Employment & HR in Qatar

Have you been dreaming of becoming your own boss while drudging at your typical nine-to-five job? You surely must have a cool business idea that makes you sound so confident? If you aren’t sure enough about whether the idea would work or not, you must dig into the matter to grasp the potential of the idea. Else, it might turn into a fiasco as well.
Starting a business, truly, isn’t an easy thing to plan and accomplish. Not only do you need to become familiar with the domain deeply in which you are about to step into your venture but also with the laws, obligations, requirements, and formalities one has to observe. Are you thinking of Qatar to locate your business? Well, the country is indeed full of opportunities for new businesses that are entertaining the prospects of becoming the world’s leading business and financial center. Qatar has high living standards, while its business environment is amicable, welcoming, and favorable to natives and ex-pats alike. The government strongly supports the ventures. However, you need to prepare yourself to crawl and leap through bureaucratic hoops and humps.
Nonetheless, you may ease your journey by knowing the process, requirements, and other qualifications needed to establish a business. Here, we have it all covered for you. Let’s dive in, pronto!

Quick Overview

First off, prepare a business plan that has the power to convince investors and clarifies the mission and vision of your business. You will need certain documents, namely, commercial registration, trade license, computer card, and tax card, which are mandatory. Now, start by getting your company name registered with the Ministry of Economy and Commerce. Thereafter, create the Articles of Association and the Memorandum of Association for your company. Then, these documents would be verified by the Ministry of Justice in Qatar. Once you get the approval from the Ministry of Justice, head on to apply for the trade license and tax card. To do this, you must have an office space designated to carry out the business activities. After procuring a trade license, you need to apply for the Computer Card, which allows you to operate your venture in Qatar. Now, set up a business bank account, deposit minimum share capital, and there you go!

Process of setting up a business in Qatar

Setting up a business comes out a remarkable deal, thanks to the economic and political stability of the country, highly developed infrastructure, and one of the lowest corporate tax rates worldwide. When planning to start a business, one must set to conduct deep research on the business idea to understand its marketability and profitability. If you are an ex-pat, it is highly important to grasp what the business culture of the country looks like, to see how and to what extent you could adapt to it, and to know the taxations in Qatar. We shall now walk you through the process of starting a business in Qatar with all the details and requirements you must know. Read on!

• Prepare a solid business plan: Never underestimate the power of a convincing business plan. A comprehensive business plan clarifies the purpose, reveals the weakness in your strategy, states your mission and vision, and helps you gauge the profitability of your business idea. Furthermore, it will help you grab investors for your company, and thus, you get more opportunities to grow and thrive.

• Choose a company name: To incorporate a business in Qatar, choose a name that is unique and compelling. Before selecting one for your business, you must do some research and check its availability. You can then register the name at the ministry’s application. If you are booking your business name for three days, you won’t be charged any buck; however, booking it for six months comes with a cost of QAR 1000.

• Choose a legal structure of the business: The Commercial Companies Law of Qatar mentions it as a mandatory requirement for a business to have a headquarters in the country. In Qatar, you may choose from the following entities.

1. Equities Partnership Company
2. Joint Company
3. Limited Liability Company
4. Limited Partnership Company
5. Shareholding Company
6. Self-employed or Freelancer
7. Particular Partnership Company

• Set up a checking account: The next step is to set up a checking account when starting a business in Qatar. You will need to procure a letter from Qatar’s Ministry of Commerce and Industry to establish a foreign-owned entity. That letter is used to state the permission for opening a checking account in the country. To get your checking account activated, you would have to wait for at least 1 to 2 business days.

• Prepare the Articles of Association: As soon as your checking account is active and ready, you need to procure a sanction on the Articles of Association. To get the approval, you need to head to the Ministry of Business and Trade. The process takes about a day to complete. The Articles of Association form needs you to fill in the following mandatory details:

1. Company name
2. Company headquarters address
3. Limitations on share transfers (solely for companies)
4. Nationalities, place, and names of shareholders (solely for companies)
5. Methods of profit and loss distribution between the partners
6. Names of individuals running a business.
7. Purpose and terms of the corporate
8. Summary of actions and share capital

In addition to these papers, you may be asked for other documents depending upon the type of your business.

