Key Factors to Consider When Employing in Qatar
Employing in Qatar: What You Need to Know
Shield GEO is not operating in Qatar at this time. However, feel free to contact us and we’ll do our best to assist you with your employment needs or connect you with a trusted partner.
Key Factors to Consider When Employing in Qatar
The “Qatarization” initiative aims to increase the number of Qatari nationals in the workforce. The employment of Qatari nationals are given priority over foreign workers.
Companies must obtain residence and work permits for any expatriate staff hired.
Corporate employers must sponsor all foreign workers while they are in Qatar.
There are local religious customs and business practices that should be considered.
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Contracts
In Qatar, employers should provide foreign workers with a contract of employment (Service Contract), or an official letter of agreement which specifies the conditions of employment. According to Qatari laws, it is not mandated that an employment contract between an employee and an employer must be in writing, where verbal agreement is possible, although the written agreement is preferred. If an employment relationship is established without a contract, sufficient proof should be provided.
The employment contract may be written in English, although it is the Arabic version that will be officially recognized by the Qatar Ministry of Labor. It is recommended to have any employment documents attested to by a notary, although it is not compulsory. In addition, the terms of the contract may possibly be changed, so proper precautions should be made.
The contract should contain the following information:
- Job title and description
- Personal details, including Qatar ID
- Start date of employment
- End date of employment if applicable
- Notice period
- Probationary period
- Salary
- Days of annual leave
- Employment benefits and other entitlements
The employment contract takes precedence over local labor laws due to greater stipulations and terms, although there are laws that provide certain protection regardless of the existence of a contract.
The duration of an employment contract is typically open-ended, moving from a traditional two-year contract to one that extends indefinitely until the assigned work is done or until either party wishes to terminate the contract. The duration of the contract may be extended given the mutual consent of the employer and the employee, and it is common for foreign workers to remain in Qatar for longer than 20 years.
It must be noted that Qatar has job quotas for certain industries like service industries, where official employment for that particular role may not be filled by a foreign employee.
Employee Entitlements
| Information | Explanation |
|---|---|
| Statutory Working Hours | The hours of the working week vary between 40 and 48 hours depending on company policy. In the month of Ramadan, the working day is legally reduced to 6 hours, although many companies apply this to Muslims only. The rest interval which includes prayer, rest, and meals are between one and three hours per day.
Friday is typically a rest day, where either a Thursday or Saturday becomes another rest day as part of a 5-day working week. Overtime may be taken in addition to the standard eight hours per day up to a maximum of ten hours a day, unless it is necessary to prevent gross loss or dangerous accident. Additional working hours attract an additional 25% minimum of the basic wage for each extra hour worked. |
| Medical Leave | The worker is entitled to sick leave if they have been working for longer than three months and if the reason for sickness is proved through a medical certificate written by an approved physician. Any sick leave lasting two weeks or less provides full wage entitlement to the worker. Half pay applies to any excess weeks off up to an additional four weeks, and zero pay for any sick leave taken after that. Termination may occur after the twelfth week of sickness if a physician indicates the employee’s inability to work. Resignation by the employee may also occur, where the employer must pay any outstanding balance on his/her entitlements.
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| Annual Leave Accrual Entitlement | Workers who have completed one continuous year in the service of an employer in Qatar are entitled to annual leave with pay based on their basic wage. Leave is required to be no less than three weeks a year for those who have worked for less than 5 years, and four weeks for those working longer than 5 years. The annual leave pay should be paid prior to the annual leave. The leave period lies on fixed dates specified by the employer, and no more than half of the annual leave each year may be postponed to the following year.
