Qatar’s employment landscape is governed by Labor Law No.14 (2004) which provides minimum standards on working hours, vacation and public holidays, safety standards, collective agreements, worker committees and employment termination regulations. Certain employees in Qatar are not covered by the Labor Law, including Ministerial workers, members of the armed forces, and those in domestic employment.
Employers entering the Qatari labour market must be aware of the government’s initiative of “Qatarization”, which seeks to provide preferential employment to qualified Qataris in the public and private sectors.
Many companies in Qatar also adhere to religious holidays and work practices which should be observed or respected by any foreign workers and companies.
Qatar’s payroll and taxation system is unique in that many forms of standardized taxes are not applicable. Income taxes, social security taxes and sales taxes are not levied for individuals, while corporate income taxes are levied at a flat 10%. Proper care and attention to Qatar tax laws must be given to navigate the taxation system.
The rules governing the employment of workers in Qatar are governed by law No.14 of 2004 of the Labour Law, administered by the Labour Department of the Ministry of Labour and Social Affairs. For persons intending to work in Qatar, a permanent residency visa and a work permit is required to legally work in Qatar. The employer acts as the local sponsor for the employee and arranges the necessary appointments to obtain both the visa and permit.
Qatar is a relatively restrictive country in regards to foreign investments, in that shareholdings of incorporated entities must have at least 51% shareholdings by Qatari nationals. This is built upon the initiative of “Qatarization”, which intends to place priority of employment and power for Qatari individuals over foreign nationals. As such, it may be a complex and challenging environment to incorporate in Qatar. These factors must be considered, in addition to:
Companies entering Qatar must make a decision whether to use their own resources for a Do-It-Yourself (DIY) approach, or to use a Global Employment Organization to handle payroll and employment responsibilities. A GEO or Qatarian Employer of Record solution makes it faster, easier and cheaper to deploy staff if they don’t have an Qatarian entity established that can run payroll.
A DIY approach will typically be delayed until there is a properly incorporated company ready to run payroll and may be a costly option. Shield GEO can deploy foreign staff in 4-6 weeks and local staff in 48 hours. Additionally Shield GEO is responsible for all compliance issues related to the employment.
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Shield GEO pays the employee on a monthly basis, typically on the last working day of the month although we can adapt to your preferred schedule. Income tax and social security (where applicable) are deducted at source and paid to the local tax authorities.
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An entity that is wholly or partially foreign owned by a non-Qatar company which derives income from sources in Qatar is subject to tax in Qatar. This applies to any foreign share of profits generated in a joint venture while in Qatar.
There is a flat Corporate Income Tax (CIT) of 10% for most cases, while no CIT applies to entities wholly owned by Qatari nationals and Gulf Cooperation Council (GCC) nationals. Companies operating in the oil and gas sector are subject to a 35% corporate tax rate
Qatar does not levy and sales taxes or VAT.
Qatar’s tax law requires all entities registered in Qatar with a permanent establishment to withhold a percentage of payments made to non-residents. The withholding tax rates are as follows:
Qatar has entered into double taxation treaties with over 50 countries, where withholding taxes on dividends, interest and royalties may differ.
Entities registered in the Qatar Financial Centre (QFC) are no required to withhold taxes.
Custom duties – Customs duties applies to most goods originating outside of the GCC countries. The normal rate is levied at 5%, although some types of goods attract a higher rate such as tobacco, while some types may be subject to temporary import exemptions.
Property taxes – There are no property taxes in Qatar.