In light of ongoing advancements to the legislative framework governing foreign investment in Qatar, HH Sheikh Tamim Bin Hamad Al-Thani promulgated two new laws: Law No. 6 of 2017 Concerning Trading Activities by GCC Nationals (“Law No. 6”) and Law No. 7 of 2017 Permitting the Registration of GCC Branches (“Law No. 7”), each aimed at promoting intra-regional trade. Law No. 6 permits GCC investors to practice retail and wholesale activities under less restrictive conditions, whilst Law No. 7 allows GCC companies to register branches in Qatar.
Law No. 6 has amended provisions of Law No. 7 of 1987 on the rules of practicing commercial activity by GCC citizens in the State of Qatar, introducing changes that encourage GCC individuals and entities to practice retail and wholesale activities in the Qatari market.
Article 2 of Law No. 6 permits natural persons to practice retail and wholesale activities provided that the proprietor is accountable in his personal capacity for the management of the Qatar based business and its branches. The Ministry of Economy and Commerce has been granted discretion to waive this requirement in exceptional cases. Additionally, Law No. 6 permits legal persons that are fully owned by GCC nationals to practice retail and wholesale activities without the prior requirement for a Qatari partner to hold at least 50% legal equity.
Prior to Law No. 6, natural persons were required to meet three conditions: (i) to be a resident of Qatar; (ii) to personally undertake the trading activity; and (iii) be limited to only one trading activity (i.e. only trade in electronics or only trade in apparel) and one outlet. These conditions no longer apply under the new law.
Furthermore, Article 5 of Law No. 6 permits GCC traders to practice retail activities through more than one store or licensed branch. Read with Law No. 7 this suggests that, pursuant to permitting GCC companies to set-up branches in Qatar, GCC traders may practice retail activities by opening Qatari branches of their retail companies which are licensed in another GCC state, without the need to establish a separate legal entity in Qatar.
As for Law No. 7, in order for a GCC company to register a branch in Qatar it should have been registered in a commercial register of one of the GCC countries for a period of no less than three years. Additionally, the GCC company should be fully owned and at least partially managed by GCC nationals. The Minister of Economy and Commerce may grant an exemption to these requirements. Lastly, the branch may only engage in those activities in which GCC nationals are permitted to practice in Qatar.