Qatari workers are also entitled to three working days each for Eid El-Fitr and Eid Al-Adha, which are religious holidays, one working day for Independence Day, and three working days of the employer’s choosing. Religious Leave Muslim employees are entitled to leave without pay for up to two weeks for their pilgrimage that may occur once during the period of their service. The employer must specify the number of workers who are granted this leave according to work requirements. |
| Maternity Leave in Qatar | Female workers are entitled to maternity leave of 50 days with full pay once they have been employed for a full year. This period covers the time before and after delivery and is determined by a physician through the issue of a medical certificate indicating the date of delivery. In addition, females are entitled to a daily nursing period which comprise of a paid hour-long break every day for nursing duties.
Employers may not terminate a female worker’s service contract due to her marriage or because of taking maternity leave. Employers may not submit a notice of termination during this period.
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Employment Termination
| Information | Explanation |
|---|---|
| Termination of Employment | Indefinite term
Under Article 49 of the Labor Law, the termination of an employee in an indefinite term arrangement may be initiated by either the employer or the employee with a written notice. A termination may be made without cause in this case, as long as a written notice is provided. The termination notices must be provided no less than one month prior to the termination date for workers employed for 5 years or less, while two months’ notice is required for those employed for longer than 5 years. Terminating an employment relationship in this way requires the employer to pay the employee any wages and benefits due in full for the period of the notice, provided the employee conducts his regular duties in full during this time. The employer is obliged to pay this compensation in full even if they request the employee to not work for the full duration. Fixed-term In a definite term arrangement, termination must comply with specific grounds under Qatar Labour Law. There are no legal requirements for either party to provide notice during the term, although termination without reason must be agreed upon by both parties. If the employee does not consent to the termination of employment, the employer is obliged to pay the employee wages and benefits, inclusive of service gratuity in full. The nature of these payments is dependent on individual circumstances. Immediate effect termination Termination may occur immediately in special circumstances where the employee or employer provides a reason for termination when a reason is not required. No written notice is required and no payments to the employee are required. |
Probation
| Information | Explanation |
|---|---|
| Probation Period | The service contract may contain certain provisions that define the duration of a probation period for an employee not exceeding six months. An employee is entitled to repatriation costs during this probationary period if he/she does not pass probation. No more than one probation period may apply to an employee for any one employer.
The service contract may be terminated by the employer if the employee demonstrates their incapability of fulfilling the job duties of that role, with a three days’ notice. |
Pension
| Information | Explanation |
|---|---|
| Pension Requirements | Qatar’s government pension system is regulated by the General Retirement and Social Insurance Authority (GRSIA) and supervised by the Ministry of Labor and Social Affairs. The pension scheme is applicable to Qatari citizens and is based on the final salary of the employee at the time of retirement. Employees must pay a monthly contribution of 5% gross salary, while the employer must contribute a further 10%.
It must be noted that foreign workers employed in Qatar are not eligible for pension schemes from the Qatari government and must manage their own arrangements. Qatar does not have any obligatory state or employer-contribution schemes, especially for foreign expatriates. Foreign workers only have access to basic medical facilities and little else. There is increasing pressure on companies to provide corporate pension schemes and to advise foreign workers of arranging private medical insurance for the greatest coverage. |
Payroll
| Payroll | Qatar |
|---|---|
| Management Fee for Employer of Record Services / Monthly Payroll Costs | Shield GEO does not operate in Qatar. |
| Notes | N/A |
| Currency | Qatari Riyal (QAR) |
| Tax | |
|---|---|
| Income Tax Rates | Individual income tax is not imposed on any employee’s salaries, wages and allowances in Qatar. Self-employed individuals are taxed at the CIT rate. |
| Tax Returns Supplied | Shield GEO does not operate in Qatar. |
Payroll and Tax in Qatar
Shield GEO is not operating in Qatar at this time. However, feel free to contact us and we’ll do our best to assist you with your employment needs or connect you with a trusted partner.
