Legal Environment

                    The State of Qatar has a modern legal system based on the Sharia (Islam Law).  All the major investment, property rights, legal statutes and codes are very similar to those of neighboring Gulf countries.  Intellectual property rights and foreign investment rights are very attractive for FDI due to their alignment with international law agreements such as the WTO and WIPO.

 
            Intellectual Property Rights

                   Qatar is member of the World Trade Organization and the World Intellectual Property Organisation (WIPO) but it is not a party to the Paris Convention for Protection of Intellectual Property. Protection of trade marks, copyright and patents are largely dependent on Qatar's own national laws and regulations.
                   i) Trademarks Laws: Qatar is not a signatory to the Madrid Convention on trade marks protection. Qatar 's Law No. 3 of 1978 known as "The Law of Trademarks and Commercial Indications" provides for trademark registration and penalties for infringement. The Law allows the Ministry of Finance,   Economy and Commerce to initiate action against trademark/patent violators. The law also permits the Ministry to penalize those who describe products deceptively with respect to their nature, type, kind,   essential properties, origin, and other related aspects such as weight and amount. The law, by and large, allows internationally accepted norms. A trade mark may be registered for a period of 10 years and may be renewed indefinitely for further 10-year periods. However, in practice, protection of trademarks is afforded only by advertising a cautionary notice in Qatar 's daily newspapers. Imports of counterfeit products, including auto spare parts, household items, and clothing accessories into Qatar is quite  common.

                   ii) Patent Laws : Qatar is not a signatory to the Paris Convention on Patent Protection. Patents are   also governed by the 1978 "The Law of Trademarks and Commercial Indications" . As is the case with trademarks, protection is afforded by advertising a cautionary notice in local dailies. Patents are   registered for an initial period of 10 years which can be extended for a further period of five years.

                   iii) Copyright Laws : In July 1995, Qatar issued the long-awaited Law No. 25 of 1995 concerning protection of intellectual property and copyrights. The law, which took effect from October 22, 1996, protects original literary and artistic works, including computer software, video and audio tapes and is enforced by a special agency called the "Bureau of Protecting the Intellectual Property and Copyrights", which has been set up within the Department of Censorship at the Ministry of Information and Culture. The law includes penalties for violation including fines ranging from QR30,000 to QR 100,000 and/or imprisonment ranging from 6-12 months.

                   iv) Trade Secrets : No rules or regulations are available.

                   v) Settlement of Commercial Disputes: Qatar is not a member of the International Center for the Settlement of Investment Disputes (ICSID) known as the Washington Convention and is also not a signatory to the New York Convention of 1958 on the same subject. Qatar, however, accepts binding international arbitration of investment disputes between the Government of Qatar and foreign investors. Resorting to arbitration to solve disputes can be more binding if clearly stipulated in contracts. Effective Qatari laws - Civil and Sharia (Islamic law) - have provided sufficient means for enforcing property and   contractual laws. However, this is a very long and time-consuming process.

          It has been announced recently that the Government of the State of Qatar is likely to review the existing trade mark, copyright and other laws to make them more stricter.

 
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            Foreign Investments
 

                   (i) Openness to Foreign Investment
          Qatar favours market-based economic systems and is committed to free trade in goods and services. It does not impose any restrictions on foreign currency exchange, repatriation of profits or payment for   imports, nor does it impose trade restrictions for BoP purposes. Since foreign finance is an important element for executing development projects in Qatar, especially those related to the liquefied natural gas (LNG), active encouragement is given to local firms and joint ventures with foreign participation. However, in all joint ventures, the stake of foreign partners generally remains within the 49-51% limits.

          It was announced in June 1998 that Qatar will soon issue a set of new corporate and investment laws,   allowing foreign companies to own majority shareholding in local health, tourism and hotel and the small  and medium-scale industrial sectors. At present foreign companies are allowed to take a majority stake only in the exploitation of hydrocarbons and natural resources sector and that too through the issuance of a special Emiri decree. All wholly- foreign owned firms are permitted to operate in Qatar, provided   they have a local agent or a sponsor.

          Foreign-owned firms and the foreign owned portions of joint ventures are subject to corporate tax,ranging from 5 to 35% of net profits. Local and GCC business establishments are exempted from the income tax provisions.

          The incentives offered to foreign companies in Qatari joint ventures include : (a) tax holidays ranging from 5-10 years, (b) cheap electricity and gas, (c) industrial land at nominal rents, (d) no restrictions on transfer of capital and profits, (e) exemption from customs duties on import of raw material, machinery and capital goods and (f) no duties on exports.

                   (ii) Conversion and Transfer Policies: Qatar imposes no restrictions on transfer of funds associated with an investment or on the inflow or outflow of funds for remittances of profits, debt services, capital, capital gains and other returns.

                   (iii) Bankruptcy and Mortgage Commercial bankruptcy and mortgage are governed only by the civil law of Qatar in the absence of any specialised laws. In the case of commercial bankruptcy the person and/or firm involved is officially held responsible for settlement of all debts arising from bankruptcy. However, providing guarantees for various kinds of loans, mortgage liabilities is becoming increasingly common in Qatar.

                   (iv) Expansion of Foreign Equity and Other incentives Foreign investors are not allowed to expand their investment in their joint ventures beyond the limits set        forth in the law except by an Emiri decree. However, this is likely to be reviewed when the Qatari government introduces the new foreign investments laws which are under promulgation.

                   (v) Right to Private Ownership and Establishments Joint ventures involving foreign partners usually take the form of limited liability partnership in terms of the provisions of Law No. 25 of 1990, which controls foreign investment in Qatar. In joint venture partnerships, the equity stake for the foreign investors is limited to 49% while the Qatari partner/s should have no less than 51% stake. Foreign investors are generally not allowed to enter into partnership in a joint stock company with Qatari firms. Foreign partners in contracting ventures organized as limited liability partnership are required to pay the full amount of their contribution to the authorized capital in cash or kind, prior to the start of operations. Generally, such firms are required to set aside 10% of profits each year in a statutory reserve until it equals 50% of the venture's authorized capital.
 
 

Membership of International Organisations Qatar is a member of several International organizations which include :

                                United Nations, UNCTAD, UNESCO, UNIDO, UPU, IMF, International Labour Organisation, World Health Organisation, World Bank, ESCWA, FAO, WIPO, G-77, the Gulf Cooperation Council, IAEA, ICAO, ICRM, IDB, IFAD, IFRCS, IMO, Non- Aligned Movement, ArabLeague, OAPEC, the Organisation of Islamic Countries and OPEC. Qatar also became a member of the World Trade Organization (WTO) on July 27, 1995.

                   Foreign nationals, excluding GCC nationals, are not allowed to own property or invest in privatized public services. However, foreign industrial firms are allowed to own up to 25% in steel, fertilizers and petrochemical industries.

 
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