100% Ownership for IT Companies in Qatar

We are very impressed with the most recent change in Qatar's foreign ownership laws, which now allows 100% foreign ownership of Information and Technology companies.

Of course, you would still have to cough up QAR200,000 for a company here, and rent an office, but then Qatar is looking for serious investors in the country.

This is one of three sectors which have been thrown open to full foreign ownership - the other sectors being distribution services and consultative and technical work services. These join a number of existing areas where this is already allowed.

Giving up 51% of your business, even with a revenue sharing agreeement which allows you to keep the bulk of the profits, puts off some investors, and it's a smart move to remove this obligation from areas of the economy which could do with a boost - or which could boost other industries in Qatar.

We also suspect that ICT Qatar, a fairly forward thinking organisation which seems faster on its feet than some Qatar beaurocracy, may be behind the move to encourage IT investment.

You can read the original article in the Peninsula. You can also read David Chaddock's article on How to Set Up a Business in Qatar.

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Setting Up a Business in Qatar

Establishing a business in Qatar means getting used to completely different rules and regulations as well as getting used to dealing with a differnent way of doing business. For starters, in most cases foreign entreupeneurs will not be able to have a majority ownership in their business, even when putting up 100% of the capital, and this usually means receving 49% of the profit. As one businessman explained to me:

You come up with the business plan, you find the money for the business, you run the business, you accept all the risk - and if you are lucky enough to make a profit your partner lets you keep half!

(Although, as has been pointed out before on comments on this blog, a contract can easily be set up so that you actually get more than half the profits.)

Just to make starting a business worthwhile, then, a business owner has to be able to make twice what he would be able to do so back home, even before allowing for the associated risks of setting up a business in a foreign country with alien laws and legislation, usually written in a language he or she cannot understand.

Despite this, new businesses are started all the time - coming to the richest country in the world is obviously too big a lure for entreupeneurs to resist. And some make profit, whether they are a couple of enterprising restauranteers running a juice cafe by the side of the road, or running a high profile web design company.

Our latest article, Establishing a Business in Qatar by businessman and writer David Chaddock, author of Qatar: The Business Traveller's Handbook, will be an invaluable resource for anyone thinking of setting up a business in Qatar. The article follows on from Doing Business in Qatar, and will be followed next month with an in-depth look at recruitment in Qatar.

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Can Qatar ride out the recession?

Both the economy and the people may be as gloomy as the weather back in the UK, but so far the looming global recession does not seem to be affecting Qatar.

The average person seem to ploughing on with their usual life and concerns, and the state of the world's economy, while meriting the odd depressed comment, does not yet dominate conversations.

Many feel that Qatar, and indeed the Middle East, is a safe spot, and that the region's oil and gas reserves will insulate it from any crisis.

Indeed Brits can now finally enjoy more favourable exchange rates - the pound dropped below six riyals last week for the first time in several years.

More foreigners may also be seeking work in Qatar. Experts have been predicting that jobs seekers from the West will be forced by the miserable job market back home to seek work in the Middle East, and indeed a jump in the number of CVs being uploaded via our website seems to suggest that this is indeed the case.

Our optimism may not be justified. Many of the massive projects underway in Qatar have been financed with money from abroad, and finance worldwide is drying up. These projects may now be heading into trouble.

The government certainly has plenty of cash, but whether this will be enough, or whether they will be willing to use it to provide a net for the reckless business owners who have ridden the bubble till it popped, remains to be seen.

The price of oil is likely to fall. Initial cuts in production do seem to have stemmed the fall, but by doing so the oil cartels may be preventing one of the mechanisms which will help the industries of the West to recover. As the Middle East have huge investments in the West, this will hurt them as well. Of course, they could take advantage of the current situation to snap up assets at bargain prices, so a temporary fall in share values might not bother them hugely.

However, ambitous private projects aside, Qatar does have a serious advantage. Its huge natural gas reserves are only just beginning to be utilized, and with the formation of a cartel with other major suppliers Russia and Iran it may be able to enjoy stable prices even within the context of a global recession.

Ultimately, I don't know how well Qatar is going to weather the current financial crisis. Nevertheless, it still seems a better bet than debt ridden Britain and our spendthrift Prime Minister, Gordon Brown.

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Doing Business in Qatar

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Greenhorns coming to Qatar from the West to do business in Qatar, and expecting the groundrules to be the same as at home, will be in for a sharp shock. Qatar is a quagmire for the unitiated and inexperienced, and there is a whole, and very different, etiquette of doing business. Before doing business here, then, it is a good idea to get the advice of more experienced business people who have been here for years and have an extensive knowledge of the country, its people and its business practices.

In the first of two articles for Qatar Visitor, both excerpted from his book, Qatar: A Business Travellers Handbook, author and businessman David Chaddock offers no-nonsense advice to business people coming to Qatar. The article, Doing Business in Qatar, includes suggestions on how to conduct your first meeting, the intricacies of swapping business cards and general tips on how to conduct business in Qatar. With more than thirty years of experience of conducting business in Qatar and the Middle East, there can be few people more qualified to give this advice.

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