What are the available routes for companies to be listed in Qatar?
- Establishing a public shareholding company.
This requires five founders at a very minimum and a share capital of at least QAR 40 million which can be in-cash or in-kind shares such as assets or properties owned by the founders which will be evaluated as per the rules of Qatar Financial Market Authority (“QFMA”).
- Transforming an existing company (whether it is a private shareholding company or a limited liability company) to a public shareholding company.
In this case, the Company’s law No.11 of 2015 and the QFMA stipulate certain conditions; among them are: the Company must have been operating for two financial years, and the company must have achieved profits which do not fall below 5% average prior to the two years before transformation. The financial standing of the company will be assessed by an accredited evaluator by QFMA to evaluate the company’s assets and liabilities. After this procedure, the process of transformation can be summarised as : 1) Obtaining QFMA’s non-objection letter for the prospectus and listing; 2) Obtaining approval from the Ministry of Economy and Commerce for the articles of association and memorandum of association; 3) Issuance of Ministerial decision for the transformation; 4) Constitutional assembly invitation; 5) Subscription by the public; 6) Constituent assembly; 7) Appointing board members; 8) Publishing the articles of association in the official gazette; 9) Registering the company in the official register; and, 8) Application for listing in the official Qatar stock exchange.
A Public Shareholding Company is required to be managed by a board of directors compromising of a minimum of five individuals and a maximum of 11
There can be many changes when a company decides to go public; can you expand on common managerial changes?
A Public Shareholding Company is required to be managed by a board of directors compromising of a minimum of five individuals and a maximum of 11 who shall be appointed by the general assembly; one third is required to be independent and their selection will be based upon their expertise and experience. The duration of the independent committee will be a period of three years. The general assembly will be the supreme body of the company and it compromises into an ordinary assembly whose scope of powers are determined by the company’s law No.15 of 2015.
The Board of Directors will be subject to the governance regulations issued by the QFMA. These rules govern the work of the Board and determine its responsibilities and duties. The Board is required to disclose and be transparent in the preparation of financial reports and information related to the Board of Directors.
The risks posed can be limited and avoided by using the company's specialised legal advisers’ advice
What are the risks associated with IPOs?
As for the risks pertaining to public shareholding companies, they are subject to the supervision of two bodies: 1) the Ministry of Economy and Commerce and, 2), The Qatar Financial Markets Authority.
From the above, is there anything that can be done to reduce such risks?
The risks posed can be limited and avoided by using the company's specialised legal advisers’ advice, as they provide all information legally required to be followed by the above competent authorities to avoid any sanctions or administrative violations.
Rashid Al Saad
Senior Partner
r.alsaad@sharqlawfirm.com
www.sharqlawfirm.com
Mr. Al Saad has extensive knowledge and experience in major infrastructure projects, rail projects and large-scale commercial transactions, particularly cross-border transactions and ventures, outsourcing and Public Private Partnership ("PPP") projects in the State of Qatar and abroad. He also specialises in real estate. He has been instrumental in drafting and negotiating agreements for some of the most sophisticated transactions in Qatar.
