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Qatar’s efforts to develop its tourism sector can be easily seen through its efforts in attracting investments in several aspects of the tourism sector, including the investment in travel agencies, where there are currently 332 licences issued for companies providing travel related services.
The Ministry of Economy and Commerce of Qatar has recently set out rules for investing in travel business, in order to promote the growth of this sector and achieve Qatar National Vision 2030, which is aimed at establishing a diversified and competitive knowledge-based economy.
The permitted services of travel offices, as defined by law, include services related to selling and issuing of travel tickets, facilitation of luggage transfers, reservation of seats in regular transport, carrying out exchange of passenger’s transportation, and any other related businesses and services. In order to perform the services of travel offices, a licence must be obtained from the Civil Aviation Authority of Qatar. The application for such a licence must be accompanied with the following:
The establishment of travel offices is governed by the general rule of doing business in Qatar, as stipulated under the Foreign Investment Law (Law No. 13 of 2000), where such business cannot be carried out in Qatar without 51 per cent of the capital of any enterprise being owned by Qataris. However and as an exception, it is permitted for GCC nationals (whether individuals or companies fully owned by GCC nationals) to own up to 100 per cent of companies in the field of air travel offices in Qatar, without the need for a Qatari partner(s).
Under the provisions of the Proxy Law (Law No. 25 of 2004, concerning Combating Concealment of Non-Qatari Practice in Commercial, Economic, and Professional Activities in Contravention of the Law), and in particular Article 1 of the Proxy Law, it is a criminal offence for a non-Qatari to be engaged in any commercial, economic, or professional activity within Qatar, unless legislative exclusions are available. Article 2 of the Proxy Law provides that Qataris may not assist foreigners in carrying on the activities set out in Article 1.
Taking into consideration the restrictions under the Proxy Law, there are some schemes used in Qatar that are believed to be legal and within the provisions of the Foreign Investment Law and the Proxy Law. Such schemes could include:
It is worth mentioning that these structures have been successfully used in Qatar, but to date have not been tested in courts. However, foreign investors should note that there should be no legal agreements that make provisions for the non-Qatari national to ‘own’ any or all the shares of the Qatari national, and consideration should be given by the non-Qatari national to maintain levels of assets at minimal levels, using equipment leases and the like whenever suitable.
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