To succeed in Qatar, UK businesses must be prepared and able to invest the necessary time, money and effort. The process of establishing a presence in the market can take many months. Identifying suitable partners, agents or distributors can be time consuming.
UK businesses need to take a long-term perspective and think in terms of developing partnerships. Businesses that demonstrate a willingness to invest in Qatar and a real commitment to the country are appreciated.
UK businesses should do their research before coming to Qatar. They should find out about the organisations and people they are likely to see, try to understand what their objectives are and what they might be looking for. If UK businesses are visiting for the first time, they should try to talk to someone who has been here and can provide an insight about what to expect. Above all, it is important to understand that there are many aspects of doing business in Qatar which differ from the UK - what is best practice at home may not be best practice in Qatar.
UKTI's team in Qatar can provide a range of services to UK businesses including market research, lists of contacts, programme arranging, help with events and publicity
There are challenges for UK companies in operating in Qatar. Companies must be prepared to invest the necessary time, money and effort to maximise opportunities for success. The process of registering with local authorities can be time consuming.
The Qatari Ministry of Business & Trade is keen to implement changes; for example the recent reduction in the rate of tax paid by foreign companies to a flat rate of 10%.
A relatively small pool of potential agents or distributors reinforces the need to carefully research and assess the market before entering into any kind of commercial agreement.
Although Qatar has started to offer free zone type incentives, such as the Qatar Financial Centre and Education City, free zones as evidenced in other Gulf States do not exist. Very specific criteria apply to the kinds of activities that companies must undertake to qualify for incentives which is part of Qatar's wider strategy to attract only those industries and sectors which complement or add value to existing businesses.
Legislation & Local Regulations
Companies are always advised to seek legal/taxation advice before entering into a joint venture, agency agreement or similar type of partnership. A list of local lawyers is available on request from the UKTI team in Doha.
Foreign investors may only invest in Qatar in accordance with the provisions of the Foreign Investment Law. However, foreign investors are welcomed in Qatar and various incentives are available to attract foreign capital. These include tax breaks and exemptions from customs duty. Foreign business investors may invest in all parts of the national economy excluding commercial agencies and (broadly speaking) real estate. Approval from the Council of Ministers is required for foreign investment in banking or insurance.
Foreign investment is generally limited to 49% of the capital for most business activities, with a Qatari partner(s) holding at least 51%.
The Qatar Investment Promotion Department's website, www.investinqatar.com.qa contains details of incentives to encourage foreign investment in Qatar. It also provides information on the procedures for company establishment in Qatar.
Qatari companies are exempt from tax and there is no personal income tax for either nationals or expatriates. However, the rules are different for foreign companies, and any business activity carried out in Qatar is subject to corporate income tax. This includes any services or consultancy contracts within the state as well as any gains on property.
Until 2009 the corporate income tax system was based on a banded structure depending on income, with rates applied from 0% - 35%. However, a new tax law was approved by the government in 2009, and came into force from 1st January 2010. This introduces a new flat rate of taxation of 10% on company profits for all non-Qatari recipients (which does not include GCC individuals and entities). The new law also focuses on other key areas of taxation, including withholding tax, and transfer pricing and provides for a Committee to be established, which will evaluate applications for exempting certain projects carried out by foreign companies. UK companies are strongly advised to seek professional advice on tax matters.
The UK and Qatar signed a Double Taxation Agreement in June 2009.
A 'Qatarization' initiative is in place which aims to increase the number of Qatari nationals in the private sector in particular. Employers should be aware of the requirement to pay end of service benefits to employees. Companies will need to obtain residence and work permits for their expatriate staff. All expatriate employees must be sponsored by their employer who is responsible for them while they are in Qatar.
Getting Paid - Terms of Payment
Irrevocable letters of credit (L/C) and cash against deposit (CAD) are the most common forms of payment. Further information on payment terms is available from the Simpler Trade Procedures Board (SITPRO) website at www.sitpro.org.uk.
Responding to Tenders
Most Government purchases over QR50,000 (approx £9,000) are conducted through a tendering process stipulated by the Qatar Central Tender Committee (www.ctc.gov.qa). These tenders will often use standard Terms and Conditions of contract and the use of both Tender Bonds and Performance Bonds is common. Companies may also be required to specify plans to establish a local presence, although this is not so typical for consultancy based contracts, and there is scope for variation clauses to be approved. However, companies seeking to operate a contract from a distance in the UK can be at a disadvantage to competitors who already have a local partner or other form of local presence.
