Foreign investors can soon own 100% equity in Qatari companies

In order to attract and increase the foreign capital investments and to accelerate the further development of commercial and economic sectors and in accordance with the guidelines received from His Highness the Emir Sheikh Tamin Bin Hamad Al-Thani, the Ministry of Economic and Commerce of Qatar announced that a draft law which will allow foreign investors to own 100% of equity in all industrial sectors is under legislative approval.

This will result as a remarkable change compared with the current legislation on that regard, with Law No. 13 (2000) “Foreign Capital Investment Law” that currently allows foreign companies to invest in all sectors only up to a maximum of 49% in the equity of Qatari Limited  Liability Companies and with the Ministry of Commerce which reserves the right to issue a resolution to concede foreign investors to own 100% of the equity in particular sectors (Manufacturing, Health, Tourism) provided that the related projects are consistent with the Qatar Development Plan.

With the present legislation in force it is not allowed investing in banking and insurance sectors or engaging in commercial agencies, owning shares in excess of 25% of Qatari Shareholding Companies traded on the Qatar Stock Exchanges, while with the new announced law it should be possible to foreign investors to finally own 100% of the shares of the Qatari Companies and to own up to 49% of the share capital of Qatari listed firms on the Qatar Stock Exchange.

Other possible provisions expected with the new law are the possibility for foreign investors to invest in banks and insurance companies, to transfer the ownership from one investor to another one with a simplified process and an exemption from income tax and customs duties.

The specific insights regarding the final implementation of the draft law are not yet available, but Mercans will closely oversees further announcements on this regard, considering the significant implications they will have on companies commercial and organizational perspectives and plans.