What is a Qatar LLC?
A Limited Liability Company (LLC), often referred to as a With Limited Liability (WLL) company in Qatar, is a legal entity that provides the company’s shareholders with limited liability. The key benefit of an LLC is that the liability of shareholders is limited to the amount that they have invested in the company; their personal assets cannot be used to satisfy the debts and obligations of the LLC if it faces legal or financial issues.
Ownership of a Qatar LLC
New measures to encourage foreign direct investment were introduced in 2019, which included changing the ownership rules to permit 100% foreign ownership of companies in most sectors, excluding financial services and insurance, commercial agencies and other sectors as decided by the Council of Ministers. Previously
While many foreign investors now opt for 100% foreign ownership, there may still be strategic reasons for businesses to include a local Qatari or GCC shareholder or Corporate Service Provider (CSP) such as Sovereign in their company structure.
In some industries, such as defence activities, certain trading categories or recruitment services, full foreign ownership is either restricted or not permitted. In these cases, having a local corporate partner enables access to otherwise limited business activities.
Beyond regulatory considerations, a corporate shareholder can play an important role in facilitating smoother interactions with government entities, finding and bidding for government tenders, handling PRO services, and assisting with licensing, immigration, and municipality approvals. The on-ground expertise can also significantly reduce setup time and help ensure compliance with Qatar’s legal framework in an otherwise unfamiliar business landscape.
Requirements for setting up a Qatar LLC
The LLC structure is used both in the Qatar mainland and in Qatar’s Free Zones requirements for a limited liability company will vary from the mainland to free zones. For specific information on LLC set up in the free zones or Qatar Financial Centre (QFC), contact us, and we can inform you of the difference in LLC requirements.
As for a mainland LLC registered with the Ministry of Commerce and Industry (MOCI), the requirements are as follows:
Documentary requirements for an LLC in Qatar
Qatar LLC Taxes and Company Maintenance
Qatar mainland LLCs are subject to a 10% corporate income tax on net profits, but only on the foreign-owned share of the business. If the company has any Qatari partners, they are tax-exempt.
Companies must file their tax returns with the General Tax Authority (GTA) within 4 months of the financial year-end, which typically falls on 30th April each year.
Withholding tax applies to payments made to non-residents for services like royalties or technical fees, at rates of 5-7%.
While VAT is not yet implemented, businesses are encouraged to prepare for its eventual and imminent rollout.
In terms of ongoing company maintenance, LLCs must prepare and submit audited financial statements annually, maintain accounting records for 10 years. Sovereign can help you with preparing financial statements as well as ensure the timely renewal of key registrations such as the Commercial Registration (CR), Municipal License, and Establishment Card. Additionally, immigration and labour files must be kept up to date, especially when managing Qatar staff visas.
Sovereign is on the ground in Doha to support your LLC company setup and will ensure you apply for the correct license and activities that align with your business operations. Contact us for more information and support with your LLC company formation.
Please contact us if you have any questions or queries and your local representative will be in touch with you as soon as possible.
