OVERVIEW OF HOSPITALITYINDUSTRY REGULATIONS

IN QATAR

Sharq Law Firm Newsletter | September 17 2017

www.sharqlawfirm.com

OVERVIEW OF HOSPITALITYINDUSTRY REGULATIONS

IN QATAR

www.sharqlawfirm.com

Very recently this year, the Cabinet at its weekly meeting held at Emiri Diwan approved a draft decision by the Minister of Economy and Commerce (MEC) to issue the executive regulationsof Law No. 6 of 2012 on tourism.

The new Tourism Law No. 6 of 2012 (the “Tourism Law”) covers the hospitality industry, includinghotels and resorts, as well as tourism facilities, tourism activities and tourist guides. The Tourism Law requires all hotels, their facilities and services to be licensed by Qatar Tourism Authority (QTA); the activities pertaining to hotels are regulated by the MEC. The new Tourism Law definesand regulates different categories of hospitality installations and activities. It covers mainly four-sub-categories. First category is the Hotel Facilities category which is defined to include hotels,tourist resorts, hotel apartments, desert tourist camps, floating hotels and tourist cruise ships.

The Tourism Facilities category includes entertainment and theme parks, clubs, travel agency offices, tourist guides and timeshare services. The Tourism Activities category includes tourist transportation activities such as tours, excursions and related, specialised tourist transportation methods (including by land and sea) and fourth category of tourist guides include Safari drivers and Specialist tour guides.

A s Qatar approaches the hosting of World Championship in Athletics 2019 and FIFA 2022, the Hospitality industry is picking up pace and is attracting both the local as well the foreign investors.

The Tourism law enumerates list of obligations of thelicensee which it must comply with such as obtain the approval of QTA prior to making any changes to the facilities and the construction of the premises, notify the QTA in writing of any intention to amend the tradename of the establishment, the ownership or the management, provide the customer with an invoice listedwith the services provided and the value of each of them,take the necessary precautions to conserve the environ-ment, obtain the necessary licenses and approvals from

www.sharqlawfirm.comOVERVIEW OF HOSPITALITY INDUSTRY REGULATIONS IN QATAR

the relevant authorities before establishing any events in the hotel or tourist establishment, and notify the QTA of such licenses and approvals before such desired events take place. The Tourism law requires licensees to provide the QTA with their tourism marketing and promotional programs and related implementation details no less than 15 days prior to the publication of such programs.

T he Tourism Law prohibits the establishment, use or management of a hotel or tourist establishment or the

practicing of any tourist activity unless a license has been obtained by QTA. QTA is responsible for evaluating and approving or rejecting license applications within 30 daysof submission. QTA issues preliminary approval which isthen followed by a definite license of three years. Hotels Facilities will be licensed for three-year periods while tourism facilities will receive one-year licenses.

Also, the Tourist guide profession is now recognized by the new Tourism law.

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www.sharqlawfirm.comOVERVIEW OF HOSPITALITY INDUSTRY REGULATIONS IN QATAR

The Tourism law also lays down certain circumstances under which the QTA may cancel the license of a hotel or tourist establishment or the license to practice an activity. Such as:

Failure of licensee to maintain necessary conditions of the license.

Issuance of final judgement of court to close down the establishment or facility.

Seizing to conduct the licensed activity for consecutive 6 months.

Demolition of the building in which the establishment is wholly or partly located.

Relocation of establishment without notifying QTA.

Conducting activities outside the scope of the license.

Notification from licensee to close down the establishment.

Violation of any legislation, public order or public morals, or engaging in any act that may harm the country’s reputation or security;

he penalties section of the law provide that the violator violating the provisions of this law shall be penalized with imprisonment of up to one year, a fine of up to QR 100,000 or both in addition

to the closure of establishment and cancellation of license. The offender may within 30 days appeal to the President of QTA whose decision shall be final.

he Investment of Foreign Capital in Economic Activities Law (Law No.13 of 2000) (the Foreign Investment Law), regulates the participation of foreign capital in business. The general rule is

that %51 of the capital of a business venture is to be owned by Qatari citizens or by entities fully owned by Qatari citizens. However, the Law provides that foreign ownership may be increased from 49% to 100% through a decision passed by the MEC in specified sectors called as ‘Priority Sectors’, under certain circumstances. Such ‘Priority Sectors’ being, agriculture, industry, health, education, tourism, the development of natural resources, energy or mining, consultancy and technical services, information technology, culture, sport and recreation/entertainment services and distribution service.

herefore, an investor willing to enter into Hospitality industry by constructing a %100 wholly owned hotel in Qatar shall make an application to the MEC and seek exemption to establish a

wholly owned entity. The Minister alongside consultations with QTA shall decide on the application.

[Note: The Laws of Qatar are originally drafted in Arabic and there are no official English translation available. Therefore for the purposes of drafting this article, we have replied on Arabic texts and used our translation and interpreted the same in the context of Qatari laws, regulation and current market practice. Should you have any questions in connection with this article or the legal issues it covers, please contact info@sharqlawfirm.com or a.majawadia@sharqlawfirm.com.]

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