Transferring Shares in a Qatari Limited Liability Company: What Foreign Investors Need to Know

6 min 42 sec

Written by

Asad Ullah Khan

Associate

as.khan@tamimi.com View LinkedIn Profile

Joyce Abi Abboud

Associate

j.abboud@tamimi.com

Qatar’s investment climate has shifted significantly in recent years. The Foreign Investment Law (Law No. 1 of 2019), together with its Executive Regulations (Ministerial Decision No. 44 of 2020), opened the door for non-Qatari investors to own up to 100% of a limited liability company incorporated under the Ministry of Commerce and Industry (MOCI) in most economic sectors. Banking, insurance, and commercial agencies generally remain off-limits absent requisite approvals. But for the vast majority of sectors, the legal framework is welcoming. Increasingly, foreign buyers are looking to acquire stakes in mainland limited liability companies rather than setting them up from scratch.

What follows is a practical walkthrough of the share transfer process for a mainland Qatari limited liability company incorporated under the Commercial Companies Law (Law No. 11 of 2015, as amended) and supervised by MOCI. This is distinct from acquisitions within the Qatar Financial Centre or Qatar Free Zones, which operate under separate regimes. The focus here is on the nuts and bolts: what documents you need, which government bodies must approve the transfer, and how long each step actually takes.

Preparing the ground: Documents and corporate approvals

Before any government filing can happen, the parties need to assemble a substantial document package. For the buyer – particularly a foreign corporate entity – this means producing and attesting its constitutional documents: its certificate of incorporation, certificate of incumbency, memorandum of association, and any certificates reflecting name changes. Each of these must be notarised in the buyer’s home jurisdiction, legalised through the relevant governmental chain, authenticated by the Embassy of Qatar in that country, and finally attested by Qatar’s Ministry of Foreign Affairs (MOFA). The same attestation chain applies to the seller’s corporate documents if the seller is also a foreign entity.

Powers of attorney deserve special attention. The short-form share purchase agreement (SPA) must ultimately be signed in person before Qatar’s Ministry of Justice (MoJ). If a director or shareholder cannot physically attend to this in Doha, a power of attorney (POA) must be granted to a local representative – and that POA must travel the full legalisation route described above.

In practice, this attestation process takes two to four weeks from a jurisdiction like the UK. For countries without a resident Qatari embassy, it can take considerably longer, since in that case it will have to be done through the Qatari embassy of the nearest jurisdiction.

On the corporate side, a shareholders’ resolution of the target company must be issued to approve the sale of shares, printed on the company’s letterhead and signed by the existing shareholders. The buyer will need its own board resolution approving the purchase, which must also be notarised and attested. An amended memorandum of incorporation (MOI) should be drafted in advance to reflect the post-transfer shareholding structure, ready for submission once the transfer completes.

One requirement that often catches foreign buyers off guard is the ultimate beneficial owner (UBO) form. Qatar requires disclosure of the natural person who ultimately controls the purchasing entity. The UBO is determined by reference to three tests, applied sequentially:

1. any natural person directly or indirectly owning 20% or more of the capital or voting rights;
2. any natural person exercising actual control over the company’s executive bodies; and
3. if neither of the above can be identified, the legal representative of the company.

The UBO form must be signed by the UBO personally or by the company’s listed manager. Unlike the other corporate documents, it does not require attestation, but the original is required.

The regulatory approval sequence

This is where the process becomes distinctly Qatari. The transfer of shares in a mainland company requires a series of government approvals, including the following.

1. General Tax Authority

The process begins with a submission to the General Tax Authority (GTA) to obtain approval for the share sale. The draft SPA (unsigned) is submitted as part of the application. Before the GTA will consider it, the target company must be fully tax-compliant: all tax declarations and audited financial statements since the company’s inception must have been filed, and any outstanding tax liabilities must be settled.

The seller is also required to file a capital gains tax return through the Dhareeba portal within 30 days of the disposal. Capital gains tax applies at a flat rate of 10% on gains from the direct transfer of shares in a Qatari company.

Once satisfied, the GTA issues a Non-Objection Certificate. The timeline here depends entirely on the target company’s compliance history – a company with clean books may clear in days, while one with outstanding filings can face weeks of remediation.

2. Ministry of Labour

With the GTA clearance in hand, the next stop is the Ministry of Labour, which must stamp or approve the draft SPA. The target company must not have any pending labour court cases filed against it, and there must be no block imposed on its licences. A copy of the company’s immigration card (Computer Card) is typically required. This step usually takes one to two working days.

3. Ministry of Commerce and Industry

After obtaining approvals from both the GTA and the Ministry of Labour, the draft SPA is submitted to MOCI for its approval stamp. If the acquisition will result in foreign ownership exceeding 49%, a separate application under the Foreign Investment Law must be filed and approved by MOCI at this stage – or, ideally, well in advance. MOCI’s processing time is generally one to two working days, though activity corrections or amendments to the target company’s trade licence can result in a longer process.

4. Ministry of Justice

The draft SPA is then submitted to the MoJ’s online portal. The MoJ typically takes two to three working days to approve the application. Once approved, the authorised representatives of the buyer and seller must attend the MoJ in person to sign the short-form SPA. Authentication follows on the same day or the next.

Prior to this, any sector-specific approvals would also need to be obtained, along with any merger control filings in case the applicable law requires such filings to be made prior to the transfer of shares.

Merger control is governed primarily by the Competition Law (Law No. 19 of 2006) and is enforced by the Competition Protection and Anti-Monopoly Committee (CPAMC). Parties to an M&A transaction should assess at an early stage whether the proposed transaction triggers merger control requirements, particularly where it may result in an economic concentration capable of affecting competition in the Qatari market. There are no fixed thresholds set by the law or imposed by CPAMC in practice, but once the general criteria are met, the transaction may require prior notification to and approval from the CPAMC before completion.

CPAMC assesses whether the transaction is likely to create or strengthen a dominant position or otherwise substantially affect competition, taking into account factors such as market shares, barriers to entry, and the potential impact on consumers. In practice, competition filings should be factored into the transaction timetable, as closing is generally conditional upon obtaining any required regulatory approvals. Accordingly, competition law analysis forms an important component of legal due diligence and transaction planning in Qatari M&A deals.

The short-form SPA signed before the MoJ is a standardised template – deliberately brief. It records the transfer of shares, the parties, and the consideration, but it does not contain the detailed representations, warranties, indemnities, or conditions precedent that would appear in a conventional acquisition agreement. Those terms live in the long-form SPA, which is a private contract between the parties, typically governed by the parties’ choice of law (often English law or Qatari law, depending on the transaction). The long-form SPA is fully enforceable as a contract, but it is not the document presented to the Qatari authorities.

In effect, signing before the MoJ functions as closing. By the time the parties attend, all regulatory conditions have been satisfied. This makes the Qatari process a compressed “sign and close” model for purposes of the official transfer, though the long-form SPA may have been signed (or at least agreed in final form) weeks earlier.