Qatar’s payroll and taxation system are unique in that many forms of standardized taxes are not applicable. Income taxes, social security taxes, and sales taxes are not levied for individuals, while corporate income taxes are levied at a flat 10%. Proper care and attention to Qatar tax laws must be given to navigate the taxation system.
| Information | Explanation |
|---|---|
| Remote Payroll | A remote payroll in Qatar is where a foreign company, i.e. a non-resident company, pays a resident employee in Qatar. This applies to both local and foreign employees. One option for a non-resident company to payroll its employees (local and foreign) in Qatar is to use a fully outsourced service like a GEO or PEO which will employ and payroll the staff on their behalf. |
| Local Payroll Administration | In some cases, a company will register their business in China under one of the forms available, (RO, WFOE, or JV) but prefer to have another company administer its payroll. This can be accomplished through a payroll provider. It is important to note that the company, as the Employer of Record, is still fully responsible for compliance with employment, immigration, tax, and payroll regulations. But payroll calculations, payments, and filings can all be outsourced to the payroll provider. |
| Internal Payroll | Larger companies with a commitment to Qatar may wish to run their own local payroll for all employees, foreign and local. In order to accomplish this, they will have to complete incorporation, register the business, and then hire the necessary staff. There will be a need for in-country human resources personnel who have the background needed to manage a Qatari payroll and can fulfill all tax, withholding, and payroll requirements.
This approach carries a significant costs and requires some knowledge of local employment and payroll regulations. The company will need a local accounting firm and potentially legal counsel to ensure full compliance with Qatari employment laws. |
| Fully Outsourced Payroll & Employment | Shield GEO does not operate in Qatar. |
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Setting up payroll in Qatar
| Information | Explanation |
|---|---|
| Currency | Qatari Riyal (QAR) |
Tax Figures
| Information | Explanation | ||
|---|---|---|---|
| Corporate Income Tax | An entity that is wholly or partially foreign-owned by a non-Qatar company that derives income from sources in Qatar is subject to tax in Qatar. This applies to any foreign share of profits generated in a joint venture while in Qatar.
There is a flat Corporate Income Tax (CIT) of 10% for most cases, while no CIT applies to entities wholly owned by Qatari nationals and Gulf Cooperation Council (GCC) nationals. Companies operating in the oil and gas sector are subject to a 35% corporate tax rate |
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| Income Tax Rate |
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| Sales Tax | Qatar does not levy sales taxes or VAT. | ||
| Withholding Tax | Qatar’s tax law requires all entities registered in Qatar with a permanent establishment to withhold a percentage of payments made to non-residents. The withholding tax rates are as follows:
Qatar has entered into double taxation treaties with over 50 countries, where withholding taxes on dividends, interest, and royalties may differ. Entities registered in the Qatar Financial Centre (QFC) are not required to withhold taxes. |
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| Other Tax | Custom duties – Customs duties apply to most goods originating outside of the GCC countries. The normal rate is levied at 5%, although some types of goods attract a higher rate such as tobacco, while some types may be subject to temporary import exemptions.
Property taxes – There are no property taxes in Qatar. |
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| Time to prepare and Pay Taxes | 41 hours | ||
| The time required to start a Business | 8.5 days |
Immigration and Work Permits in Qatar
Shield GEO is not operating in Qatar at this time. However, feel free to contact us and we’ll do our best to assist you with your employment needs or connect you with a trusted partner.
The rules governing the employment of workers in Qatar are governed by law No.14 of 2004 of the Labour Law, administered by the Labour Department of the Ministry of Labour and Social Affairs. For persons intending to work in Qatar, a permanent residency visa and a work permit is required to legally work in Qatar. The employer acts as the local sponsor for the employee and arranges the necessary appointments to obtain both the visa and permit.
Have your own Company
The employment process for Qatar is much more complex than other countries due to the traditional kafala sponsorship system which binds the employee to the employer. Employers hold much more power over the employee in employment matters, where employees must obtain an exit visa and the consent of the employer before terminating their work and leaving the country. In addition, Qatarization places priority of employment to Qatari workers, while non-Qatari workers may only be employed if it is approved by the Labor Department, work permits are issued and if there is a need for such stuff. Careful consideration of these factors must be given prior to hiring employees in Qatar.
