Offering sponsorship to new entrants to the corporate market & exploring opportunities for joint venture
There is no legal prerequisite beyond the compulsory shareholding, nor is there any condition laid down regarding how diligently or actively the sponsor must assist a new entrant.
Sponsors acting in a passive role are simply prepared to give their name as the sponsor but do little more than that, except for charging a sponsorship fee. This could be a fixed rate per annum, or perhaps it is linked to a percentage of turnover or profit.
There are also organizations not involved in active business that offer consultancy in entering the market and through their consultancy business they formally sponsor a new entrant.
For some companies entering the Qatari market, passive sponsorship may be good enough. They may be happy to add their name to a lost of businesses that have a common sponsor.
In choosing the sort of businesses that the Group would wish to sponsor, the following criteria are important to us:
Our ability to offer value to the sponsored company beyond simply our name
Both parties to maintain a high ethical approach to doing business
Lack of any conflict to the Group’s own businesses and preferably an ability to
interact with the Group to mutual advantage
Lack of any conflict with other businesses that we sponsor
Transparency and openness in communications
Ability of the sponsored company to grow into a medium or large business, if not
already at that level
Examples of businesses that the Group has sponsored are:
Major suppliers to amongst others the military
The laws of Qatar dictate that at least 51% of shares in a company have to be held by a Qatari. There are some exceptions to the rules.
There are no rules dictating how profits have to be shared, and this can be determined by mutual agreement.
An active sponsor can assist the new business by or person in getting down to business as fast as possible and focusing on their core competency by utilizing their knowledge and experience of the market in every facet – from government compliance to business contacts. Being actively in business, this sort of sponsor can initially offer its assistance in HR, IT, Legal and Accounting services
We are keen to enter into business opportunities based in Qatar with foreign expertise, particularly where it makes business sense to source local ingredients for manufacture for the local & worldwide markets.
Rabban Services Company is a member of the Rabban Group of Companies.
As one of the oldest established large Corporate Groups, and with its intimate knowledge of business over several decades, we in Rabban Group and via our well connected shareholders are ideally positioned to actively assist foreign businesses entering Qatar.
Through our extensive day to day business activities – whether dealing with government bodies, Ministries, banks, insurance companies, lawyers, business advisors, auditors or every other critical aspect for conducting efficient business – we are able to link up new companies seamlessly to the most efficient and tried and tested service providers.
Local knowledge is critical.
Our management across a broad spectrum of businesses and with hundreds of years of collective knowledge of the Qatar market can assist and recommend the right person, organization, or method in which to do business, fast and efficiently.
For this reason we view sponsored companies rather as partnered companies, as we would like to be more involved than simply statutory compliance. We want new entrants to put compliance behind them quickly and get on with growing their businesses profitably.
(section 1) Name, objectives, period of existence & renewal
(2) share capital
(3) management, power & duties of GM, Assembly (board meetings) and its powers and obligations
(4) Financial year, dividends, reserves, audit
(5) dissolution & liquidation
supplementary to the Articles of Association and sets out in more detail the relationship of the shareholders, typically:
Governance and management of the company by the sponsored company
GM as required by sponsored company endorsed by Qatari sponsor in Power of Attorney
Loan by Sponsored Co to Qatari for having to buy shares & corresponding Assignment by Qatari
Division of profits: usually all to Sponsored company less sponsorship fee, but could be some other split (80:20 etc)
Requirement for Sponsored company to commit themselves Technically and Managerially
Requirement for Qatari to offer local knowledge and powers in a Consultancy agreement & in return receive “sponsorship fee”
Restriction on Qatari competing locally or in any way imparting Newco’s knowledge etc
Articles of Association & Shareholder’s Agreement requires both parties (but more specifically the Sponsor company) to appoint a GM as required by the Sponsored party to act in an unhindered way
Telephone: +974 4487 7662