Transparency of the Regulatory System
The World Trade Organization recognizes Qatar’s legal framework as conducive to private investment and entrepreneurship and enabling of the development of an independent judiciary system. Qatar has taken measures to protect competition and ensure a free and efficient economy. In addition to the National Competition Protection and Anti-Monopoly Committee, regulatory authorities exist for most sectors in the economy and are mandated with monitoring economic activity and ensuring fair practices.
Nonetheless, according to the World Bank’s Global Indicators of Regulatory Governance, Qatar lacks a transparent rulemaking system, as government ministries and regulatory agencies do not share regulatory plans or publish draft laws for public consideration. An official public consultation process does not exist in Qatar. The 45-member Shura Council (which statutorily is obligated to have 30 publicly-elected officials, but in practice is comprised solely of direct appointees by the Amir) must reach consensus to pass draft legislation, which is then returned to the Cabinet for further review and to the Amir for final approval. Laws and regulations are developed by relevant ministries and entities. The text of all legislation is published online and in local newspapers upon approval by the Amir. All Qatari laws are issued in Arabic and eventually translated into English. Qatar-based legal firms provide translations of Qatari legislation to their clients. Qatar’s official legal portal is http://www.almeezan.qa
Each approved law explicitly mandates one or more government entities with the responsibility to implement and enforce legislation. These entities are clearly defined in the text of each law. In some cases, the law also sets up regulatory and oversight committees made of representatives of concerned government entities to safeguard enforcement.
Qatar’s primary commercial regulator is the Ministry of Commerce and Industry (formerly the Ministry of Economy and Commerce). Commercial Companies’ Law 11/2015 necessitates that public shareholding companies submit financial statements to the Ministry, in compliance with the International Financial Reporting Standards (IFRS) and the International Accounting Standards (IAS). Publicly-listed companies must also publish financial statements at least 15 days before Annual General Meetings in two local newspapers (in Arabic and English) and on their websites. All companies are required to keep accounting records, prepared according to standards promulgated by the IAS Board.
The Qatar Central Bank (QCB) is the main financial regulator that oversees all financial institutions in Qatar, per Law 13/2012. To promote financial stability and enhance regulation coordination, the law established the Financial Stability and Risk Control Committee, which is headed by the QCB Governor. According to the Law 7/2005, the Qatar Financial Centre (QFC) Regulatory Authority is the independent regulator of the QFC firms and individuals conducting financial services in or from the QFC, but the QCB also oversees financial markets housed within QFC. QFC regulations are available at http://www.qfcra.com/en-us/legislation/ .
The government of Qatar is transparent about its public finances and debt obligations. QCB publishes quarterly banking data, including on government external debt, government bonds, treasury bills, and sukuk (Islamic bonds).
International Regulatory Considerations
Qatar is part of the GCC, an economic regional union, notwithstanding an ongoing diplomatic rift with three GCC member states. Laws based on GCC regulations must be approved through Qatar’s domestic legislative process and are reviewed by the Qatari Cabinet and the Shura Council prior to implementation.
Qatar has been a member of the WTO since 1996 and notifies the WTO Committee on Technical Barriers to Trade (TBT) with draft technical regulations. Qatar is a signatory to the Trade Facilitation Agreement (TFA) and has implemented 92.9 percent of TFA commitments to help expedite the movement and clearance of goods and improve cooperation between customs authorities and other appropriate authorities on trade facilitation and compliance issues.
Legal System and Judicial Independence
Qatar’s legal system is based on a combination of civil and Sharia Islamic law. The Constitution takes precedence over all laws, followed by legislation and decrees, and finally ministerial resolutions. All judges are appointed by the Supreme Judicial Council, under Law 10/2003. The Supreme Judicial Council oversees Qatari courts and functions independently from the executive branch of the government, per the Constitution.
Qatari courts adjudicate civil and commercial disputes in accordance with civil and Sharia laws. International agreements have equal status with Qatari laws; the Constitution ensures that international pacts, treaties and agreements, to which Qatar is a party, are respected and taken into account. Qatar does not currently have a specialized commercial court; domestic commercial disputes are generally settled in civil courts. Decisions made in civil courts can be appealed before the Court of Appeals, or later the Court of Cassation.
Companies registered with the Ministry of Commerce and Industry are subject to Qatari courts and laws—primarily the Commercial Companies’ Law 11/2015—while companies set up through QFC are regulated by commercial laws based on English Common Law and the courts of the QFC Regulatory Authority, per Law 7/2005. The QFC legal regime is separate from the Qatari legal system—with the exception of criminal law—and it is only applicable to companies licensed by the QFC. Similarly, companies registered within the Qatar Free Zones have specialized regulations.
