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Such a branch will only be entitled to perform the specific
contract in respect of which it has been registered and the
registration would usually lapse on the completion of that
contract. The Qatar registered branch will be fully taxable
under the Tax Law (except to the extent of any Qatari or other
GCC interest therein) unless a special tax exemption is granted
or otherwise applicable.
Unlike the previous law, the current Foreign Investment Law
makes no express mention of the requirement for the foreign
company to appoint a Services Agent who/which must be a Qatari
individual or 100% Qatari-owned entity. It should be noted,
however, that this position is different in the area of engineering.
4.1.6 Representative office
In 2003, the Minister of Economy and Commerce announced that
under the Executive Regulations foreign companies may open
representative offices without a local partner. Such offices
are really 'shop windows' to source business - they can promote
a foreign company in Qatar and try to introduce it to Qatari
companies/projects. However, the representative office may
not contract to do business in Qatar: this has to be done
by either a foreign entity (in relation to contracts which
could be performed substantially outside Qatar), or otherwise
by one of the other entities permitted under the Foreign Investment
Law. As such offices are not carrying out commercial activities,
as such, in Qatar they are therefore not subject to taxation.
4.1.7 Agency / Distribution / Franchise
As with its predecessor, the (relatively) new Commercial Agency
Law No (8) of 2002 (the Agencies Law) defines a
commercial agent broadly as a person who has sole permission
to distribute or sell goods and products or to provide services
within the scope of agency on behalf of its principal for
profit or commission. The width of this definition is such
that the Qatar Civil & Commercial Court (the
Court)'s application of the Agencies Law cannot be predicted
with any certainty. Further, decisions of the Court are not
published and there is, in any event, no doctrine of binding
precedent in Qatar. Bearing this in mind, given a quite recent
Appeal Court decision which dealt with distributorship arrangements,
it would however be expected (though could not, of course,
be guaranteed) that the Court would draw a distinction between
a "franchisee" or a "distributorship"
on the one hand and a "commercial agent" on the
other. The importance being that a "commercial agency"
which is registered on the Commercial Agents' Register at
the Ministry of Economy and Commerce is afforded the protection
of the Agencies Law. Both the Foreign Investment Law and the
Agencies Law provide that a commercial agent must be a Qatari
national or a 100% Qatari-owned company.
The Agencies Law effectively requires that a commercial agency
in Qatar must be exclusive. However, it does provide that
traders registered in the Importers Register may import commodities,
which the agency includes, even if these products have local
agents. Further, it provides that an appointed local agent
is entitled to receive commission of up to 5% (decided by
Ministerial Decision) of the commodities or products which
are imported by others for the purpose of trade (ie not personal
use or re-export) and which does not originate from the principal.
In relation to exclusivity, while Qatar as a sales territory
is indivisible, a principal may appoint different agents for
different product lines.
The Agencies Law also deals with early termination and non-renewal
of limited duration agreements and termination of unlimited
duration agency agreements.
4.1.8 Services Agent
This type of agency consists of appointing a Qatari entity
to act as a service agent for a foreign company, and should
not be confused with commercial agency as discussed above.
It is likely that the foreign company (and, perhaps, the Qatari
party) would not wish this type of agreement to be considered
a commercial agency and registered as such (and therefore
afforded the protection of the Agencies Law). Although the
service agency used to be a common business practice in the
region, it is no longer required in order to do business in
Qatar. Foreign companies should, therefore, determine if appointing
a service agent is beneficial in their specific circumstances.
If a foreign company chooses to have a service agent, it
may be advisable to appoint such an agent on a project-by-project
basis, since the local agent may be very well connected in
some sectors or tenders, but not in others.
4.2 Distribution and Sales Channels
Most Qatari trading entities represent a variety of foreign
firms in the local market. To maximize their market penetration,
German firms planning to appoint a Qatari agent should ensure
that the latter does not represent any competitor. Numerous
food importers are also wholesalers, distributors and retailers.
A handful of large local companies still dominate the market.
4.3 Franchising and Direct Marketing
This is another promising sales channel for German goods and
services in the Qatari market. Qatari entities have a strong
interest in investing in franchises, due to the ease of readymade
business plans. However, most major fast food franchises are
already established in the market.
