How to work with commercial agencies in Qatar

Many foreign companies wish to conduct business in Qatar without establishing a presence of their own in the country. Businesses are looking to maximise the opportunities being presented by the 2022 World Cup and may consider the alternatives to having a legal presence in Qatar. In this article, we provide a quick overview on what to be aware of when entering the Qatar market via a commercial agent.

Using a commercial agent has traditionally been a popular choice, particularly for retail businesses, for companies who wish to operate in Qatar without establishing a legal presence of their own in the country. A commercial agent may enter into a contract with a foreign principal on the basis of a pure agency arrangement (the agent contracts on the principal’s behalf and earns a commission on its sales), or alternatively under a distribution arrangement (under which the Qatari distributor acquires the products from the foreign principal and sells them in its own name).

Whilst the opportunities for businesses in Qatar are extensive, there are many considerations and legal implications to be aware of when using a commercial agent:

1. Exclusive agencies must be registered with the Ministry of Commerce and Industry and are governed by the agency provisions in the Commercial Code and the Agency Law
2. Qatari law is protective of registered Qatari commercial agents
3. It is often difficult for a foreign principal to terminate a registered commercial agency, and in any event, compensation may be payable by the principal to the commercial agent, even upon the expiry of a fixed term agency agreement.

If you would like to know more about accessing the Qatar market and understanding the different business structures available, please contact Lee Keane.

Additional considerations for operating in Qatar:

Our Qatar hub helps businesses and individuals ensure they are prepared to navigate the legal landscape ahead of the 2022 World Cup.