Qatar has in place Law No. 25 of 2004 regarding the control over concealment of Non-Qataris’ practise of commercial, economic and professional activities in violation of the Law (“Proxy Law”). The Proxy Law has been amended by Law No. 27 of 2005 and more recently further amended by Law No. 3 of 2023.
Pursuant to the Proxy Law, non-Qataris may not practice any commercial, economic or professional activity except where permitted by law and it is prohibited for any person to assist any non-Qatari by enabling him by any means whatsoever to perform any commercial, economic or professional activity in violation of the Proxy Law.
Under the latest amendment to the Proxy Law, payment of dividend to each party (that is a shareholder in a company) is required to be in accordance with the profit distribution percentage set forth in the memorandum of incorporation of a company. Contravention of the Proxy Law would lead to fines and criminal penalties being imposed and additionally courts can order the closure or suspension of any business activity and confiscation of the goods which is in breach of the Proxy Law, publish the text of the court sentence in newspapers, deport the non-Qatari offender from Qatar and prevent the violator from practicing the activity in Qatar for upto three years from the date of completion or lapse of the penalty. The Qatari and non-Qatari party shall be jointly liable for all fees, taxes and other liabilities resulting from the practice of such activity.
How Al Tamimi & Company can help?
Al Tamimi & Company is well positioned to provide bespoke advice on matters such as identifying key risks in any current shareholder arrangements and agreements vis-à-vis the Proxy Law and how to best resolve such issues.
Key Contacts
Ahmed Jaafir
Partner, Head of Corporate Structuring - Qatar
a.jaafir@tamimi.com
Samiya Mitha
Senior Associate
s.mitha@tamimi.com