Process:
1. Registration of Business with the Immigration Department
The first step is to register the business entity with the Immigration Department of the General Directorate of Borders, Passports and Expatriate Affairs at the Ministry of Interior in order to apply for a work permit. The business entity becomes a worker’s sponsor upon obtaining an immigration card, which expires on the same date as the business’ trade license. A Representative Card must also be obtained so an appointed employee may act on behalf of the company when dealing with the Immigration Department and Ministry of Labour.
The required employer documents are as follows:
- Completed application form for Immigration Card/Representative Card typed in Arabic, stamped and signed
- Copy of passport of all authorized signatories, business owners and representatives
- Copy of the Commercial Registration of the business
- Copy of Trade Licence
- Immigration card (For Representative Card application)
- 2 colour passport-sized photos of representative
Please contact us for a quote.
2. Approval of Ministry of Labour
The business must apply for the approval of the Ministry of Labour for the amount of work permits that will be issued to foreign workers to be used in the following year prior to any hiring. This is done through a block visa application that will be considered by the Labour Department.
The following documents and information must be submitted to the Ministry of Labour by the employer:
- Completed application form in Arabic
- The total number of expatriates to be employed
- Positions of each employee
- Nationalities of the employees
Due to Qatarization laws, the Ministry will consider factors such as the existence of unemployed Qatari nationals who may fill the position and whether the position can only be filled by a foreign national in the process of approving work sponsorship of the company.
3. Employment Visas
It is the responsibility of the employer to obtain an employment visa for each employee that will be hired before he/she enters Qatar. There is a possibility of entry into Qatar of the employee under a visit visa, who can then apply for an employment visa, although work must not commence until the employment visa is acquired. It is the employer who will become each worker’s sponsor.
The following documents and information must be submitted to the Ministry of Labour by the employer to obtain an employment visa:
- Completed application form in Arabic
- Copy of the Commercial Registration of the business
- Immigration card of the business
- Copy of a valid employment contract between sponsoring company and employee
- Copy of the employee’s passport
- Four passport-size photos
Once the employment visa is acquired, a copy should be sent to the employee and the original lodged at the employee’s arrival airport prior to the employee’s arrival into Qatar. Employment visas are generally valid from one to five years.
Time: 2 – 4 weeks
Please contact us for a quote.
4. Work Permit
A work permit must be arranged for within seven working days of the employee’s arrival in Qatar. Usually, this can only be done after an employment arrangement has been agreed upon. Before an application for the work permit is submitted, a medical certificate must be obtained indicating the health of the employee. The employee must take a medical test at a government-approved hospital, and requires a copy of their passport, employment visa, four passport-sized photos and a fee.
Once the medical certificate is issued, an application for a work and residence permit can be applied for, issued for one, two or three years.
The required employer’s documents needed for a work permit are as follows:
- Completed application form from the Ministry of Labour
- Employment contract
- Medical certificate of the employee
- Copy of the Commercial Registration of the business
- Immigration card of the business
- 2 passport-sized photos of the employee
- Copy of the employee’s passport
- Employment visa
- Relevant educational documents
- Biometric fingerprints test
Time: 2 – 4 weeks
5. Residence Permit
Once the employment visa and work permit are approved and copies are sent to the employee, the employee may travel to Qatar and collect the visa and necessary documents from the airport. In addition, a medical check-up and fingerprint scans must be taken. The residence permit application begins now which converts the work entry visa to a residence permit, where the employee may not leave the country. The residence permit application is lodged by the employer and must be commenced within 7 days of arrival.
The Labour Department must approve a dual language English and Arabic local contract under Law No.14 of 2004 in the Labour Law. The employee’s employment documents such as the employment contract must be presented for the application, otherwise other relevant documents such as payroll records and bank statements must be submitted.
