Lately, Hamad Alyafei law firm has started receiving numerous inquiries in regard to the lately delivered Law No.1 of 2019 which was issued by His Highness Sheikh Tamim Bin Hamad Al -Thani, the Emir of Qatar. The law regulates foreign capital investments in the economy.
It has been clearly noticed that the aforementioned law was issued as a concrete step to attract more foreign capital and foreign direct investment by promoting economic development in several if not all activities, whether in economic, or commercial areas. Moreover, these regulations align with the ambitions of the Qatari Vision 2030 regarding social, economic, humanitarian, and environmental sectors. The law aims to bolster the country’s confidence and investment security index as it presents a wide choice of opportunities to invest in, with easy access to the Qatari market.
Apart from the general features of this law that makes investing in Qatar more attractive, the next lines shall address the second section in both the previous investment regulation Law No. 13 of 2000 as well as the recently proclaimed No. 1 of 2019 law as an attempt to highlight the main differences in the process of obtaining a permit to invest in Qatar while owning 100% of the investment shares as a Non-Qatari investor.
Both laws agree on the definition of a Non-Qatari investor in the first Article as “a person who invests his/her money in any of the projects authorized for direct investment in accordance with the provisions of the given law.” In addition, both laws outline the Non-Qatari capital as “money, in-kind investments, or rights held by Non-Qatari investors.”
In regard to the procedure of permitting the investments of Non-Qatari investors, the legislator has significantly altered the procedure of obtaining investment permissions for 100% – Non- Qatari investment/ownership. Both old and new laws have imposed the same procedures and criteria regarding Non – Qatari investors for shares up to 49%. However, the old law was keen to set a high-profile standard for the procedure of obtaining the permission to invest while owning a 100% of the shares as a Non-Qatari investor.
The process of obtaining permission was a case-by-case-procedure, left to the discretion of The Trade and Commerce Minister who would render decisive decisions that could not be reconsidered or appealed. Taking into account that by the given law, Non-Qatari investors with a 100% ownership of shares were only allowed to operate in some exclusively listed investment sectors. Whereas in the new regulation, the legislator was eager to stress on allowing foreign investors owning 100% of the shares in one explicit Article, that is “to invest in all sectors according to later issued executive directives of this law.”
Moreover, the new legislation is considered to ease the process with more transparent and with a simpler, transactional way. As per the new law, the process can be conducted by submitting a filled pre-printed application form before engaging in competent authority processes. The authority shall, then, decide on this application in a matter of 15 days, knowing that in case the applicant receives no response in such a period, the application shall be deemed rejected. However, the investor is entitled to a semi-appeal chance in case the application was rejected by the competent authority. The process of reconsidering a decision shall be conducted by filing a grievance before The Minister of Trade and Commerce. Bearing in mind that the applicant has only 15 days to submit a request starting from the date on which the application deemed rejected, whether impliedly, or explicitly.
The new law has given foreign investors a wide range of choices in regard to the sectors of investment. Still, it is worthy to mention that both laws have prohibited 100% Non-Qatari Capital Investment in sectors such as commercial agencies, banks, and insurance companies. However, the new law states that this law is binding “unless those sectors are exempted by a decision of the Council of Ministers.” Accordingly, in certain cases, and upon a decision from the Council of Ministers, the investors can be allowed to invest while maintaining 100% shares of ownership in those sectors, as well as any other sectors announced by the Council of Ministers.
To conclude, law No. 1 of 2019 clearly shows a legislator’s tendency to become a more investment-friendly, that is also as per the incentives which are given to the foreign investors and are to be addressed soon in our next articles.
Hamad Alyafei Law Firm