Qatar payroll and tax overview.

Foreign Direct Investment in Qatar

Located in West Asia, Qatar is one of seven nations that make up the Arabian Peninsula. The country shares one land border with Saudi Arabia, located to the south of Qatar.

Due to its mineral resources such as oil and natural gas, Qatar is a very wealthy country, the wealthiest in the world in fact, and has the third largest gas reserves in the world, behind Russia and Iran. Qatar enjoys the highest per capita income in the world and in 2018 was ranked first in the world for its taxation regime (corporate tax rate is 10% and the country has no personal income tax), according to the World Bank’s Doing Business Report.

As one of the fastest growing economies in the world, Qatar is a lucrative country for FDI and offers attractive incentives to both local and foreign investors. With an abundance of opportunities for investment in healthcare, education, infrastructure, tourism and financial services, it is no wonder that Qatar is quickly becoming one of the more favorable countries in which to conduct business.

Although Arabic is the official language of Qatar, English is widely spoken in the country and is the main business language. It is standard practice to have all business documents in both Arabic and English.

Registering a Company and Establishing an Entity in Qatar

Foreign investors are required to establish a legal presence in the country should they wish to conduct business. There are various business entities to choose from, however a Limited Liability Company (LLC) is the most popular entity used by overseas investors.

Limited Liability Company (LLC)

The majority of an LLC should be owned by Qatari nationals and their share should be around 51%, with the foreign investors share around 49%, unless otherwise exempt. There must be a minimum of two shareholders, however there should be no more than 50. The liability of the shareholders is limited to the amount of their respective percentage of ownership in the LLC’s capital. Almost all sectors of the economy are allowed to form an LLC, excluding banking, insurance and investment fund activities. The name given to the company must be followed by “LLC”.

An LLC is established by virtue of a Memorandum of Association (MOA) setting forth its terms of governance and related matters. The MOA must be drawn up in Arabic, with or without an additional English version, approved by the Ministry of Commerce and Industry (MoCI) and legalized before the Ministry of Justice.

Other types of business entities include, Limited Partnership Company, Joint Venture, Shareholding Company and Particular Partnership Company.

Business Banking in Qatar

It is mandatory to have an in-country bank account to process payments in Qatar. Banks are generally open Sunday to Thursday from 7.30am to 1pm.

What Are the Working Days and Working Hours in Qatar

The typical working week in Qatar is Sunday to Thursday from 9am to 6pm. Depending on the particular company’s policy, working hours can vary between 40 and 48 hours per week. Friday is the Muslim rest day, making it the only official weekend day. Saturday is often a working day for the construction and service industries.

During the month of Ramadan, the working day is reduced to six hours, legally this should apply to all staff, however some companies will only apply it to Muslims who are fasting during daylight hours.

Basic Facts about Qatar

Official Name: State of Qatar

Capital: Doha

Population: 2.782 million (World Bank, 2018)

Area: 11,571 km²

Major Language: Arabic

Major Religion: Muslim

Monetary Unit: Qatari Riyal

GNI Per Capita: $124,410 (World Bank, 2018)

Main Exports: Mineral fuels (including oil), plastics, fertilizers, aluminium and organic chemicals

Internet Domain: qa

International Dialing Code: +974

The tax year in Qatar runs from 1 January to 31 December.

Income Tax in Qatar

Expatriates are often drawn to Qatar due to its lack of personal income tax. Individuals are not taxed on any of their personal income and are not obliged to file a tax return with Qatar’s Public Revenues and Taxes Department (PRTD).

Foreign businesses operating in Qatar pay a 10% flat tax on any income earned from capital gains or activities and must file their tax return no later than four months after the end of the tax year. A tax rate of at least 35% applies to entities dealing with oil and gas operations. No extensions will be given for filing a business tax return in Qatar.

Social Security in Qatar

Due to the nation’s small population and high gross domestic product, there is essentially no social security system in Qatar, Qatari nationals are automatically provided with state help including sickness, medical care, maternity cover, child care, pensions, unemployment benefits and in some cases, housing and disability benefits.

Foreign expatriates working in Qatar are eligible to receive medical assistance, however any other social services are very limited to them. There are no state pension schemes in Qatar for expatriates, however some state institutions and global companies will have corporate pension schemes.

New Employees in Qatar

With approximately 90% of the Qatar workforce made up of foreign citizens, Qatar implemented the “Qatarization”, a strategic initiative introduced by the government to provide employment for its citizens in the private and public sectors. Qatari nationals are given priority over foreign workers when it comes to job opportunities. Should a Qatar based employer wish to hire an employee from abroad, they must obtain permission from the government.

In order for an expatriate to legally work in Qatar, the relevant permits are required, including a residency permit. A residency permit can only be obtained if an employer agrees to sponsor the employee. A work permit is also required for those working in Qatar for a long period of time.

Upon employment, the employer should supply the employee with a contract of employment or an agreement letter. The contract may be written in English, however like all official business documents in Qatar, the Arabic version is the one that will be officially recognized by the Ministry of Labor. The contract of employment should include the following items:

• Personal details
• Qatar ID
• Job title
• Job description
• Start date
• End date (if known)
• Probation period
• Notice period
• Salary
• Days of annual leave
• Benefits and any other entitlements

New employees may be required to complete a medical check and, in some cases, a criminal record check.

Leavers in Qatar

The labor law in Qatar states that as long as an employee submits a resignation letter that covers the criteria of period of notice stated in the employment contract, they will not be at fault for their decision, even if the employer refuses to accept the resignation.

The employer or employee can terminate employment at any stage without giving reason provided that the party intending to terminate notifies the other party in writing as detailed below:

1. In respect of the workers who receive their wages annually or monthly, the notification shall be given not less than one month prior to the date of the termination if the period of service is five years or less. If the period of service is more than five years, the notification period shall be at least two months prior to the date of termination.
2. In all other cases, the notification shall be given in accordance with the following periods:

• If the period of service is less than one year, the notification period shall be at least one week.
• If the period of service is more than one year and less than five years, the notification period shall be at least two weeks.
• If the service period is more than five years, the notification period shall be at least one month. If the contract is terminated without observing these periods, the party terminating the contract shall be obligated to compensate the other party for an amount equivalent to the wage for the notice period or the remaining part thereof.

It is legally acceptable to provide employees with an online payslip, there are no procedures regarding the provision of online payslips.

Payroll reports must be archived for at least six years.