Entrepreneurs often need help deciding on the appropriate legal entity for their business. To select the suitable option, entrepreneurs must be aware of the pros and cons of the six legal entities available in Qatar.
Let us go through all business structure types in Qatar so you can choose the company type that is most appropriate for your business’s nature.
A sole proprietorship is a business structure where a single individual owns and operates the business. This type of business structure is easy to set up and manage, but the owner is liable for all debts and obligations of the company.
A General partnership company is a type of business that two or more people own. They are responsible for all the company’s debts and obligations; their names can be in the company name. They can also have a separate trade name, but it must show that it is a general partnership.
A Joint Venture is a type of business structure where two or more companies come together to form a new company for a specific project or business opportunity. Each company contributes capital, technology, and expertise to the joint venture. This business structure is common in Qatar’s oil and gas industry.
A Shareholding Company is a business where the capital is divided into equal, tradeable shares people can buy. Shareholders are not responsible for the company’s debts except for the value of their shares. The company must have at least five founders or shareholders, and they need to buy at least 20% but no more than 60% of the shares. The company must have a name that shows its purpose and must include the words “A Qatari Shareholding Company.” The company’s name should differ from a person’s name unless they own a patent or a commercial establishment. The company’s capital must be at least ten million Qatari Riyals to sell shares to the public.
A holding company controls another company or companies. The holding company can be a shareholding, limited liability, or sole proprietorship. If the holding company owns at least 51% of the other company’s shares or stakes, that another company becomes a subsidiary of the holding company.
At least five founders can establish a private shareholding company, which is not open to public trading. The shareholders must purchase all company shares, and its capital must be at least two million Qatari Riyals. Although private shareholding companies are subject to specific rules regarding public subscription, listing, and trading, they are mainly governed by the same provisions as other shareholding companies.
A Partnership Limited by Shares is a business with one or more active partners and other shareholders. Each partner and shareholder owns equal and tradable shares of the company’s capital. The active partners can’t manage the business but can supervise it. They are not responsible for the company’s debts, only for the value of their shares in the company.
A Branch Office is a type of business structure where a foreign company establishes a presence in Qatar. The foreign company maintains control of the operations and management of the branch office, but it must comply with Qatar’s laws and regulations. This type of business structure suits companies that want to expand their operations in Qatar without setting up a new company.