What are some of the common legal challenges investors face when coming to Qatar?

An emerging market like Qatar naturally has some legal challenges. Probably the most important obstacle for investors wanting to establish a business in Qatar is the requirement that foreign firms establish a joint venture with Qatari partners, and that the foreign ownership in the joint venture not exceed 49%. Sometimes regulations are not widely published and are at times enforced with little or no consultation with the private sector. In addition, rent is increasing rapidly given the growth of the economy and the influx of foreign workers into Qatar. In addition to that, The Foreign Investment Law places two main restrictions on foreign investors who wish to establish a legal presence in Qatar: (1) The percentage of foreign ownership permitted; Law No. 13 of 2000 (The Foreign Investment Law) says that a Limited Liability Company's capital must be contributed by a Qatari investor with a percentage not less than 51 %, Limited Partnership with Shares with a percentage not less than 51%, and Unincorporated Joint Venture with a percentage not less than 51% of capital must be contributed by the local partner, and as for Joint Stock Company (Public or Private), 75% of the money must be contributed by a Qatari partner, and for a Single Person Company, 100% must be contributed by a Qatari investor. (2) In terms of the types of business in which foreign investors can invest, The Ministry of Economy and Commerce is officially responsible for giving authorization, which is normally determined on a case-by-case basis. Finally, tobacco and manufactured tobacco substitutes are subject to a customs duty of at least 100%. The QSTP free zone does not impose import duties. As with many GCC states, the importation of pork is prohibited and the importation of alcohol is severely restricted.
Qatar ranks number one in the world in terms of paying taxes according to the World Bank's Doing Business report. How would you assess the tax regulatory system in Qatar and why is it world leading?

The tax regulatory system in Qatar is the most favorable in the world, according to the 2009 Forbes Tax Misery and Reform Index, which ranked countries in terms of the harshness of their tax regimes—those employed in Qatar pay no tax on income obtained from their employment. Qatar has made paying taxes easier for companies by eliminating certain requirements associated with the corporate income tax return. Under the 2009 Tax Law, Private firms established in Qatar pay tax on their taxable profits at a flat rate of 10%. Qatari companies wholly owned by GCC nationals are exempt from corporation tax. However, the profits of business establishments that are wholly owned by Qatari individuals are not taxed. Qatar Financial Centre (QFC) entities are subject to the separate jurisdiction of QFC and a 10% corporation tax on taxable profits—there is no tax exemption for any share in the profits to which a local shareholder is entitled. The standard rate of customs duties (standardized across the GCC) is 5% of the total amount of the goods and their associated insurance and shipment costs. According to the Doing Business report, Qatar ranks number one in the world for paying taxes with 99.44%. On average, firms make four tax payments annually, spending 41 hours a year filing, preparing, and paying taxes, and pay total taxes amounting to 11.30% of profit.
In your opinion, what are some of the most important changes that should be made in the near to mid term to make Qatar a more attractive business environment for investors?

There are some important changes that should be made to make Qatar a more attractive business environment. For example, the general requirement for a company (subject to certain exceptions) is to be owned 51% by a Qatari shareholder. Restrictions on foreign ownership of Qatari companies are contained in the Foreign Investment Law and that law remains unchanged, which doesn't simplify the process and adds a number of requirements that would be time consuming. By contrast, for a local investor establishing a business in Qatar, the process can be quicker and easier given the absence of certain requirements that would otherwise be required of foreign investors. In addition to that, we should also note that the new law does not make any changes to the incorporation of companies in the QFC or the Qatar Science & Technology Park, both of which have their own separate incorporation regimes and rules. Finally, the new law makes no change to the relatively attractive existing tax regime. Essentially, LLCs that are 100% Qatari owned do not pay tax, whereas LLCs that have foreign ownership will have their profits taxed at the rate of 10% on the share of the foreign investors' profits.