4.4 Selling Factors and Techniques
German suppliers should stress the competitive price, high
quality, and, if applicable, the new-to-market status of their
products. Initial face-to-face contact with importers will
significantly increase a company's business prospects. Qatari
companies distributing foreign products usually request marketing
and advertising assistance from the principals to introduce
a new product to the market or to improve sales of existing
products. Regional food shows are very useful mechanisms for
locating and establishing business relations with local distributors.
4.5 Product Pricing
There is a large variety of local and foreign products in
the Qatari market. Local consumers are very price conscious
and actively seek out sales and promotions. Local distributors
of international products often engage in promotions in order
to attract consumers and gain market share. German firms should
work closely with their local distributor in order to determine
appropriate pricing strategies. The average importer markup
on food products is about 10-15%. Retail food prices are generally
25-30% above import prices.
4.6 Advertising and Trade Promotion
Many advertising practices in the local market will be familiar
to German firms. The most common forms of advertising are
media announcements, billboards, and flyers. Local distributors
generally develop advertising strategies in coordination with
their principals. Several private advertising firms are equipped
to handle promotional activities, which require prior approval
of the Ministry of Municipal Affairs and Agriculture.
4.6.1 Media
Most newspapers in Qatar, including three Arabic and two English
dailies, have a large readership. These include the following:
4.6.1.1 Arabic
A l - S h a r q:
P.O. Box 3488 | Doha, State of Qatar
Phone: +974 466-1354 | Fax: +974 466-2462
Email: alsharq1@al-sharq.com | Website:
www.al-sharq.com
A l - W a t a n:
P.O. Box 22345 | Doha, State of Qatar
Phone: +974 466-0810 | Fax: +974 466-4206
Email: alwatan@qatar.net.qa | Website:
www.al-watan.com
A l - R a y a h:
P.O. Box 533 | Doha, State of Qatar
Phone: +974 446-6618 | Fax: +974 432-0080
Email: edit@raya.com | Website:
www.raya.com
4.6.1.2 English
G u l f T i m e s:
P.O. Box 2888 | Doha, State of Qatar,
Phone: +974 446-6621 | Fax: +974 435-0474
Email: editor@gulf-times.com | Website:
www.gulf-times.com
T h e P e n i n s u l a:
P.O. Box 3488 | Doha, State of Qatar,
Phone: +974 466-3945 | Fax: +974 466-3965
Email: penqatar@qatar.net.qa | Website:
www.thepeninsulaqatar.com
The state-owned Qatar Radio and Television Corporation operates
Qatar Television (QTV) and the radio station Qatar Broadcasting
Service (QBS). QTV, comprising Arabic and English channels,
broadcasts prerecorded commercials. QBS also carries advertisements.
The locally operated pan-Arab satellite channel Al-Jazeera
receives some public funding but is independently owned and
operated. It also broadcasts advertising for local and regional
companies and products. There are no private radio stations.
Qatar Broadcasting Service (QBS)
P.O. Box 1414 | Doha, State of Qatar
Phone: +974 849-4222 | Fax: +974 482-2888
Qatar Television
P.O. Box 1944 | Doha, State of Qatar
Phone: +974 486-4575 | Fax: +974 486-4511
Al-Jazeera Satellite TV Station
P.O. Box 23123 | Doha, State of Qatar
Phone: +974 488-5666 or 489-4801 | Fax:
+974 488-5333
4.7 Sales Service and Customer Support
In general, after sales service and customer support is the
responsibility of the local distributor. As a Qatari entity
must obtain a license for all imports, local firms generally
maintain a supply of spare parts for distributed products.
Local distributors may also establish workshops for after
sales support, as appropriate. Foreign principals often provide
regional and international training for technical support
staff.
4.8 Trade regulations
 Practically
all imports into Qatar require an import license. A person
wishing to import goods for sale must be registered on the
Register of Importers and approved by the Chamber of Commerce.
Individual importers may only be Qatari nationals; corporates
must be wholly Qatari-owned except where an exemption to this
requirement in recognition of a substantial foreign investment
has been approved. The standard import tariff is 4%, but a
number of basic commodities and consumer goods, such as wheat,
flour, rice, grains, tea, coffee, sugar and powdered milk,
are exempt from duty. In other cases, where protection is
needed for Qatari industries, higher rates apply:
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