Posted By: Mubarak Bin Abdullah Al Sulaiti

Post Date: 1/1/2017

Reforms in Company's Law in Qatar: Foreign Trade, Internal Trade and Export

In the shadow of the accelerating chain of events that are currently sweeping the Arab World in general and the Gulf Area in particular and specifically speaking; today's State of Qatar. The State of Qatar, which was targeted by an oppressive and unjust blockade and brutal siege launched last June given the fact that the State of Qatar has always considered the GCC countries as one Economic Block founded on trading and commercial exchange among its countries. Yet, after the proclamation of these unjust acts from the Siege States' part, and as acting under compulsion, Qatar had no choice but to adopt a new policy aiming at boosting and strengthening its national economy and opening up a new path to investment in the State of Qatar. Qatar found commercial alternatives to meet its demands of commodities and goods that it used to import from the Siege States and depend mainly on its national industries to achieve that goal; the matter that would necessarily require performing legislative reforms that go in line with such proclaimed policy. To that end, His Highness Sheikh Tamim Bin Hamad Bin Khalifa Al Thani; the Emir of the State of Qatar, has rendered his royal directives and instructions to develop legislative reforms and action plans that contribute to the attraction of foreign investments and urge the venture capitalists to invest in the State of Qatar, particularly as Qatar maintains the material capabilities and enterprises that help the country achieve a sort of sustainable economic development. In the matter of the Internal Trade,

The State of Qatar has a competitive advantage based mainly on deep-rooted pillars as represented in the institutional frameworks that feature a worldly renowned efficiency and stable economic environment apart from its emerging commodity market. Moreover, the State of Qatar is stamped with the most distinctive character i.e. the maintenance of an exponentially accelerated growth thanks to the economic policies adopted thereby. In the Matter of the Foreign Trade,

The EU Member States Group is considered the most important commercial partner for the State of Qatar since it is ranked on top of the list of the economic blocks in terms of exports. Furthermore, the Qatari Import from North America ranked in the fourth place in terms of its share and Qatari import from the United States of America, which bears the largest portion of that share. In the Matter of the Qatari Exports,

Revenues from the Qatari Non-Oil Exports increased during last October to reach more than 8% despite of the blockage imposed on Doha for over six months now. According to the statistics recently revealed by Qatar Chamber of Commerce and Industry (QCCI), the total value of these imports amounted to approx. QR 1.7 Billion (around 467 Million US dollars) last October denoting the fact that Qatar has achieved a rate of growth exceeding 8.6% compared to last month with an annual growth rate estimated at 3.7%. The total value of the Qatari Non-Oil Exports during the 1st ten months of this year amounted to (QR. 14.95B) equivalent to (US$ 4.1B) according to the statement recently released by QCCI. In the Matter of the Companies and Enterprises,

The Qatari Ministry of Economy and Trade (MOET) is deemed the entity in charge of developing and setting the programs and schemes necessary to implement the policies for the development of Business and Trade Sector. The MOET is entrusted with powers and authorities to oversee and supervise business and commercial activities and direct the same in a manner to go in line with and meet the requirements of the national development. In addition to that it’s role in proposing and executing policies and programs that aim at attracting investments, supporting and promoting imports, and finally developing the mechanisms and procedures for the provision of the general services for the business and investment sectors along with its role in the supervision of enterprises engaged in and carrying out professional and commercial activities. The State of Qatar has realized the dire need to develop new legislations that highly praise and drive benefits from these capabilities and to be regulated in an optimal manner. These newly enacted regulations include without being limited to the following:

First: With regard to the Free Zones:

His Royal Highness; the Emir of State of Qatar has issued Decree Law no. M (21) for the year 2017 amending some provisions of Law No. (34) for the Year 2005 with regard to the Investment Free Zones which will ultimately propel and fuel the national economy and enhance investment environment in the State of Qatar by means of strengthening business activities, supporting the procedures for attraction of local and foreign investments into these free zones including both the economic zones and Hamad International Airport (HIA). The new reforms implied the lifting of restrictions on the nationality of the capital, the right to choose the legal form for the intended project, the free will to determine and set the prices of the products and percentage of profits in addition to the exemption of the capitalist assets, production inputs, exports and imports from the applicable taxes and other enforced levies. The Projects set up in the free zones are granted various types of incentives and guarantees most importantly the lack of any restriction on their proprietorships, granting special incentives and privileges to the projects that help increase the national content in the production process and also the projects that invest in the logistics and communication sectors for example to privilege them with reduced prices or facilities in power supply and to exempt all local components and domestic contents from the custom taxes in case of being sold in the local market. Rendering all facilities required to issue the necessary permits, licenses and approvals for establishment of projects by the free zones authority in an endeavor to save time and effort in addition to the procurement of lands and plots equipped with core utilities and facilities deemed essential for the setting up of these projects according to the areas that fit the nature of each project.

Second: Enactment of Laws that encourage the attraction of investments and polarization of Investors:

The currently enacted law that organizes and regulates foreigners' ownership of real estates is law no. (17) for the Year 20014 with regard to the Organization of Ownership and Use of Real Estate and Residential Units by non-Qataris which has vested non-Qataris with the right of usufruct to own real estates and residential units at Gulf Pearl Island, Arabian Gulf Project and Al Khor Resort Project. Moreover, the law has permitted the utilization of real estates by virtue of a usufruct for a period of (99) years renewable for similar terms in (18) investment free zones to be determined by virtue of Ministerial Resolution No. 6 of 2006. There are no specific usufruct areas that are permitted only for GCC nationals; all of the above areas are open before all foreigners. In light of the current circumstances, this law was proved insufficient and inconvenient for the coming era, as a result, His Excellency; the Prime Minister has declared since days in a TV interview the tidings of new draft law for non-Qataris' ownership of real estates which will be promulgated with a month. These new legislations resulted in favoring the non-Qatari Investor with various incentives and privileges including:

General Exemptions:

- The foreign investor may import for its investment project whatever it may need to its operation and expansion.
- The newly enacted laws exempt the invested foreign capital from the income tax for a period of ten years as of the commercial operation of the project.
- The newly enacted laws do also exempt the industrial project from the custom taxes on its imports of production inputs, raw materials and semi-finished items deemed necessary for production which are not available in the local markets. These legislations encourage and urge investors to invest in the State of Qatar on the following grounds:
- They create opportunities for investment and preparation of preliminary and feasibility studies for industrial projects.
- Assist the licensed industrial project in borrowing and obtainment of loans from the Industrial Development Banks and other financial institutions in the State of Qatar.
- Provide the project with the necessary utilities i.e. power, oil, water and natural gas at competitive prices.

These reforms come in conjunction with other reforms and development in all political, legislative and economic fields within an integrated plan to achieve Qatar National Vision 2030 launched in October 2008 by the General Secretariat for Development Planning in the State of Qatar.

Mubarak Bin Abdullah Al Sulaiti
Advocate & Legal Consultant
Chairman at Al Sulaiti Law Firm

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