market entry method to qatar - steps & considerations: pro-partnership
TRANSCRIPT
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MARKET ENTRY STRATEGIES TO QATAR STEPS & CONSIDERATIONSPresented by Liam Trump
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AGENDA
1. Who We Are
2. Offshore Trading Options
3. Onshore Establishment Options
4. Points to Consider
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• Established in 2010, 100% Qatari owned.
• PRO-Partnership act as the 51% Qatari corporate partner for LLC companies who wish to start or expand their businesses in Qatar.
• Provides greater safety and security for your investment
ABOUT US
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Offshore Trading Options
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ONSHORE OPTIONS OVERVIEW
Offshore Options
Fly In/Fly Out Method
Commercial Agency
Agreement
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1. FLY IN & FLY OUT METHODThe method most preferred by Consultants: Fly in to Qatar on a Business Visa, complete the project and fly back out.
• Considerations of The Fly In/Fly Out Method:
• Less projects being awarded to non-local entities.
• As invoicing is coming from abroad, subject to withholding taxes of 5-7% of gross invoice amount.
• Obtaining the correct visa’s are difficult (Should be business visa)
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2. COMMERCIAL AGENCY AGREEMENTSFully Active Commercial Agency Agreements:
Full commercial agency agreements allows the local Qatari Company to fully trade products in Qatar meaning:
• They have a legal commercial trade licensing company in Qatar • As there is no general trade license activity the Qatari company must have a trading
license matching the product or services in order to trade it legally • Depending on the product they have the ability to apply via the appropriate ministry to
approve product for import • The local representative company must be a 100% Qatari owned company
If the above is matching the local representative is able to offer a full representative service including:
1. Importing and storing the product 2. Selling of product & service 3. Invoicing 4. Represent the company 5. Apply for customs license
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2. COMMERCIAL AGENCY AGREEMENTSPartial Agency Agreements:
Partial agency agreements allows the local Qatari company to simply represent the product or service in Qatar meaning.
1. They have a legal marketing company
If the above is matching the local representative is able to offer the following:
2. Represent the product and service3. Sell the product
However under partial agency agreement the company can’t:
4. Invoice 5. Import or store 3. All importing and invoicing would be done via a local 3’d party partner or directly via the buyer.
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Onshore Establishment Options
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ONSHORE OPTIONS OVERVIEW
Onshore Options
LLC Incorporation
100% Foreign Ownership
Branch OfficeTrade
Representative Office
QFC Law 1 2010
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1. LIMITED LIABILITY COMPANYA Limited Liability Company (LLC) is the most common establishment option in Qatar.
Key Requirements/Considerations:
• (Usually) Requires a 51% Qatari Partner/Shareholder. However, profit share doesn’t necessarily reflect Shareholding.
Main Advantages of Operating As a Limited Liability Company:
• Can fulfil an unlimited number of contracts
• Recognised as a local company, often permitting the entity to take part in an increased number of government and private tenders.
• The company will not be subject to withholding tax.
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1. LIMITED LIABILITY COMPANY - TIME LINE
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START FINISH
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2. BRANCH OFFICE If you are a foreign company executing a specific contract issued by a government or quasi-government entity in Qatar, you may establish a Branch Office.
The contract, must “facilitate the performance of a public service or utility,”
Main Advantages of Operating As a Branch Office:
• Can maintain 100% Foreign Ownership
Considerations of a Branch Office:
• Limited to single contract
• Expensive Government License Fee’s levied
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Option For Manufacturing companies
This type of representation is useful in introducing your products to Qatari companies as a non-trading ”shop-window.”
Main Advantages of Operating As a Trade Representative Office:
• Can maintain 100% foreign ownership
Considerations of a Trade Office:
• Cannot export, import or sell in the State of Qatar• Requires Ministerial Approval based on the manufacturing License of the mother
country entity
3. TRADE REPRESENTATIVE COMPANY
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Allows For Foreign Ownership in a large number of fields as long as it fits their criteria which are:
Main Advantages of Operating Under QFC:
• Can maintain 100% foreign ownership
Considerations of Operating Under QFC:
• No Trading Companies
• No Blue Collar Workers
• No Startups
4. QATAR FINANCIAL CENTER
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Law No.1 of 2010, amending Law No.13 of 200 allows for 100% foreign ownership in certain sectors, namely …
• Agriculture• Industry• Health • Education• Tourism• Development Natural Resources• Energy or Mining
• Consultancy & Technical Services• Information Technology• Culture• Sport & Recreation Services• Distribution Services
BUT…. It Requires Ministerial Approval!
6. LAW NO.1 2010
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GENERAL CONSIDERATIONS FOR ONSHORE ENTITIES
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GENERAL CONSIDERATIONS FOR ONSHORE ENTITIESCompanies Locally Established in Qatar, be it an LLC, Branch Office, Trade Representative Office, QFC Must Maintain:
• A 12 month lease of an office space in the name of the company.
• A locally appointed auditor to file your tax returns
• Are subject to 10% Corporation Tax
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SUMMARYNext Steps..
1. Identify opportunity in the marketplace, short & long term.
2. Identify which Market Entry Method is best suited to your organisation
3. Seek out expert advice e.g. PRO-Partnership, Lawyers, Business Owner Referrals