Apart from being famous as a tourist destination, Qatar has been counted in the list of business investment locations. Located in the Arabian Peninsula and with its capital Doha, the region has been providing a favorable business climate to international investors.
Setting up a company in Qatar has turned out to be more prominent with time. Business industries of different natures have found stability across the region, giving birth to different corporate structures.
One such structure is a Qatari Shareholding Company. In this article, you will get a clear picture of why a public shareholding company (PSC) is a favorable option.
All about a Public Shareholding Qatari Company
Unlike a one-person company in Qatar, a Public Shareholding Company (PSC) is a business entity whose capital gets divided into equal shares of value. The shares dealt in this company turns out to be transferrable.
Here, this business entity is also termed a Joint Stock Company or a Qatar Shareholding Company.
Some Guidelines for a Qatari Shareholding Company
If someone chooses to incorporate a Public Shareholding Company in Qatar, the Ministry specifies specific guidelines.
- A minimum of two weeks and a maximum of four weeks must pass between subscription periods for company shares
- If shares are not fully subscribed, founders may, with the Ministry's approval, extend the subscription period by an additional two weeks
- A Public Shareholding Company must be established for a specific period, which must be stated in both the Articles of Association and the Memorandum of Association in a format established by a Ministerial Decree
- A special decision of the General Assembly may prolong a Public Shareholding Company's fixed term.
Certain Exceptions Regarding the Shareholders
In general, shareholders must be Qataris. However, there are three exceptions:
- A citizen of another Arab nation with which Qatar has reciprocal agreements that are significant
- Where foreign expertise or investment is required, provided that the Ministry of Economy and Commerce has issued the required license
- When a special decree that permits foreign ownership of shares of the company at incorporation was used.
Features of a PSC, Qatar
Let us have a look at some of the features of a public shareholding company in Qatar.
- The minimum number of shareholders turns out to be 5
- A PSC in Qatar holds the flexibility to be a Public or a Private Limited Company
- The minimum share capital required is QAR 10 million
- 100% Ownership is provided to foreigners in certain sectors
- Except for the nominal value of the shares they subscribe for, shareholders of a public shareholding firm are not responsible for the company's debts
- In compliance with the guidelines established by the Qatar Financial Markets Authority, a Company may purchase its shares to sell them.
To initiate a company in any foreign region, paperwork plays a very important role. Similarly, to start a PSC in Qatar, certain essentials are to be drafted and submitted. Let’s have a look at them.
How to Set Up a Joint Stock Company (JSC), Qatar?
Now, the process for business setup in Qatar involves a few steps in the case of a joint stock or a public shareholding company.
Register the Trade Name
The first and foremost task that you need to focus on when it comes to the company registration process is to get the trade name registered. While proceeding towards it, it is to be kept in mind that the name should be unique and not a copied one.
The name must have an Arabic meaning. The words "Qatari Public Shareholding Company" must always follow the company name.
Draft the Memorandum and Articles of Association
The next step in the pipeline is to draft the Memorandum and Articles of Association. The Memorandum contains the rights and duties related to the external stakeholders of the company, while the Articles of Association hold the duties and responsibilities to be performed within an organization.
Obtain the Commercial Residence/ Company Registration Certificate
Once done with the MOA and AOA, you need to submit all the essentials at the Company Registrar’s Office to obtain the Commercial Residence (CR) Certificate. This certificate is a legal license to perform business activities.
The following documents must be submitted:
- Copies of ID cards of shareholders
- Photocopies of each shareholder
- Financial Statements
- Business Plan
- Lease Agreement
- Copies of MOA and AOA
- Copy of Commercial Residence.
Obtain a Trading License
A trade license is to be obtained once you are done with the CR certificate. The trading license is issued by the Ministry of Economy and Commerce (MEC), which is a must to carry out business activities.
By now, you must have got an idea regarding the entire journey of incorporating a PSC in Qatar. The process can be made much easier if one is well-versed in the legal laws of Qatar.
Keeping this in mind, investors always prefer to go ahead with a business consultant who can ease the process. This not only helps in clearing the legal issue but also helps to understand the entire company proceedings within less time.
Our business experts will help you in building the core business domains that hold accounting, taxation, legal, visa services, etc. To have a word, contact us today-we’d be glad to assist.
What do the Memorandum and Articles of Association comprise?
The Memorandum contains the rights and duties related to the external stakeholders of the company, while the Articles of Association hold the duties and responsibilities to be performed within an organization.
Can a foreigner have 100% ownership of a Qatari shareholding company?
Yes, in certain sectors it is allowed.
What is the minimum number of shareholders for a PSC in Qatar?
How much should the duration between subscription periods for company shares be for a Qatari PSC?
A minimum of two weeks and a maximum of four weeks must pass between subscription periods for company shares.
Which authority issues the trading license for a public shareholding company in Qatar?
The Ministry of Economy and Commerce.