• Register the company with the Chamber of Commerce: Although registering with the Chamber of Commerce is not mandatory, but it is worthwhile. To do this step, you need to file an application which must be signed by the manager of corporate. The documents you will need are:

1. General Manager ID card copy
2. Economic registration certificate
3. Id card copies of partners, shareholders, and corporate owner
4. FORM of commercial registration
5. Authentic Certificate of Incorporation (in case of foreign companies)

• Make a company seal: Private entities in Qatar need to form a corporation seal in Qatar. This is another crucial step when incorporating a business into the country. The process demands QAR 100 for forming a stamp/ seal. The MBT checks whether the company owns a stamp or not, so get it done.

• Procure a trade license: A Trade license is a critical requirement to establish and operate a business legally. The licenses are approved by the Ministry of Economy and Trade. You may face a hard time during the process; thus, it is recommended to consult experts on the subject.

Hiring Employees in Qatar 

After getting your venture established and legally recognized, you can take a sigh of relief. Right? Not yet! Now comes the time for recruiting people to manage the different operations of your company. No doubt, you would keep your tabs on the most talented ones so you get the best value for your investment. However, apart from seeing into the skills, expertise, and competency of the person, you need to regard other things as well.
There are some laws and rules that govern the process of hiring, recruiting, and managing employees, which are stated clearly in the Employment and Labor Acts of every country. Experienced consultants at Zimyo can certainly help you acquire the best talent in a hassle-free manner.
Here are the obligations you must know before you take up the responsibility of being an employer, and thus, avoid having a run-in with the law. Read on!

• Trial Period/Probation Period: In article 39 of the Labor Law of Qatar, the employment contract can mention a probation period that cannot surpass six months in duration. Under the same employer, the employer cannot be subjected to a probation period more than once. The employer has the liberty to terminate the contract during the trial period if the employee is found incompetent for the assigned role. However, in the case of termination during the probation period, the employer must notify the person at least three days in advance.

• Leave and Holidays: Article (79) of the Labor Law of Qatar clearly states the entitlement of an employee to a paid annual leave which must not be less than 3 weeks for an employee working with the company for less than five years. At the same time, employees who have been employed in the company for more than five years must receive a fully paid annual leave of 4 weeks. The employer needs to fix and mention the date of annual leave for the employee corresponding to the work requirements. Upon the employee’s consent, the employer can also divide the leave into no more than two periods. If a person takes sick leave for up to 2 weeks in a row, he would be paid full wages, while the contract would be terminated if the sick leave goes on for 12 weeks continuously.

• Maternity Leave: According to the Labor Law of Qatar, Article (96), a female employee is entitled to receive full-paid maternity leave if she has been in the employment relationship for a year. This leave includes the time before and after childbirth, given that the period following child delivery must not be less than 35 days. The Muslim employees in Qatar, according to Article (83) of the Labor Law, are entitled to get paid leave for pilgrimage once during the service period.

Maternity leave is subject to a medical certificate allocated by a licensed clinician, which states the expected date of childbirth. If the remaining portion of maternity leave is less than 30 days, a female employee must be allowed a complimentary leave from the job from the annual leave. Else, the complimentary leave period would be deemed an unpaid leave. In case the female employee has difficulty in resuming work after the maternity leave has expired, she must be granted unpaid leave, provided that this period does not exceed 60 days in a row.

• Termination of Services: As per Article (51) of Qatar’s Labor Law, the employee can terminate the contract before its expiration date arrives in the case of a definite term contract. Moreover, an employee is entitled to end of service gratuity in the following circumstances:

1. In case the employer infringes the obligations mentioned in the contract or under the law provisions.
2. In case the employer or some manager commits an immoral act or physical assault upon the employee or any of the family members.
3. In case the employer or his/ stand-in misled the employee when establishing an employment contract regarding the terms and conditions stipulated in the contract.
4. In case continuance of the job poses any risk to the health and safety of the person, given that the employer knows the perils and disregards any necessary steps to eliminate it.

