Business

Working Hours
The normal work week runs from Sunday through Thursday, with a Friday-Saturday weekend.  Previously, and still the case in most other Middle Eastern countries, the work week ran from Saturday through Wednesday, with a Thursday-Friday weekend.  The one-day shift was made, in part, to allow Doha businessmen to communicate more efficiently with market partners in the West and Far East.  Friday remains a weekend day because it is the Islamic holy day. 

Before heading to a particular business or government office, first check on its operating hours.  Many companies open as early as 7 am, but close between the noon and late afternoon prayers.  In the traditional souqs, doors may not open before 4 in the evening.  Some organisations serving primarily western interests may have weekend work hours to facilitate communications with businesses, clients or home offices in North America.  Mall businesses, major grocery stores, and petrol stations are open during the expected hours; but 24 hour businesses are rare. 

Investments and Saving Opportunities in Qatar
The chances are; if you are reading this, then you are already here in the Gulf and almost certainly enjoying a tax-free salary - maybe for the first time.  This country continues to grow at a phenomenal rate with, a population of under a million prompting the highest per capital income in the world; this is not surprising considering an oil and gas income last year of $407 billion!

Naturally, packages and salaries will vary considerably, but the likelihood is that most individuals will be enjoying a surplus of income over expenditure (you didn’t come to Qatar for the scenery did you?)

Where to invest
Over recent years property has been the mainstay for many investors over the longer term; however recent falls in both domestic and commercial property, throughout most of Europe - and a corresponding fall in the related unit trust investment funds, have prompted many to investigate elsewhere, and in different global locations.

The West Bay area of Doha is currently thriving with opportunities to purchase new and off-plan properties, such as the Pearl, West Bay Lagoon and the Lusail Development.  These are some of the locations in which the expatriate can sink his or her hard-earned cash.  Some offer freeholds with the promise of residency and a high investment yield.  This method of investment on the other hand is not for everyone (or the fainthearted!) and whether or not the Pearl development and others like it are built to schedule and yields the expected returns is yet to be seen.

As for the potential for a ‘self-build’ on the water at West Bay (yes it can and has been done!) remaining plots are well over a million dollars even before the build.  This clearly is not a short term, or something I recommend for the average investor.  For the long term expat that has a young family in school here in Doha and intends on a minimum stay of ten years – then it could be a viable option, but for others, I would discourage this choice of investment.

Thus for those who do not wish to dabble in the property market here, and for the short to medium term investors (3 to10 years) are left with the more usual investment vehicles - the banks for deposit accounts and offshore investment products, namely bonds and fixed term regular savings plans.

With the banks, take your pick, the local banks are well represented here in Qatar, my own experiences with both IBQ and Commercial Bank have proven worthwhile, both proving to be forward thinking and endeavouring to provide the levels of service expected by the discerning expatriate.  At the time of writing (May 2008) the best six month rate on Sterling (other currencies are lower) is 4.5% p.a. However, with the Riyal  ‘pegged‘ to the dollar (follows the rises and fall of the dollar ) every time the U.S. Federal Reserve meet to discuss rate reviews, and with recession hitting and rates falling, local rates will continue to fall also. 

Independent Advisers/Brokers
There are a number of companies in Doha specializing in advising the expatriate saver/investor.  Most are smaller companies, often linked to larger international organizations that will be able to offer a wide range of policies for both the regular saver and those with a lump sum to invest.  Whilst Independent advice is a lot more important in the UK, Europe and the US (with such a large number of providers) it is still important to have your adviser working on your behalf as the client rather than any financial institution that he/she represents.
 

At least three of the major international offshore insurance companies offer their products and services in the Gulf, all of which have slightly different contracts.

It would therefore be the adviser’s job to help determine which is best for their client.

Any of these offerings will help the expat Investor to:

• A)  Maintain the tax-free status of their savings
• B)  Help the regular saver to meet long term aims for their children’s further education
• C)  Meet interest only mortgage commitments or longer term retirement needs

All the providers who market in Qatar are based in the channel islands, namely the Isle of Man, Jersey and Guernsey and as such all have “designated status”.  This means all the highest levels of regulation and consumer protection based on the UK regulatory structure, but without the taxation.

This then brings us to an important point.  The retail sector (i.e. business that is not corporate) and is unregulated.  The QFC (Qatar Financial Centre) Regulatory Authority is an independent body and has been established to regulate firms here in Qatar that conduct financial services in or from the QFC.  They are fully aware of unregulated businesses, but as yet do not have the resources to initiate a regulatory program.  They are predicting a working structure by 2009 which will mean a similar regulatory structure to that in effect in the UK, as they are already using the UK model.

Thus there is no compliance imposed on the adviser, no fact-finding requirement, and no ombudsman.  So my advice would be to choose your adviser carefully.

There are a number of good advisers here in Doha!  Many with 15 to 20 years of experience, qualifications and commitment to ongoing service, coupled with the unbiased independent status.

Choosing a good adviser would be a safe bet.  Ideally they should be a resident of Qatar (not those who trip in and out on multiple entry visas) and somebody who intends to be around for the longer term, and likely to stick with you over the coming years, whilst you see your investment/savings through to maturity.

