Qatar has borne witness to investments from tons of foreign businesses over the past years as a global hotspot. Company formation in Qatar has gained significant traction due to the country’s business-friendly laws, tax reforms, quality infrastructure, and so forth.
Before going through with company registration in Qatar, ex-pats must determine whether the business activities are open to foreign investors or not. While the branches of foreign companies can be allowed to operate temporarily, the law is more flexible concerning branches of foreign investment companies (subject to approval from relevant authorities).
In stark contrast to a standard branch office, the IECO or the Qatar International Engineering Consultancy Office serves as a permanent business organization. As a result, the customers need not take away withholding taxes from their payments. Read on to learn more about how IECO works in Qatar.
What Is the Qatar International Engineering Consultancy Office or IECO?
Foreign investors who intend on doing business in Qatar requirements can take their pick from different business opportunities such as setting up a temporary branch in Qatar, opening an IECO, an Incorporated Joint Venture (IJV), Representative Trade Office (RTO), and so forth.
Qatari law defines engineering consultancy services as producing architectural and constructional drawings, designs, diagrams, and survey diagrams; overseeing performance; giving out advice; performing feasibility studies; estimating costs and determining quantities; supervising projects across the engineering profession.
The Qatari law has laid down the requirements under which various engineering consultancy offices can be established. Unlike a temporary branch, the IECO does not have any predetermined lifespan. It is a company branch wholly owned by foreigners and can work on an extensive range of contracts in the engineering sector. Owing to its permanent nature, Qatari customers do not have to deduct any withholding taxes from the payments made to the IECO, given that it can provide a valid tax card.
What Are the Requirements for Setting Up an International Engineering Consultancy Office or IECO?
An engineering consultancy office hoping to provide its services must acquire a license from the Ministry of Municipality and Urban Planning (MMUP). Without authorization from the MMUP, any enterprise working in engineering consultancy will constitute a criminal act. Furthermore, an IECO is a permanent branch of a parent office based in a foreign country. Therefore, it must have practised its consultancy services in the land of origin for at least ten years before setting up an IECO in Qatar.
Foreign companies won’t move forward with the International Engineering Consultancy branch registration unless they possess valid working branches in at least four countries other than where the main office is located. Additionally, the applicant shall submit a list of ten core projects that the main office or one of the four branch offices has achieved in their respective jurisdictions to the MMUP. They should have also earned more than 100,000,000 QR from the previous projects.
An IECO varies from a local engineering consultancy office in Qatar. In the latter’s case, the contribution of Qatari residents or partners to the capital should not be less than 51%, and the non-Qatari partners should be either engineers who have been enrolled with the Register of Engineers or offices rendering their services in the engineering consultancy. Furthermore, a local engineering consultancy office can also be owned and overseen by a natural Qatari person.
What Are Some Restrictions Imposed on the International Engineering Consultancy Office or IECO?
The owner(s) of consultancy offices, the partners, and the engineers working at the office are prohibited from taking part in any of the following activities in the state of Qatar:
- They cannot contract projects or trade-in building materials or other materials concerning the execution of projects of any size or kind in any other profession that directly conflicts with their work.
- A foreign company looking forward to opening a business in Qatar via IECO is prohibited from seeking to acquire any work inconsistent with the ethics or traditions of their profession.
- Finally, they are also prohibited from rendering their services to ministries, governmental agencies, public authorities, and corporations.
THEREFORE, an IECO is a 100% foreign-owned branch that can operate in Qatar and does not have any specific lifespan, unlike a temporary unit. However, IECO company registration in Qatar is subject to certain restrictions. Generally, large and famous multinationals are approved by the relevant authorities in Qatar to register an IECO. If you wish to learn more about similar lucrative business opportunities in Qatar, contact us today!
