In order to establish a local office in Qatar, foreign and local companies are required to obtain a commercial registration from the Ministry of Economy and Commerce.  Any inquiries regarding the registration process should be directed to the Director of Commercial Affairs at the Ministry of Economy and Commerce. 

Commercial registrations are grouped into five categories:  (1) 100 percent foreign investment, (2) joint venture, (3) representative office, (4) temporary registration or (5) service agency.
 
1.  100 Percent Foreign Investment
According to Law No.13/2000, foreign firms are allowed 100 percent ownership in agriculture, industry, health, education and tourism sectors, as well as projects involved in the development and exploitation of natural resources or energy or mining, pending approval from the government.  The law specifically prohibits foreign investment in banking, insurance, commercial agencies and procurement or purchase of real estate.  However, Law No. 31/2004 allows foreign investment in the banking and insurance sectors by firms already active in these sectors upon approval of the Cabinet of Ministers.  Each application is reviewed on a case-to-case basis and foreign firms already active in these sectors may be granted any form of registration. Foreign firms working in sectors not specifically mentioned in these laws may be granted a 100 percent ownership on a case-by-case basis, upon approval of the Ministry of Economy and Commerce and or the Ministry of Energy and Industry.  Although there is paperwork to be filed and registration fees assessed during this process, this mode of registration offers the opportunity for foreign companies to operate independently.  With the exception of import licenses, registered foreign firms handle all administrative and financial transactions independently. This type of registration is granted after providing a certificate of deposit from a local bank stating the total capital of the foreign firm.
 
2.  Joint Venture
According to Law No. 13/2000, foreign firms may enter into joint ventures with Qatari partners provided the foreign equity does not exceed 49 percent of the total capital.  Joint ventures are allowed in all sectors of the economy excluding commercial agencies and real estate.  A joint venture in the banking and insurance sector is possible with an approval form the cabinet of ministers.
 
3.  Representative Office
In 2003, the Minister of Economy and Commerce announced that foreign firms may open representational offices without a local partner.  Such offices may not conduct any financial transactions related to the
company’s commercial activities in Qatar and are therefore not subject to taxation. However, a representative office can handle all administrative and financial transactions related to its representational operations in Qatar. A rep office could be converted into a joint venture or 100% foreign ownership at a later date.

4.  Temporary Registration
Foreign companies that have contracts with the GOQ may be granted temporary commercial registration to facilitate their operational transactions during the execution of their obligations.  This registration does not allow the foreign company to conduct commercial activity that is not related to the subject of its registration. Most foreign companies registered under this category do not need a sponsor or service agent. 
 
5.  Service Agents or Sponsorship
This type of agency consists of appointing a Qatari entity to act as a service agent for a foreign firm. Specific services would be determined by the two parties and may include handling administrative and business matters in Qatar, including immigration procedures, import licenses, providing introductions to decision-makers, etc. Although the service agent remains a common business practice in the region, it is no longer a requirement under Qatari law. U.S. firms should therefore determine if appointing a service agent is beneficial in their specific circumstances. This registration is under review and significant changes are expected to occur in the near future.  According to Law No. 25/2004, the service agent relationship is considered a form of proxy business. The competent authorities are preparing the implementing regulations. Fines and imprisonment penalties are to be inflected to whoever infringes the dispositions of the law.  If foreign companies choose to have a service agent, U.S. firms are advised to appoint such agents on a project-to-project basis, since a local agent or representative may be very well-connected in some sectors or tenders, but not in others. Charges and honoraria for local service agents should be negotiated between the two parties from the very first day of their relationship. However, the standard service agent charges or honoraria vary from 0 to 10 per cent depending on the size of the project and the scope of the service provided by the agent.