Tenders may be "General", "Limited" or "Local", and different rules regarding advertising, applicability to bid and value apply to each, although the majority of tenders are classed as General and advertised to all. Limited tenders (using a shortlist of companies) require the approval of the Minister of Finance prior to bidding and contract award. Local tenders are restricted to a value below QR1,000,000 and use a prior approved shortlist of companies all of whom must be registered with the Chamber of Commerce.
Price remains the most important factor in the buying decision with only limited evidence of quality issues being considered and "value based" decision making. That said, UK products enjoy a good reputation in the market.
Quotations should be given in Qatari Riyals or $US, and where equipment is concerned, the correct INCOTERM should be researched before quoting. It is useful, but not essential, for commercial correspondence to be in Arabic and English.
Companies are advised to refer to the instructions on the Central Tender Committee's website www.ctc.gov.qa in terms of the required documentation.
Importing Goods into Qatar
In general, a person/entity wishing to import goods into Qatar for sale must be registered in the Importers Register and approved by the Qatar Chamber of Commerce & Industry (QCCI).
The standard rate of duty is 5% (ad valorem) of the CIF value in accordance with GCC Customs Union tariffs. Certain goods that compete with locally manufactured products attract a higher rate of duty, such as steel (20%), cement (20%) and urea (30%). 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.
Help and advice on customs classification numbers is available from HM Revenue & Customs website at www.hmrc.gov.uk.
Temporary Imports & Samples
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 can be extended by a further 6 months. A cheque or bank guarantee equivalent to the duty on a normal import must be deposited with the customs authorities.
Labelling & Packaging Regulations
Qatar enforces GCC shelf-life standards which affect around 170 food products. The manufacturer's established shelf life is accepted for other food products. Production and expiry dates must be printed on the original label or container by the manufacturer - dates cannot be added after the fact by a sticker. Products must arrive at destination with at least half the shelf-life duration remaining.
Labels must be in Arabic only or in Arabic/English. Arabic stickers are accepted. Small quantities of products with English-only labels may be approved for import on a case by case basis.
Food labels must be clearly labelled with: product and brand names; production and expiry dates; country of origin; name and address of the manufacturer; net weight in metric units; and a list of the ingredients and additives in descending order of importance. In addition, all fats and oils used as ingredients must be clearly identified on the label.
All importers are required by law to have an import license. Import licenses are issued only to Qatari nationals and must be registered with the Ministry of Economy and Commerce. This regulation also applies to wholly foreign owned entities operating in Qatar.
Import licenses: all imported meats require a health certificate issued by the country of export and a "Halal" slaughter certificate issued by an approved Islamic centre in that country.
In order to clear goods from customs zones at ports or land boundaries in Qatar, importers must submit a variety of documents, including a bill of lading, certificate of origin, pro forma invoice and import license. Information on specific requirements should be obtained from the Customs & Ports General Authority.
Customs & Ports General Authority,
PO Box 81,
T: (974) 4445 7457
W: www.customs.gov.qa (Arabic)
In Qatar, the letter of credit (LC) is the most common instrument for controlling exports and imports. When an LC is opened, the supplier is required to provide a certificate of origin and a certificate from the captain of the ship or from the shipping agency stating that the ship is allowed to enter Arab ports. Both documents should be notarised by an Arab Embassy or consulate or an Arab Chamber of Commerce in the exporting country.
Intellectual Property Rights
Trade marks can be registered at the Qatar Trade Mark Office. Inventive designs or industrial models can also be registered under the Trade Mark Law.
Qatar copyright law protects original literary and artistic works including computer programmes and databases which are creative in the selection and arrangement of their subject matter - materials must be registered at the Qatar Copyright Office to be protected.
Inventions and foreign patents can be registered at the Qatar Patent Office. However, a GCC Patent can be obtained by filing an application at the Patent Office in Saudi Arabia. Certificates of Patents granted by the GCC Patent Office secure legal protection of the inventor's rights in all member states (UAE, Bahrain, Saudi Arabia, Oman, Qatar and Kuwait).
Ministry of Business & Trade
PO Box 1968
Tel: (+974) 4494 5001/5555
Fax: (+974) 4494 5000;
Industrial Property Office
Trade Marks Office
Department of Commercial Registration & Licenses
Ministry of Business and & Trade (as above, under Supervisory Ministry)
Copyright & Related Rights
Department of Commercial Registration & Licenses
Ministry of Business & Trade (as above, under Supervisory Ministry)
GCC Patent Office
PO Box 340227
Kingdom of Saudi Arabia
Tel: (+9661) 482 0146/0136
Fax: (+9661) 482 9600
Refer also to the website of the World Intellectual Property Organization (WIPO): www.wipo.int/portal/index.html.en.
Source - UKTI