The World Bank Doing Business Report (2013) ranked Qatar 48th out of 189 economies. Qatari performance in paying tax is the second best in the world and that of dealing with construction permits and getting electricity are also favourable. Qatari nationals are not subject to any kind of corporate or income tax, although they are required to pay approximately 2.5 per cent of profits as Zakat (an Islamic obligation to donate a certain portion of wealth to charitable cause). However, foreign investors are subject to taxation on their investment income. The 2010 tax law imposes a 10 per cent flat rate for all non-Qatari companies and foreign partners in Qatari companies, except for the energy sector where a 35 per cent tax rate applies to oil and gas operations, unless exempted by Amiri Decree. In 2014, Qatar eliminated certain requirements associated with the corporate income tax return and eased the paying of tax for companies. Qatar’s investment liberalization policies are proceeding on a gradual basis, based on a desire to protect local companies from rapid competition. Before 2010, companies were required to have a Qatari partner as a sponsor, who holds at least 51 per cent ownership. Then, the 2010 Foreign Investment Law permitted up to 100 per cent of foreign ownership in specific sectors such as agriculture, health, education, tourism, and energy. In early 2013, the Qatari government issued a new draft company law according to which, there would be no minimum capital requirement for setting up a company unlike the present law requiring at least QAR 200,000.
|The Business Environment: Doing Business