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Commerce Law

05 Jan, 2023
Topic: Business and Finance
Intended Audience
Visitor: Student, Tourist, Business Owner
Citizen: Parent, Business Owner, Employee
Resident: Parent, Employee

Commerce Law

There are general rules for setting up and operating a company in Qatar. These are laid out clearly in the Commercial Companies Law No.11 of 2015 For example, a company must be Qatari owned; it must be headquartered in Qatar.

The company can take different forms depending on its size, relationship between participating entities, and desired structure – either singular, as part of a larger group, or within a holding company. Accepted types of companies allowed to operate in Qatar include:

- Joint Liability Company.

- Limited Partnership.

- Joint Venture Company.

- Public and Private Shareholding Company.

- Partnership Limited by Shares.

- Limited Liability Company

The Commercial Companies Law outlines all required documentation, procedures and conduct required of the company. In all matters involving written legal contracts, the language used must be Arabic and the Arabic version of a contract will always take precedence over the English translation.

The companies mentioned above represent different types of business partnerships, including the following:
- Joint Liability 

A Joint Liability Company comprises two or more partners who are jointly responsible for the liabilities of the company. Each partner possesses the power to conduct commercial business under the name of the company. However, no partner is allowed to practice on his/her own or another's account without first getting approval from the other company partner or partners.

Profits and losses and the share of each partner therein shall be determined at the end of the company's fiscal year based on the balance sheet and profit and loss account.

Each partner is considered a creditor of the company with his share in the profits once this share is determined by approving the budget.
- Limited Partnership

Limited partners, on the other hand, are only liable on debts incurred by the company to the extent of their registered investment. They have no management authority.

As for the partnership limited by shares, it is a company consisting of two categories of partners: the joint partners, who manage the company and are jointly responsible for all its obligations in their own funds, and the limited partners, who contribute to the capital of the company.

- Shareholding 

Companies formed through a shareholding arrangement must first be approved by the Ministry of Commerce and Industry prior to the company being established.

The basic criteria are as follows: the shareholding company's capital should be distributed to negotiable shares of equal value; the number of shareholders cannot be fewer than five.

In addition, an elected board of directors will be responsible for managing the shareholding company. The number of board members should be between five and 11 members. Each board member can be elected more than once unless stipulated otherwise in the statute of the company. Each board member should not exceed a term of three years in office, except for the first board of directors, the term of membership may be five years.

- Limited Liability 

According to Qatari law, this company consists of one or more persons, and the number of partners shall not exceed fifty persons. No partner shall be liable except to the extent of their share in the capital, and the shares of the partners therein shall not be tradable securities.