Once you have reached your decision, the products available offshore are increasing all the while, including pension products - International SIPP’s and QROPS that can give even greater flexibility and tax advantage than those available back home.  You also have the added benefit of all the savings products of which we spoke earlier and of course all the life insurance and protection products and in most instances the tax advantages are impossible to better.
Finally, whilst working offshore, the temptation may be to increase your living standard accordingly, but the shrewd investor can make the proverbial killing with the right advice and the commitment of a good quality adviser.

In a nutshell, that is the essence of a decent advisers job is to make sure the expatriate worker returns home or retires abroad, fully benefiting from his/her time overseas rather than just “splashing the cash”.

(Courtesy Jonathan Dymond - PFS Cert, Office Manager, OIB International - Qatar)

Doha Securities Market (DSM)
Founded in 1997, the Doha Securities Market or DSM is the national stock market of Qatar and had its first day of operation on May 26, 1997 with seventeen listed companies.  Since then, the DSM has moved from manual administration to the use of an electronic circulation system in March 2002, and its chief function is to provide the local population an opportunity to invest in the growing Qatari economy.  Since August 2002 non Qataris have been allowed to invest in mutual funds, and to buy or trade in specific companies including Qatar Telecom (Qtel) and Al Salam International Investment.  These restrictions were lifted in 2005 as non Qataris are allowed to trade in all securities listed on the DSM at less than 25% of the total number of traded shares. 

The market’s governing authority is in the form of the Market Committee, whose members serve three year terms at the nomination by the Minister of Economy and Commerce or by appointment of the Council of Ministers.

At the end of the first quarter in 2008, the DSM listed forty two companies covering a range of businesses including industry, banking, services, and insurance.  For all companies listed on the DSM there is access to general company information, history of corporate actions, and current and past financial statements, all available as research tools for potential investors.  Official publications such as the annual report and investor reports serve to keep the public fully informed about all the business related aspects of the DSM which is another goal of the organization, to educate and disseminate investment related information to the general public and improve the general investment climate in Qatar.
 

Types of businesses established in Qatar
The commercial company Law No. 5 of 2002 governs the rules and regulations for establishing a business in Qatar and classifies several types of business enterprise.

Limited Liability Company (LLC)
The limited liability company is an association having a minimum of two and maximum of 30 partners. Each partner is liable only to the extent of his/her share in the company's capital, and the term limited liability together with the capital must be mentioned on all letterheads and correspondence. The capital of a limited liability company must not be less than QR200,000 ($55,000), divided into equal shares of a nominal value of QR10 ($2.75) or more each.

Public Shareholding Company (PSC)
Public shareholding companies should be established in accordance with the commercial companies law and by virtue of a ministerial decree. Shares are offered to the public and only Qataris may be shareholders in such companies with three exceptions:

• Where the company is incorporated under a special decree which allows for foreign shareholding.
• Where a shareholder is a national of another Arab country which has a reciprocal agreement with Qatar allowing Qataris the same privileges in that country.
• Where there is a need for foreign capital or experience, provided a licence from the Ministry of Economy and Commerce is obtained.

The minimum capital of a public shareholding company is QR10m ($2.75m) and the nominal value of each share in a public shareholding companies is QR10 ($2.75) each. A closed shareholding company requires a minimum of QR2m ($550,000) in capital.

Partnership
A general partnership company is an association of two or more persons formed under a specific name in order to carry out commercial business. It is a separate legal entity, but its partners are jointly and severally liable for its obligations. A foreigner may be a partner in a Qatari partnership company subject to the restrictions of the Commercial Companies Law No.25 of 1990.

Partnership in Commendum
A partnership in a commendum, company is similar to a general partnership, but it also has non-active partners with limited liability. The law governing this partnership is the same as the one governing general partnership's obligations only to the extent of their share in the capital. The names of non-active partners may not be included in the name of the partnership.
 
Commendite Partnership By Share
A commendite partnership by Share Company is a partnership formed between joint partners and 10 or more non-active shareholding partners whose liability is limited. The minimum capital of a commendite partnership by share company is QR200,000 ($55,000).

Joint Venture
A joint venture consists of two or more parties formed to carry out certain businesses and do not acquire separate legal status. It does not have to be registered in the commercial register, nor does its existence have to be made public. The joint venture should specify its objectives, the rights and obligations of the partners and the methods of distributing profits and losses among those partners.

Branch
A branch of a foreign company may be registered in Qatar to execute certain contracts or to carry out certain operations after obtaining the required ministerial decision issued allowing non-Qatari persons or companies to be engaged in contracting business in accordance with the provisions of Commercial Companies Law No. 25 of 1990. Furthermore, foreign companies or persons may invest in Qatar in business activities relating to the development of the economy or to support the public services and utilities in the country relating to industry, agriculture, minerals, mining, utilities or tourism, subject to obtaining the required ministerial decision.

Representative Office
A foreign company can open a representative office in Qatar. The representative office is similar to a branch with the exception that it cannot do businesses in Qatar. Its head office will wholly own the representative office.