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Changes in Qatari Foreign Investment Law

Guiding Principles

According to the new Law No. 1 of 2010 , Amending Some Provisions of Qatari Foreign Investment Law No. 13 of 2000, foreign investors will be allowed to up to 100% ownership in more sectors in Qatar.

A. Foreign Investment Law in Qatar
In Qatar, generally foreign investment is limited to 49% of the share capital for most activities in the state and a local partner is required, holding minimum 51% of the shares.

However, foreign investors may exceed the limit of 49% and reach up to 100% of the share capital in selected sectors upon special approval, such as agriculture, industry, health, education, tourism, development of natural resources or energy and mining, on condition that the projects in question are in line with the country’s development objectives. Exemptions may be granted by the Ministry of Finance, Business and Trade in certain areas, if consistent with Qatar’s development plans, its plan to diversify the local economy and attract foreign capital. During the last years the law was amended twice, first with Decree No. 31 in 2004 and furthermore with Decree No. 2 in 2005. The most recent change was in 2010 with the Law No. 1 of 2010 amending some provisions of Qatari Foreign Investment Law No.13 of 2000.

B. Changes in the Law and its Consequences
With the new changes, investors, wishing to invest in Qatar are now allowed to hold 100 % ownership in more sectors in Qatar upon special approval by the Ministry of Finance, Economy and Trade. Banking, Insurance, Commercial Agencies and Real Estate still remain out of range for foreign investment.

C. Requirements for Obtaining a Special Approval to own 100% of a Company
The special approval for holding 100% ownership of a Qatari Company can be reached, if certain conditions have been met:

  • The investor has to apply for a special approval to own 100% of the shares in a company with the Investment Promotion Department at the Ministry of Finance, Economy and Trade, to present its business and provide a feasibility study. The Investment Promotion Department will report to the Minister of Finance, Economy and Trade, who is granting an exemption on a case by case basis.
  • The planned business shall be new, innovative, creative or a special business idea and shall lead to an enhancement of business in Qatar or create new jobs in Qatar.

Moreover the business should fall into the following activities:

  • Technical services, for example: architectural, engineering, landscaping services etc;  
  • IT, for example: implementation technology;
  • distribution services, for example: retail, wholesale and commercial services, franchising etc.;
  • Consultation services, for example: accounting, legal etc.;
  • Agriculture; industry; health; education; tourism; development and exploitation of natural resources; energy; mining; and/or cultural, sports, entertainment and recreational services.

Depending on the individual case and the above mentioned requirements, the Minister of Economy and Trade will either grant a special approval or reject the application.

D. Summary and Outlook
The classification of the activities which will be covered by this new Law is still under process; however, this is the (unofficial and not published) status quo.

It is expected that a classification/code of activities, which specifies the activities covered by the new Law, will be published. This will serve as a basis for the Minister’s case by case decision.

In case that in the future many investors have been granted with exemptions, this would attract more investors to do business in Qatar. 

January, 2011 Roueida Hamdan
  Meyer-Reumann & Partners – Dubai Office
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