The Qatar Financial Center Authority ("QFCA") Tax Department has given a Concession Statement of Practice (the "Explanation") accommodating an exception to Qatar Financial Center ("QFC") organizations performing contracts in the safeguard and security area in the State of Qatar.
The plan behind the Statement is to offer safeguard and security organizations occupied with huge undertakings in Qatar the motivation to utilize the QFC as their foundation.
The exception will be conceded to organizations that satisfy the accompanying meaningful models, notwithstanding a couple of regulatory measures recorded in the Statement:
- The applicant is a validly established QFC entity engaged in licensed activities;
- Applicant submits a written confirmation from the Ministry of Defense, the Ministry of Interior or any other competent defence or security agency, confirming the existence of "a contract for the benefit of the mentioned ministries or agencies and (b) the said contract has a strategic and/or confidential nature";
- Core income-generating activities contemplated by the contract are carried on in Qatar;
- Applicant employs at least five full-time qualified employees residing in Qatar; and
- Applicant's operating expenses exceed USD 1,000,000 per accounting period.
Companies meeting the criteria may apply for the exemption starting with the 2021 tax year—this sprouts new opportunities for investors looking to form a company in Qatar.
In the previous two years, the QFC has found a way to situate itself as the favoured objective in the State of Qatar for organizations in the safeguard and security area. Therefore, the Statement is another indication of the QFC's proceeding with the obligation to develop the aviation, network protection, guard and security areas in Qatar.
Qatar Financial Centre History and Mission
The Government of Qatar initially settled the QFC to give a stage to interest in Qatar and in other extending economies in the locale, with a specific spotlight on monetary administrations, resource the board, protection and reinsurance.
Organizations that direct exercises that are ordinarily perceived as comprising monetary administrations, or exercises on the side of monetary administrations business, can be set up inside the QFC. The QFC has its different organization guidelines, Qatar Financial Center Regulations No. 2 of 2005 (QFC Companies Regulations).
The QFC, as of late, widened the extent of exercises that are allowed to be completed by organizations framed under its ward to incorporate a more extensive scope of consultancy administrations, remembering those that fall for the innovation and protection areas.
Learn more about the QFC (Qatar Financial Centre) on our blog.
The QFC is especially appealing to U.S. safeguard, and security organizations occupied with U.S. Unfamiliar Military Sales ("FMS") and Direct Commercial Sales ("DCS") for various reasons, including:
- Expeditious entry-based element set-up measure with continuous customized direction from the QFC;
- A very responsive business, administrative and lawful group that comprehends the difficulties of the protection and security areas, including U.S. FMS and DCS deals;
- Low and unsurprising foundation cost with no regulatory prerequisites for report interpretation or sanctioning;
- Clear and straightforward guidelines in the English language dependent on custom-based law ideas,
- 100% unfamiliar proprietorship which wipes out concerns commonly connected with joint - adventures constrained by outside nationals (send out control, a continuation of exceptional status for workers, trade control);
- Sensitivity to the ordered/classified nature of protection and security contracts and no necessity to unveil the agreement to the controller;
- Business-accommodating business guidelines; and
- Establishment through a branch or a restricted risk organization.
Qatar, a vital long-term accomplice of the United States and the Al Udeid Air Base host, keeps on drawing in U.S. aviation, online protection, safeguard, and security project workers.According to the Department of Commerce:
"The strong and growing bilateral security partnership between Qatar and the U.S. is demonstrated by the recent series of major U.S. defence sales to Qatar. Qatar's Foreign Military Sales (FMS) program forms the cornerstone of security cooperation between U.S. and Qatari forces, with a total case value of over $26 billion. In addition, since 2014, the U.S. has also authorized the permanent export of over $2.8 billion in defence articles to Qatar via the Direct Commercial Sales (DCS) process. Moreover, as demonstrated in recent years, Qatar's plan to expand and modernize its military will continue to provide opportunities for foreign military and direct commercial sales, especially training and capacity building programs across all branches of the Qatar Armed Forces."
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