The employment contract cannot be ended in the following cases as per Article (53) of the Labor Law of Qatar:

1. Employer’s death, unless the employment contract was sealed for consideration associated with the professional activities of the employer or the employer, culminates upon the employer’s death.
2. Transferring the enterprise’s ownership or merging the enterprise to a person other than the employer for whichever reason.

An employer may terminate the contract without notice or without paying end of service gratuity in the following cases:

1. Worker feigns nationality or identity or submits fake documents or certificates.
2. Suppose an employee commits an act that triggers financial loss to the employer. In this case, an employer has to notify the Department in which the incident took place within 24 hours.
3. If the employee breaches the obligations mentioned in the employment contract more than once and repeatedly, it threatens the safety of the employer and other workers.
4. If the employee fails to perform the assigned duty despite the notice.
5. If the employee is found in a state of drunkenness or under the influence of narcotic drugs during working hours.
6. If an employee commits an assault on an employer’s person, manager, or supervisor during the working period.
7. If an employee assaults his colleagues despite the warnings.
8. If an employee takes unnecessary and unexplained leaves from work fr over 7 days or 15 days in a year.
9. If an employee is sentenced for a crime related to dishonesty or immorality.

• Pension: The pension system in Qatar is overseen by the Ministry of Administrative Development, Labor, and Social Affairs and administered by the (GRSIA) General Retirement and Social Insurance Authority. Any individual who is a citizen of Qatar and has made a contribution of a total of 15 years is entitled to a pension as they turn 60 or 55 years old. A person may even opt for early retirement. Nonetheless, the requirement of 15 years of contributions remains intact. Pension size is contingent on the salary of the employee at the time of retirement. Extra social allowance benefits may be provided as well, depending on the term of service and a final salary of an individual.

• Work Hour Norms: The standard workweek in Qatar is 84 hours per week, where a working day is of 8 hours except in the month of Ramadan. During Ramadan, working hours are reduced to 6 hours per day and 36 hours per month. The interval for refreshments, lunch, and prayer is included in the working hours. Such intervals should not be less than 1 hour and more than 3 hours. Workers may take up overtime work given that the overall working hours per day do not exceed ten hours.

For overtime work, employers must pay a regular wage to the employee with an addition of 25% of the basic wage to it. In Qatar, workers must be allowed a weekly rest period which falls on Friday in the country except for shift workers. However, shift workers must not be asked to work on over two Fridays in a row.
How easy is it to conduct business in Qatar?
Qatar has been ranked at 77th position in the Ease of Doing Business index and scored 68.7 out of 100, according to the Doing Business report 2020. What’s the Doing Business report and the EODB index, and why does it matter here? To begin with, the Doing Business report is prepared by the World Bank Group. The initiative intends to analyze 190 economies on different factors that play a part in rendering ease or hassle to the process of starting and running a business. Some indicators it considers are getting electricity, paying taxes, enforcing contracts, trading across borders, procuring permits, and more. The ranks of a specific economy in these sub-indices are then used to calculate its overall EODB (Ease of Doing Business) index position and score. The higher the rank in this index, the more conducive an economy is for starting businesses and ventures. Let’s now see where Qatar lies in different sub-indices to get the picture clear. Read on!

• Starting a Business: Starting a business isn’t done in a snap. You must go through various procedures and pay fees for different documents. You can either get it all done without facing many hassles or dragging hard throughout the process. Doing Business gauges how hard or easy it is to conduct a business in a country by measuring the cost, time, and procedures involved in establishing a business. In this sub-index, Qatar got 108th rank among 190 countries and scored 86.1 out of 100. In 2012, the country combined its commercial registration and registration with Qatar’s Chamber of Commerce as the one-stop-shop, thereby making the process of starting a business easier.

