Corporate Local Sponsorship

To align with the economic diversification and growth goals set out in Qatar National Vision 2030, the Qatari government implemented legislation in 2019 aimed at attracting foreign investment in different sectors of the economy and facilitating improved access to the Qatari market for international investors.

The Foreign Investment Law (Law No. 1 of 2019) provides that foreign investors no longer require a local sponsor or partner to establish a company in Qatar. Previously, non-Qatari investors were subject to a requirement that 51% of the share capital must be held by a Qatari person, either a legal entity or Qatari citizen.

Qatar now provides for the establishment of 100% foreign-owned companies across multiple business sectors along with incentives and benefits for international investors, which include protections against expropriation, the ability to repatriate profits, and exemptions from certain taxes and customs duties.

However, establishment of a Qatari company in which foreign ownership exceeds 49% requires approval from the Ministry of Commerce and Industry (MOCI). An application form must be submitted to the Trade Exchange Development and Investment Promotion Department (TEDIPD) along with all required supporting documents to obtain its approval for establishing the LLC with foreign ownership.

Establishment of a 100% foreign-owned company does not apply to certain business activities, including the banking and insurance sectors, companies engaged in the exploitation of natural resources, commercial agencies or any other sectors as decided by the Council of Ministers.

There are two options for local Qatari sponsorship:

• Individual Sponsorship (Qatari National) – a Qatari citizen who owns 51% shares in the corporation.
• Corporate Sponsor (Qatari-owned Company) – a local company that has a substantial ownership in a foreign corporation and provides it with managerial and operational assistance.

As a registered Corporate Service Provider (CSP) in Qatar, Sovereign PPG can act as the local corporate sponsor for foreign investors and provide local Qatari sponsorship to foreign companies setting up in Qatar.

The percentage owned by the local sponsor can vary depending on the activities but, generally, it follows a 51% to 49% share split between the local sponsor and the foreign investor.

The foreign shareholder and Qatari sponsor should enter into side agreements to formalise the business relationship. These agreements should cover the management structure, profit distribution and the mechanism for transferring the company’s shares.

The contracts should also provide for exit, transfer and sales clauses with no penalties. This allows the entity to have a clear exit strategy and full control over its intellectual property, brand and profits and losses accounts.

It is essential to choose the right business partner in Qatar. As your local sponsor, Sovereign PPG offers its full suite of corporate services including company formation, tax registration, director services, bank account opening, office rental, visas, work permits and IDs.

We can further support businesses with payroll, accounting, HR and compliance services.

Sovereign PPG has an experienced client relationship team to ensure effective ongoing communication. We also have frequent contact with regulators and good relationships in government departments, allowing us to assist with and expedite processes for approvals connected to business operations.

We have a highly experienced team of fluent Arabic speaking PROs on the ground to support foreign companies with seamless government liaison services in Qatar, as well as Abu Dhabi, Dubai, the wider UAE, Oman, Bahrain and Saudi Arabia.

Sovereign PPG provides a professional, dedicated corporate local sponsorship platform for onshore companies that is designed to protect your business interests and give you peace of mind.

Whether you’re setting up a new company or seeking to transition from an existing sponsor, our team will ensure a smooth and compliant process, that is backed by legally binding agreements and will provide you with security and full management control.

If you are setting up a company in Qatar and require the services of a local sponsor, contact us and we can discuss your requirements in more detail.