This week, James Swallow talks about the practicalities of setting up a branch office and representative trade office in Qatar.
Recently I talked about some of the issues of setting up a Limited Liability Company (LLC) in Qatar. Today, I’d like to talk about other options available, along with some of the pitfalls which investors should do their upmost to avoid. One of these options that may be open to foreign company is setting up a branch office.
A foreign business which is performing a specific contract in Qatar is able to set up a branch office if the project “facilitates the performance of a public service of utility.” In other words, if it has a contract with a Government entity.
One of the main advantages in setting up a branch office in Qatar is that there is no need for a Qatari partner and the foreign entity can own 100% of the business.
However, there are limitations to setting up a branch office. For example, it’s only allowed to perform the specific contract for which it’s registered, making it less flexible than an LLC for instance. Additionally, the branch must be authorised by the Ministry of Economy and Commerce.
It’s also worth noting that unless they are provided with special exemption by the Qatari government, a branch will be fully taxable.
Whilst setting up, a Branch Office is one option you can take, another that is open to you is a Representative Trade Office.
Representative Trade Office
Like with all options, setting up a Trade Representative Office in Qatar has both advantages and limitations that it is important to be aware of.
As with the Branch Office, there is no need for a Qatari partner and a foreign company is permitted to own a 100% stake in the business.
The Trade Representative Office can be used to promote a foreign company in Qatar and to introduce its products to Qatar-based businesses as part of a non-trading ‘shop-window.’
They are allowed to contact clients to highlight its foreign establishment and companies whose services it represents, in order to widen its circle of distribution.
They are also allowed to contact sellers and exporters of materials needed by the authorities that they represent, as well as remove barriers that impede the quick arrival of these products to the authorities.
However, they are not allowed to import or sell goods, only samples that are manufactured by the company they represent for the purposes of promotion. Nor are they able to promote products or services that are nott related to the same company, or contact consumers directly.
Finding the most suitable option
Setting up a company in Qatar can be highly lucrative, however that doesn’t mean that there aren’t pitfalls. It’s important for your business’s sake that you know as much as possible about how things are done in the region so you don’t land yourself in financial or legal difficulties.
If you wish to find out about the service offered by Pro-Partnership you can visit the website at http://www.pro-partnership.com/.
James Swallow is Commercial Director of Middle East based PRO Partner Group. PRO Partner Group specialises in providing foreign investors with a seamless and financially efficient means to setting up a profitable corporate presence in the UAE, Qatar and Oman.