Corporate & Commercial9 min read
Qatar Free Zones: Setting Up, Ownership and the Law
Faysel Al-MohannadiLawyer admitted before the Court of Cassation · Reviewed on
Short answer
The Qatar Free Zones Authority runs two free zones under Law No. 34 of 2005: Ras Bufontas beside Hamad International Airport and Umm Alhoul beside Hamad Port. Companies there face no non-Qatari capital limits, the Income Tax Law does not apply for twenty years, renewable, and the QFC Court hears disputes unless the parties choose alternative dispute resolution.
What are the Qatar Free Zones, who runs them, and who can own a company there?
Law No. 34 of 2005 on Free Zones governs two zones: Ras Bufontas, beside Hamad International Airport, and Umm Alhoul, beside Hamad Port. Decree-Law No. 21 of 2017 designated both (Article 5), and Minister of Finance Decision No. 2 of 2021 gave each its own customs office.
A free zone is a defined part of Qatar's territory set aside for economic activity and treated as outside the State's customs territory (Article 1). Qatar's criminal laws apply there, and its civil laws apply unless they conflict with the Free Zones Law and its regulations (Articles 39 and 40).
| Issue | What the law says | Article |
|---|---|---|
| Who supervises | The Free Zones Authority, an independent public body reporting to the Cabinet, based in Doha | 17 and 18 |
| Registration and licences | The Authority's chief executive registers companies and issues their licences | 19 and 30 |
| Regulations | Issued by the Authority's board, on company formation, registration and liquidation, licensing and land leases | 20 and 48 |
The Authority calls itself the Qatar Free Zones Authority (QFZA) and says it was created in 2018. Qatar Science and Technology Park has its own free zone under Law No. 36 of 2005, outside this guide.
A free zone can host limited liability companies, partnership contracts and other entities, owned by one or more individuals or companies, whether citizens, residents or neither, without the non-Qatari capital limits (Article 4). In practice the Authority offers an LLC or a branch.
Which activities qualify, and how do you set up?
The Free Zones Law defines economic activity widely, from trade and industry to logistics, services and storage (Article 1). The Authority's Schedule of Permitted Activities, under its Licensing Regulations 2018, sorts activities into 16 sector clusters, including:
- Logistics, warehousing and marine services.
- Industrial products, transport equipment and aviation.
- Food, consumer goods and retail.
- ICT, media and design.
- Pharmaceuticals and medical services.
- Financial, professional and business services.
The Authority expects applicants to work in a target sector, use Qatar mainly as a base for regional and international trade, add value to the economy and show financial capacity. Banks and financial institutions in the zones answer to Qatar Central Bank (Article 42 bis).
The Authority describes a three-stage process run by its business development and investor relations teams:
Submit an enquiry on the Authority's website; its business development team contacts you about your plan.
The Authority decides whether your business plan qualifies.
If it does, file the formal application with the licence application fee, articles of association signed by all shareholders and, for a corporate founder, its home-country certificate of incorporation.
The company is entered in the Authority's register with a certificate and number, signs its lease and receives its licence.
Investor relations then handles visas and the bank account, then building and environmental permits and customs registration.
Land and buildings are lease-only, with rent set during the application. The Authority does not publish its fees, but Invest Qatar's setup guide (May 2026) lists these:
| Fee | LLC | Branch |
|---|---|---|
| Application and registration | QAR 6,000 | QAR 4,000 |
| Licence | QAR 5,000 a year | QAR 5,000 a year |
On 14 September 2026, QNA reported the launch of Dar Al Sharikat to register and license companies for the QFC, the Free Zones Authority, Qatar Science and Technology Park and Media City Qatar, so check which body takes your application. For a mainland company, see registering a company in Qatar.
What tax and customs rules apply to a free zone company?
The Income Tax Law, and any other law imposing direct or indirect taxes, does not apply in a free zone for twenty years, renewable by Cabinet decision (Article 7). The law does not say when the twenty years start, so confirm with the Authority the period that applies to your licence.
| Issue | Rule | Source |
|---|---|---|
| Profits from transit trade | Exempt from all taxes if the transactions are handled in the zone's public warehouses | Free Zones Law, Article 15 bis 1 |
| Imports into the zone and exports abroad | No customs duty on equipment, goods, raw materials and other inputs | Article 8 |
| Goods moved into the local market | Customs duty applies | Article 9 |
| Large multinational groups | The global and domestic minimum tax applies despite special tax regimes, for fiscal years starting on or after 1 January 2025 | Income Tax Law, Article 23 bis 8 |
The minimum tax covers groups with consolidated revenue of EUR 750 million or more; see company tax in Qatar.
How does a free zone company differ from a QFC or mainland company?