• Managing Permits: Permits and licenses are the permissions to establish and run a business legally. The kind of permits you need depends upon the activity and operations which your business will undertake. The Doing Business considers the cost, time, and formalities involved in the process of procuring permits. And Qatar in this sub-index came at 13th position among 190 countries and scored 83.6 out of 100, according to the Doing Business report 2020.

• Getting Electricity: You can’t imagine starting a business, leave alone the dreams of seeing it thrive without electricity. Thus, getting electricity is considered a potential EODB indicator by the Doing Business. It measures the time, formalities, and costs involved in securing a connection of business to the electricity grid. Moreover, it also estimates the tariff transparency and reliability of the supply of electricity in a country. According to the Doing Business report 2020, Qatar came at the 48th position among 190 countries and scored 83.6 out of 100. In 2016, the country streamlined the external works and invested in the subcontractors, thereby expediting the process of getting an electricity connection.

• Getting Credit: Businesses solicit credit and funding to grow, expand their reach, meet the overheads and business outgos, recruit more staff and employees, etc. How easily you can carry out a business in a country depends on this factor as well. Thus Doing business looks into the efficiency of movable collateral laws and the cost, time, and procedures involved in getting credit. According to the Doing Business report 2020, Qatar got 119th position among 190 countries and scored 45 out of 100. In 2012, the country initiated the distribution of historical data and did away with the minimum threshold for procuring loans contained in the database, thus, improving its credit information system.

• Managing Payroll: What’s better than seeing your business flourishing, into which you’d put all your heart and soul? However, in addition to bringing more status and power, it invites you to fulfill greater responsibilities, such as that managing more employees. You need to pay them on time which isn’t possible without a proper payroll management system. Having such a system incorporated in your entity will support you not only in reimbursing staff payments on time but also in paying taxes, social security contributions, etc., while abiding by the laws. You may choose the most reliable payroll management services from Zimyo for a hassle-free experience.

• Paying Taxes: If your business has gained the eligibility to pay taxes, you need to do that. There’s no other way around it. To pay taxes, you must go through certain procedures, fulfill certain criteria, and invest your time. According to the Doing Business report, Qatar bagged a covetable position which was 3 among 190 countries, and scored a whopping 99.4 out of 100. In 2014, Qatar eliminated specific requirements that were associated with the process of returning corporate income tax, thereby rendering the process easier.

• Enforcing Contracts: Enforcing Contracts is one of the EODB indicators which the Doing Business measures. Here, it probes the time, outcome, procedures, and costs involved in the process of resolving a commercial dispute. Furthermore, the efficiency of court systems and the power of legal regulations are also assessed to gauge this factor. Qatar got 115th rank in this sub-index, according to the Doing Business report 2020, and scored 54.6 out of 100.

• Resolving Insolvency: Qatar’s rank in this sub-index, according to the Doing Business report 2020, was 123 among 190 countries, and it scored 38 out of 100. To estimate the strength of this indicator, the Doing Business looks at the efficiency of the legal framework and strength of regulations in resolving insolvency effectively. It also looks into the cost, time, recovery rate, and formalities involved in resolving commercial insolvency.

Qatar’s stable and highly developed economy, advanced infrastructure, the unmatched pool of skilled workers, and tax incentives render it an attractive destination to base a business. The best business to start in Qatar that enjoys the most scope is Interior Designing business, It-related business, Maintenance services, Delivery Business, Fitness center, Financial services, Import business, Cookies & Biscuits Manufacturing business, and more. All in all, Qatar emerges as a virtually perfect location when it comes to starting a business. However, you need to brace yourself up to grapple with the red tape involved in the process.
Zimyo is a leading HR and Payroll management services provider in Qatar with multiple years of experience. The company helps businesses hire the best talent and takes care of the financial requirements of employees, such as advances or credit for a hassle-free work experience.