Doing business in Qatar
by: Alan Walsh
The Three most important things for doing business in Qatar
- Negotiating and bargaining are commonplace processes and part of the Qatari culture. It is important that once a deal is struck with the decision maker, that one is not seen to make further compromises on price. This may be viewed in a way that sufficient respect was not provided to the most senior member of the party.
- Do not be concerned if your meeting is interrupted by other guests or telephone conversations.
- There is a long bureaucratic process to be engaged with during formalization of Orders with government entities. Once a deal is verbally concluded with a large organization, it is critical to ensure that the correct contractual documentation is followed through as payments and other approvals tend to be covered in red tape and substantially delayed.
Important: The upfront, hard-hitting approach is generally not welcome, so once again, be patient. Take the time to chat and drink the coffee, tea or soft drink and use it as an opportunity to establish relationships.
What to look for in a good partner
For most businesses that wish to trade locally within Qatar, a key requirement is that they must be at least 51% owned by a Qatari national. Despite the need for a 51% ownership, profits are not shared along these percentage line. There are a few exceptions to this ownership dilemma, using Free Zones or license agreement, however 51% ownership is the norm. These Free zones are scattered across the city as opposed to the typical arrangements of being clustered together in a dedicated area.
It is crucial to target the right person in your contacts, the decision-maker. Qatar is a relatively small close-knit community which thrives on social, political and family contacts as a means of opening doors for business.
It is also important to take care that once you enter a relationship with a sponsor, it is difficult to break the relationship and be welcomed to the community by another host. It is advisable that you have thoroughly researched the potential partners credentials prior to forming a partnership. As the local partner is often the first point of contact it is essential to ensure that they have the ability and willingness to be your contact on the ground or help you find a good one. There are limited instances where the sponsor has multiple sponsorships on-going and may not be actively interested in promoting your products, focusing on the receiving of commission instead.
Disputes are generally resolved through informal channels and local mediators are generally preferred to settle minor issues, rather than civil proceedings. Any formal proceedings would be through the local courts in Arabic under Shari’a law.
Conducting Meetings in Qatar
Personal relationships are essential for business in Qatar. Face-to-face business dialogue is expected out of both curtesy and acknowledgement of the relationship formed between the partners. Such meetings are preferred, as phone or emails are sometimes seen as impersonal. It is appropriate to allow the host to speak first and respond to his questions when invited to do so.
Whilst a concerted effort is generally made by Qataris to maintain the conversation in English, there is a tendency to switch to Arabic. This is particularly evident when faced with problematic issues.
It is often the case that senior Qatari managers have a western education, through completion of postgraduate degrees in the Western domain. They are also frequent travelers to the USA and Europe and have a general understanding of the norms of western societies.
Meetings are often seen as the formal closure of issues, and often a significant amount of work is undertaken, behind the scenes to ensure that the meeting objectives are formal closure of issues.
Whilst punctuality is expected, appointments should be made no more than two weeks in advance and confirmed a few days before the actual meeting as priorities may change. Be well-prepared, anticipate needs and share all relevant information, in advance in case of upcoming meetings.
The working week within the private sector is Sunday-Thursday from 9am-5pm and within the public-sector Saturday-Wednesday from 8am-2.30pm (some offices are open until 4pm).
According to freedom house, worldwide analysts of censorship in Countries, it is suggested that Media outlets and professionals in Qatar are subject to significant restrictions, and the overall landscape encourages a high level of self-censorship (Freedom House, 2017). Most Arabs are fluent in both Arabic and English, however sometimes humour gets lost in translation and can result in a perceived insult. It is particularly important that when laughing at a situation, that the correct context of the joke is understood by all. As a high context culture Arabs are very astute and are aware of facial expressions and nonverbal communication.
Communication should preferably be conducted in soft low tones as showing anger or frustration will disrupt the harmony and harm relationships with your business counterparts. Speaking your mind in public is also seen as disrespectful and thus the right protocol should be followed when communicating. This mainly includes being respectful, implicit and allowing silences between discussions to show that you have thought about what you are saying and giving time to respond without rushing them or interrupting their thinking. It is rare that important decisions are made without due consideration. Accordingly, it is polite to consult on significant issues prior to formal communications. This is better in a face -to-face discussion, rather than emails, texts or letters.
Dining in Qatar is often casual and relaxed, and quite often, especially at the weekend, you will find Qatari families enjoying the outdoor weather and having picnics. These are generally extended family affairs, lying on a blanket and sharing home prepared meals. There is an abundance of world famous restaurants throughout a range of 5-star hotels. It is common for buffet style platters to be presented. During these situations it is polite to be guided by the host and leave the table with him for each course. On some occasions in less formal establishments you may find yourself seated on the floor and having a communal meal. During such situations it is the norm to follow your host, who will normally offer his guests a communal platter.
Two short case studies regarding Qatar.
Case study 1 - Be aware of timing during religious occasions
The Employer on a major development asked a new UK based Cost Control Consultant to ensure that all subcontractor accounts could be closed within a month. This culturally inexperienced consultant (within his first 6 months of arrival to Doha), made his time-based commitments according to his proven KPI’s (key performance indicators) that he successfully applied in the U.K., and agreed to accomplish this task through daily meetings with the account holders (most account holders had Qatari/ other Muslim representatives).
A 3-week period was confidently confirmed by this western consultant who felt that this period would be sufficient to meet, negotiate and agree the final financial dues and conclude the final account for the project. The consultant failed to respect the upcoming Ramadan period, despite having “read” about the potential slowdown during such periods, in the mistaken belief that they would “force” the participants to willingly engage, as it “would be in the subcontractors’ interests to co-operate”. The actual duration for closing the accounts exceeded 9 weeks as the consultant had failed to account for the effects of Fasting, the Employers 6 hour working day and the Employers 10-day Eid holiday.
It is critical to respect the cultural and religious practices during religious occasions and be mindful of the statutory working hours and customs for Muslims, during the holy month of Ramadan. These are more than religious beliefs or customs, they are also legally protected rights by law (Hukoomi - Qatar E-government, 2004).
Case study 2 - Don’t wash your laundry in public
Western expatriates are often engaged in construction activities in Qatar, because of their experiences in the management of high value project-based works. In general, when there are high values at stake in construction projects, then you can assume a greater potential for dispute. Because of such high values of works, construction litigation is common in many countries. However, it is noteworthy that based on the foreign ownership rule, many Qataris have a 51% “interest” in the various companies which they sponsor. When these companies become embroiled in such disputes, the sponsors tend to know each other intimately and generally wish to settle such issues in private, without feeling a need to resort to litigation.
Whilst the formal contractual stance of the parties may be perceived as aggressive, it is likely that the representatives of the companies involved in the dispute are in fact friends. In the event of disputes, both “sides” of the dispute wish to be perceived as the justified party, however they often wish to avoid a public dispute.
Accordingly, they often engage external mitigation processes, which are informal dispute meetings chaired by a neutral party wherein they both agree on the mediation facilitator and accept his findings. This has the advantage of often avoiding the traditional contract disputes, and maintaining confidentiality, as the mediator considers both sides. Then the dispute has been resolved without any personal loss of face, and both parties are left with an amicable settlement.