A free zone licence covers work in or through the zone with no other state licence or registration (Article 6), but dealings in the local market still follow Qatari law.
| Issue | Free zone company | QFC entity | Mainland company |
|---|---|---|---|
| Law | Law No. 34 of 2005 and the Authority's regulations | QFC Law No. 7 of 2005 and its regulations | Law No. 1 of 2019 and the Commercial Companies Law |
| Licensing | Free Zones Authority (Article 6) | QFC Authority; the QFC Regulatory Authority for regulated activities (Article 11) | Ministry of Commerce and Industry, plus any authority the activity needs |
| Foreign ownership | Not bound by the non-Qatari capital limits (Article 4) | Up to 100 per cent (Article 12) | Up to 100 per cent; above 49 per cent needs Ministry approval |
| Tax | Income Tax Law does not apply for twenty years, renewable (Article 7) | Only taxes set by QFC regulations (Article 17) | Income Tax Law |
| Court | QFC Civil and Commercial Court, unless alternative dispute resolution is agreed (Article 44) | QFC Civil and Commercial Court (Article 8) | Investment and Trade Court, unless arbitration is agreed |
Business done in Qatar outside the zone, with residents or companies established outside it, follows the State's laws (Article 41), and goods moved into the local market pay customs duty (Article 9). For its licensed activity inside the zone only, the company is exempt from the restrictions of the law regulating commercial agencies (Article 15 bis 1); see the commercial agency guide.
Free zone companies other than banks and insurers may bid in government tenders, within their licensed activities and after classification by the Ministry of Finance, but without their tax or fee exemptions or other incentives (Cabinet Decision No. 23 of 2019, Articles 2 to 6). For a fuller comparison, see foreign investment in Qatar and WLL or LLC in Qatar.
How does a free zone company employ staff?
A registered company may hire its own staff and set their terms, as long as their rights are no less than the Labour Law's, subject to international agreements and any regulations on free zone employees (Article 11).
A Minister of Interior decision regulates residence for free zone workers and their families, including entry visas and recruitment from abroad (Article 42). The Authority says its investor services team handles work and residence visas, and that there is no minimum quota of Qatari staff.
The Labour Law, Law No. 14 of 2004, sets the minimum for working hours, leave and end-of-service gratuity; see Qatar's Labour Law. The QFC Civil and Commercial Court has heard an employee's claim against a free zone company as a civil and commercial dispute under Article 44 (judgment of 19 December 2023).
How are free zone disputes resolved?
The QFC Civil and Commercial Court hears all civil and commercial disputes between free zone companies, between the Authority and individuals or registered companies, and between registered companies and Qatar residents or companies outside the zones, whatever the legal relationship, unless the parties agree to settle by alternative means (Article 44).
Law No. 15 of 2021 put this rule in place of a separate free zones conciliation and arbitration centre. Your contract's dispute clause therefore decides whether a dispute stays with the Court or goes to arbitration; see the Qatar International Court guide and arbitration in Qatar.
| Situation | Where it goes | Source |
|---|---|---|
| Licence revoked or suspended (allowed only for breach of its conditions) | Grievance to the Authority's board within 15 days; the board decides within 30 days, and silence counts as refusal; then appeal to the QFC Regulatory Tribunal within 60 days | Free Zones Law, Article 14 |
| Government contract from a tender or auction | The State courts alone | Cabinet Decision No. 23 of 2019, Article 7 |
When should you speak to a lawyer?
Where you base the business fixes its law, tax and court for years. Signs it is worth getting advice:
- You are choosing between a free zone, the QFC and the mainland, and your customers are in Qatar.
- You plan to sell into the local market or appoint a distributor or agent outside the zone.
- You are reviewing the lease or licence terms before signing.
- You need to confirm your tax holiday period, or whether the minimum tax catches your group.
- Your licence has been revoked or suspended, and the 15-day grievance period is running.
- You are drafting the dispute clause in a contract with a free zone company.
What the law says
This guide relies on Law No. 34 of 2005 on Free Zones, as amended by Decree-Law No. 21 of 2017 and Law No. 15 of 2021 (Articles 1, 4, 6 to 9, 11, 14, 15 bis 1, 17 to 20, 30, 39 to 42 bis, 44 and 48), on Article 5 of Decree-Law No. 21 of 2017, and on Minister of Finance Decision No. 2 of 2021. It also uses Cabinet Decision No. 23 of 2019, Article 23 bis 8 of the Income Tax Law and, for comparison, QFC Law No. 7 of 2005 (Articles 8, 11, 12 and 17), as shown on Al Meezan on 31 October 2026.
Read on Al MeezanQuestions people ask
Yes. The law allows free zone companies to be set up without the non-Qatari capital limits (Article 4), and the Authority says full foreign ownership is available, so no Qatari partner is needed.
The Income Tax Law does not apply in a free zone for twenty years, renewable by Cabinet decision (Article 7). Large multinational groups, however, are subject to the minimum tax for fiscal years starting on or after 1 January 2025 (Income Tax Law, Article 23 bis 8).
Yes, but its dealings with residents and companies outside the zone follow the State's laws (Article 41), and goods it moves into the local market pay customs duty (Article 9).
The Authority says its investor services team handles work and residence visas, and a Minister of Interior decision regulates residence for free zone workers (Article 42). Staff rights must be no less than the Labour Law's (Article 11).
The QFC Civil and Commercial Court, unless the parties agree to settle by alternative means such as arbitration (Article 44). Disputes from government tender contracts go to the State courts alone (Cabinet Decision No. 23 of 2019, Article 7).
This guide is general information about Qatari law, not advice on your case.
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Setting up in a free zone?
Check the licence, the tax position and the dispute clause before you sign the lease, and ask about your situation.