The following documents must be submitted by the employer to the Ministry of Labour:
- Completed Residence Permit application for in Arabic and English
- Original medical certificate
- Copy of the Commercial Registration of the business
- Copy of the immigration card of the business
- 2 passport sized photos of the employee
- Original employee’s passport
- Original employment visa
- Sponsor’s passport if employer is an individual
Once the residence permit is issued, the employee may work under the employer until their employment terminates, which must be renewed every few years depending on each case.
Time: Approximately 6 weeks
Please contact us for a quote.
6. Exit Visa
An additional step for foreign nationals employed by a Qatari employer is that they obtain exit permits from the Ministry of Interior before leaving Qatar. The sponsor/employer holds the power to approving an exit permit to employees. The visa is valid for only seven days, and may be a multiple-exit visa.
Please contact us for a quote.
Types of visas in Qatar
| Category | Description of Visa |
|---|---|
| Qatar Tourist Visa | Qatar tourist visas may be obtained on arrival by visas from a selection of 33 countries. The purpose of this visa is for short-term stays for the purpose of leisure. The tourist visa is valid for two weeks and may be extended up to three weeks. A reservation at a hotel in Qatar or a relative residing in Qatar is required to apply and pay for the visa.
A Longer Tourist Visa may be obtained for up to three months’ stay and must be applied for prior at a Qatar embassy prior to arrival. Required documents include: application submitted through a hotel manager, copy of passport, ID card of the hotel, ID card of the applicant. Please contact us for a quote. |
| Qatar Business Visa | The primary purpose of the Qatar business visa is for employees who will travel to Qatar and will work for a Qatari company for a short term. Only government-approved sponsors may sponsor business visas. The business visa is valid for two weeks and may be extended to four weeks. Any stay beyond four weeks requires an exit visa to leave the country. During this period, the employee may engage in limited business activities, but not direct work.
Requirements: The applying company must have prior approval by the relevant departments. The application form must be submitted through a company representative or owner. A copy of the passport of the employee should e provided. The ID of the company and the visa applicant is also needed. Please contact us for a quote. |
| Qatar Work Visa | Qatar work visas are arranged by the employer and are valid for 1 – 3 months. This is most applicable to employees who are intending to work for a Qatari employer for a period of time. To apply for a work visa, the employee must have a valid employment contract in place that must be approved by the Ministry of Labour. The employee must remain with the employer for the duration of work and must leave once the contracted job has been completed, unless there are provisions for the transfer of the employee to another employer.
To obtain the work visa, several medical tests must be conducted, including a blood test, fingerprinting, health check and a chest X-ray. Please contact us for a quote. |
| Qatar Family Visa | Any employee who currently works in Qatar may become a sponsor of their family so they may travel to Qatar and live with the employee. There is no expiration date on a Family Visa and is valid as long as the employee continues sponsoring them. The family sponsor must arrange his/her family’s residence permits in advance.
The following documents must be provided by the sponsor: passport photos of family members, applicable birth, education and marriage certificates, bank statement indicating at least 6 months’ salary worth of funds, and an approval letter from work. Please contact us for a quote. |
| Qatar GCC Resident Visa | Any resident of a Gulf Co-operation Council (GCC) country and are in an approved profession may obtain a one-month GCC Resident Visit Visa through a Qatari embassy. The visa may be renewable for an additional three months. Proof of their profession must be provided during the application of this visa.
Please contact us for a quote. |
Setting up a company in Qatar
When setting up a company you may want to consider these factors:
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Business Factors
Qatar is a relatively restrictive country in regards to foreign investments, in that shareholdings of incorporated entities must have at least 51% shareholdings by Qatari nationals. This is built upon the initiative of “Qatarization”, which intends to place priority of employment and power for Qatari individuals over foreign nationals. As such, it may be a complex and challenging environment to incorporate in Qatar. These factors must be considered, in addition to:
- The industry and type of business that will be conducted
- Nationality of the headquarters / individuals (s)
- Presence of existing trade agreements or relationships
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Location
Location will be another factor. Separate cities and regions may have different rules, costs and availability. Although Qatar is a geographically small country, it is always recommended to seek advice from relevant professionals, such as business or legal advisors, accountants and others depending on your needs.