Laws and Regulations on Foreign Direct Investment
In the past year, the Amir enacted Law 1/2019 on Regulating the Investment of Non-Qatari Capital in Economic Activity and Law 16/2018 on Regulating Non-Qatari Ownership and Use of Properties. These laws are aimed at encouraging greater foreign investment in the economy by authorizing, incentivizing and protecting foreign ownership.
The Ministry of Commerce and Industry’s Invest in Qatar Center is the main investment promotion body. It has a physical “one-stop-shop” and an online portal. Preference is given to investments that add value to the local economy and align with the country’s national development plans. For more information on investment opportunities, commercial registration application and required documentation, visit: https://invest.gov.qa
Separate laws and regulations govern and protect foreign direct investment at the Qatar Financial Centre (http://www.qfc.qa/ ), the Qatar Free Zones (https://fza.gov.qa/ ), and the Qatar Science and Technology Park (https://qstp.org.qa/ ).
Competition and Anti-Trust Laws
Certain sectors are not open for domestic or foreign competition, such as public transportation and fuel distribution and marketing. Instead, semi-public companies have complete or predominant control of these sectors. Law 19/2006 for the Protection of Competition and Prevention of Monopolistic Practice established the Competition Protection and Anti-Monopoly Committee in charge of receiving complaints about anti-competition violations. The law, however, exempts state institutions and government-owned companies.
International law firms with 15 years of continuous experience in their countries of origin are allowed to set up operations in Qatar, but can only become licensed if Qatari authorities deem their fields of specialization useful to Qatar (the Cabinet may grant exemptions). Cabinet Decision Number 57/2010 states that the Doha office of an international law firm is allowed to practice in Qatar only if its main office in the country of origin remains open for business.
Expropriation and Compensation
Under current legislation (Law 1/2019 and Law 16/2018), the government protects foreign investment and property from direct or indirect expropriation, unless for public benefit, in a non-discriminatory manner, and after providing adequate compensation. The same procedures are applied to expropriated property of Qatari citizens. Law 13/1988 covers the rules of expropriation for public benefit.
In 2018, there were four expropriation-related Cabinet decisions. Expropriation is unlikely to occur in the investment zones in which foreigners may purchase or obtain rights to property, although the law does not restrict the power to expropriate in these areas.
ICSID Convention and New York Convention
Qatar has been party to the 1958 New York Convention since 2011 and a member of the International Center for the Settlement of Investment Disputes (ICSID) since 2002. Qatar enforces foreign arbitral decisions concluded in states that are party to the New York Convention.
Investor-State Dispute Settlement
If investment disputes occur, Qatar accepts binding international arbitration. However, Qatari courts will not enforce judgments or awards from other courts in disputes emanating from investment agreements made under the jurisdiction of other nations.
International Commercial Arbitration and Foreign Courts
The Qatar Financial Centre (QFC) features an Alternative Dispute Resolution (ADR) center. Although primarily concerned with hearing commercial matters arising from within the QFC itself, the QFC intends to expand the court’s jurisdiction to enable it to accept other disputes at its discretion. The Qatar International Court and Dispute Resolution Center adjudicates disputes brought by firms associated with the QFC in accordance with British common law.
Qatar’s arbitration law (Law 2/2017) based on the United Nations Commission on International Trade Law (UNCITRAL) gives Qatar’s International Court and Dispute Resolution Centre the jurisdiction to oversee arbitration cases in Qatar in line with recent local and international developments. The purpose of this law is to stimulate and strengthen Qatar’s investment and business environment.
There is no set duration for dispute resolution and the time to obtain a resolution depends on the case. The Qatar International Court and Dispute Resolution Centre publishes past judgments on its website (https://www.qicdrc.com.qa/the-courts/judgments ).
In order to protect their interests, U.S. firms are advised to consult with a Qatari or foreign-based law firm when executing contracts with local parties.
Two concurrent bankruptcy regimes exist in Qatar. The first is the local regime, the provisions of which are set out in Commercial Law 27/2006 (Articles 606-846). The bankruptcy of a Qatari citizen or a Qatari-owned company is rarely announced and the government sometimes plays the role of guarantor to prop up domestic businesses and safeguard creditors’ rights. The Qatar Central Bank (QCB) established the Qatar Credit Bureau in 2010 to promote credit growth in Qatar. The Credit Bureau provides QCB and the banking sector with a centralized credit database to inform economic and financial policies and support the implementation of risk management techniques as outlined in the Basel II Accord.
The second bankruptcy regime is found in the Qatar Financial Centre (QFC) Insolvency Regulations of 2005 and applies to corporate bodies and branches registered within the QFC. There are firms that offer full dissolution bankruptcy services to QFC-registered companies.