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GCC firms 'no longer need local partner' in Qatar

Qatar court clarifies company rules for operating in the country after construction vs contractor case comes to a close

Doha, Qatar.
Doha, Qatar.

A ruling by Qatar’s highest court, the Court of Cassation, means GCC companies can conduct business in the country without the need for a local partner.

The Court ruled that companies could conduct economic activities “in the areas of industry, agriculture, animal resources, fisheries and contracting”. Establishing a business in the country still requires a partnership to get going, but the need for a local partner expires five years into the relationship – and companies are free to go their own separate way.

The GCC’s Unified Treaty, introduced in 1983, allows for foreign companies to conduct business in Qatar but had to “share their business with Qatari nationals with not less than 25% quota in the business.” After five years, that quota is dropped and the foreign company is free to operate as a Qatari company without further restrictions.

The ruling comes after a drawn out court case between an unnamed Kuwaiti contractor and local construction company made it to the Court of Cassation after first being heard in the country’s lower Court of First Instance five years ago.

The court upheld decisions made by the Court of First Instance and Court of Appeal, ruling in favour of the Kuwaiti contractor who had been awarded USD107,000 and a further USD20,000 in damages.

 

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