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Language
Qatar is a relatively multicultural region, with Arabic being the official language of Qatar and Qatari Arabic the local dialect. There is a prominent presence of English as the secondary language, particularly in commerce where there is a growing population of expatriates. Qatar also has a growing community of French-speaking individuals after Qatar had joined the French-speaking organization, La Francophonie in 2012.
Shield GEO is not operating in Qatar at this time. However, feel free to contact us and we’ll do our best to assist you with your employment needs or connect you with a trusted partner.
All foreign companies seeking to incorporate in Qatar must be established under the Foreign Investments Law No.13 of 2000, known as the Foreign Investment Law. Companies must also comply with the amendment of Law No.1 of 2010 stipulating that foreign investments may be made in most sectors in Qatar given their legal presence is registered in Qatar. There are two restrictions placed on foreign companies under the Foreign Investment Law:
- Foreign ownership is restricted to a maximum of 49% of a company’s capital, where at least 51% must be owned by a Qatari partner. This restriction does not apply in certain sectors such as agriculture, industry, healthcare, education, tourism, energy or mining, and does not apply to projects that contribute to Qatar’s development plans.
- Certain types of businesses are restricted, such as investments into banking and insurance which requires approval from the Council of Ministers for each individual case. Foreign investment in commercial agencies and real estate trading is not permitted.
There are several forms of legal entities which foreign companies may incorporate:
- Limited Liability Company (LLC)
- Partnership
- Unincorporated joint venture
- Branch/Representative Office
Branch/Representative Office
Both the branch and representative office are ideal methods for businesses seeking to establish a basic, limited presence in Qatar. A branch is relevant for foreign companies who intend to carry out business activities with a specific purpose or objective in Qatar. The representative office on the other hand is a restricted business presence which only allows marketing and administrative activities to be conducted. For both methods, ministerial approval from the Ministry of Economy and Commerce is required when applying for a branch contract or a representative office license.
Limited Liability Company
The Limited Liability Company (LLC) is one of the most popular methods of incorporation for foreign investors as it requires a relatively small amount of capital and can be established quickly. LLCs are appropriate for many types of foreign businesses in Qatar, although are restricted from engaging in banking, insurance or investment activities for third parties. A newly incorporated LLC is considered as a separate legal entity.
Partnership
A partnership may come in the form of a General Partnership or a Limited Share Partnership Company. The General Partnership is an arrangement where two or more founding members engage in commercial activity in Qatar. Both partners have unlimited liability and the trade name will reflect the names of the partners. In Limited Partnerships, there are one or more joint partners and at least four trustee shareholding partners. The limited partners have limited liability to only what they have invested, while the joint partners have unlimited liability.
Unincorporated Joint Ventures
Unincorporated Joint Ventures (UJVs) involves several parties pooling resources together to jointly control and manage a project. Individual contractors and principals may engage together in a project in Qatar for several reasons:
- The large size and capital requirements of projects in Qatar may be difficult for individual contractors to enter in. Pooling financial and managerial resources will allow these projects to be undertaken.
- High risk projects may distribute the risk among more parties through a UJV.
- A UJV can have a single management team which combines the expertise of members.
Joint Stock Company
A joint stock company can be formed with a minimum of five members. Each member may contribute negotiable shares, and have a limited liability to the extent of their investments. Joint Stock Companies (JSCs) incorporated in Qatar must have all Qatari shareholders, while non-Qatari members may subscribe in capital, particularly those who have foreign capital or foreign expertise.
