintenance Margin percentage, and added a number of further obligations on the margin trading company (who is a financial services company authorised by QFMA to conduct business as per the Financial Services Rulebook).

QFMA's Board Decision No 5 of 2019 Financial Services Rulebook Repeals Board Decision No 5 of 2009. The Decision extends the permitted financial activities, and the broker must be a member of the financial markets or depository under one of three classifications. A license to conduct financial services is granted to Qatari companies only and no member of senior management should have been convicted during the three years preceding the licence submission date, or have been declared bankrupt unless rehabilitated. The Decision also sets out the minimum required paid up capital of the licence applicant, the licence period and document requirements, and the rights and obligations of the company, including any branches and agents. The company must commence a licensed activity within six months of the date the licence was granted.

Why rules and reviews are important for Qatar's foreign investment strategy There has been a joint collaboration between the QSE, QFMA and the listed companies over the last few years, to ensure that disclosure and transparency are developed through an increasing focus on IR. This is especially important after Qatar was upgraded to emerging market status by international index compiler MSCI (Morgan Stanley Capital International).

Real Estate has been added to Mid Cap from Large Cap, and Al Meera has been added to Small Caps from Mid Cap. Salam International and Qatar Oman Investment Company have been added to FTSE Micro Cap Index. Islamic Holding Group has been deleted from FTSE Micro Cap Index, and Qatar National Navigation and Transport has been deleted from FTSE Micro Cap Index.

Being subject to periodic index reviews, which in turn lead to companies’ reclassifications, additions and deletions, by international index providers are used by international investors and portfolio managers.

As a result of the periodic review process, the reclassified, added or deleted companies usually witness significant activity on their shares.

Qatar Stock Exchange's current strategy is to increase investments from China, Hong Kong, Singapore and other Asian countries in order to further diversify its investor base – according to its 2018 Annual Report, it has also become a focus of interest for many foreign investment portfolios from the US and Europe. This is in part due to new legislation which has seen an increase in the foreign ownership limit (FOL), now set at 49%.

Many companies have already enhanced FOL up to 49%; consequently the Qatar Central Securities Depository (QCSD) has started amending the FOL in Industries Qatar, Gulf International Services, Mesaieed Petrochemical Holding, Qatar Electricity and Water, Qatar Islamic Bank, Barwa, Qatari Investors Group Qatar National Bank, and WOQOD. The foreign ownership limit increase and the new guidelines issued by QFMA have further strengthened the position of Qatari companies listed on the MSCI emerging markets index and the FTSE Russell secondary emerging market index. m Note: QFMA Board Decision information has been extracted from the QFMA website – full details of all their regulations can be found at qfma.org.qa

In September, following the FTSE Semi-Annual Index Review, FTSE Russell reclassified shares listed on the QSE. A company’s inclusion and reclassification in global indices is subject to various criteria, such as the size of the company's investable capital and market capitalisation, liquidity and turnover rates.

Consequently, Qatar Fuel has been reclassified from FTSE Mid Cap Index to Large Cap Index, Barwa

Photo credit: Qatar Exchange ©

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FEATURE

SMEs Defined

Photo credit: GWC Logistics

By Sarah Palmer A recent decision by the Ministry of Commerce and Industry has provided a unified definition of small and medium enterprises in the State of Qatar.

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atar has a number of policies and initiatives in place that support and encourage the growth of entrepreneurship and in particular small and medium-sized enterprises (SMEs). This action has been taken to encourage sustainable development and economic diversification, as the country looks to move away from its reliance on hydrocarbons as a source of revenue. Despite regional and global political and financial uncertainties, this sector is showing great progress.

Under the decision, SMEs have been classified into three categories:

The sector is expected to see further growth in the next couple of years, with the 2022 FIFA World Cup QatarTM approaching – in fact, investment is expected to reach USD5 bn. This gives emerging companies and entrepreneurs the chance to participate in this global event.

The unified definition of SMEs is limited to autonomous private and profit-seeking enterprises.

Excluded are ministries, public bodies and institutions, diplomatic bodies, public welfare institutions and establishments owned by public bodies, and corporations and companies in which the state is a shareholder.

The Ministry of Commerce and Industry (MOCI) recently issued a set of unified definitions for SMEs in the country, opening up the sector to investment funds and venture capital. This move could greatly benefit the SME sector and further enhance economic growth. It is in line with the economic development pillar of Qatar National Vision 2030.

Ministerial Decision No 250 of 2018 on the unified definition of SMEs aligns with the State's keen interest in developing the private sector, particularly small enterprises. The decision was drawn up in conjunction with Qatar Development Bank (QDB) after consultation with a number of stakeholders.

The decision classifies enterprises according to headcount and annual revenues; SMEs are companies established under Qatari law, with not more than 250 employees and annual revenues not exceeding QAR100 mn.

• Micro-sized entities with not more than 10 employees and annual turnover under QAR1 mn.

• Small-sized companies with a headcount of 11–50 employees and a turnover of more than QAR1 mn but less than QAR20 mn.

• Medium-sized enterprises with a headcount of 51–250 employees and a turnover of more than QAR20 mn but less than QAR100 mn.

As per the decision, a private, profit-seeking entity shall not be considered a mixed enterprise. It shall maintain an independent status within the scope of the definition set out in the preceding article of the decision, even if the percentage of equities or voting powers of investors such as public investment companies, venture capital companies, business enterprise financiers, universities and non-profit research centres, and institutional investors (including regional development funds) is up to 50%.

The decision also stipulates that MOCI shall coordinate and cooperate with all relevant authorities to introduce any amendments to this definition, by reviewing the outcome of applying this definition, and evaluating its suitability to the needs of SMEs in the country and its compatibility with the State's strategic plans, eg Qatar National Vision 2030.

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Speaking to press at the launch of the new definition guidelines, Saud Abdullah Al Attiyah, director of Economic Policies and Research Department at MOCI, stated that adopting the same definition for SMEs in Qatar will lead to create a clear framework for development of the sector, which will support the establishment of evidence-based decisions.

There is already a common definition for SMEs in the banking sector, but for the first time this will be one definition for the whole country, aligned with global best practices and Qatar's vision to create a diversified economy.F m

A full list of investment regulations and company structures can be found in Investment and Trade in this section.

More information is also available from the Ministry of Commerce and Industry at moci.gov.qa, for investment opportunities visit invest.gov.qa

How local entities are supporting the SME market The Qatar Stock Exchange’s Venture Market is excluded from the definition of SMEs when applying the rules of listing to companies. However, the Venture Market may decide to use it as a guiding definition.

The QE Venture Market is dedicated to SMEs who have a minimal track record and a higher risk profile but who are growing and need access to capital. The development of the Venture Market is specifically designed to fit within the state's overall desire to support SMEs as part of Qatar National Vision 2030.

Eventually those companies on the Venture Market should be able to grow and graduate to the Main Market.

Companies on the QE Venture Market trade on the same infrastructure and benefit from the same regulatory safeguards as those on the Main Market.

However, it is easily identifiable as a separate and dedicated marketplace. For more details visit qe.com.qa Meanwhile, Qatar Development Bank (QDB), who was involved in the development of Ministerial Decision No 250 of 2018, plays an important role in empowering entrepreneurs, with a package of initiatives and programmes. Small companies in the country are launched through different channels, and are now contributing to the economy of the country, some of which have reached the stage of foreign exportation.

Their SME Excellence List recognises and celebrates the top performing SMEs in Qatar via defined eligibility and evaluation criteria. In 2018, QDB gave QAR8 bn in financial support to Qatari companies, including SMEs. For more information on the services available to SMEs, visit qdb.qa ©

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