Closing a Company in Qatar: Liquidation, Tax Clearance and Deregistration

Closing a company is not the same as letting the license lapse. Unpaid taxes, staff dues and a live Commercial Registration can follow the owners. This guide covers what we found, and it is older than most of our guides, so read it as a map, not as current procedure.

We used a MEED article of 5 June 2014 written by lawyers at Simmons & Simmons, and a search summary of Qatar Chamber statements reported by Qatar Tribune and GCC Business News. The MEED article cites Commercial Companies Law No. 5 of 2002, which we believe was later replaced by a newer Commercial Companies Law (No. 11 of 2015, which we did not read). It also names the Ministry of Economy and Commerce, which later reports call the Ministry of Commerce and Industry. This is general information, not legal advice.

What reasons allow a company to be dissolved?

MEED lists: the term of the company ends without renewal, its objectives are achieved or can no longer be achieved, too few shareholders remain, capital is not enough, losses reach half of the share capital (for limited liability and private shareholding companies), a unanimous or majority decision of an extraordinary general assembly, a merger, a court order, or a bankruptcy ruling. If the cause is insolvency, see our guide to bankruptcy in Qatar, because that route is different.

The steps MEED describes

1. Identify a valid ground and pass an extraordinary general assembly resolution that appoints a liquidator.

2. Register the decision in the Commercial Register and publish it in two Arabic daily newspapers.

3. The liquidator publishes a declaration of appointment.

4. Notify creditors by registered mail. If creditors are unknown, publish in two Arabic dailies and repeat after one month. The claim period must be at least 75 days.

5. Prepare an inventory of assets and liabilities within three months of starting.

6. Collect debts, sell assets and pay debts in the legal order, then distribute what is left to shareholders.

7. If the liquidation runs over a year, report to shareholders and prepare interim accounts.

8. Submit a final account, get it approved, and publish a declaration that the liquidation has concluded.

9. Apply to strike the company off the register, then the liquidator is released.

Any use of the company name during the process must include the words "under liquidation". MEED gives a maximum duration of three years unless the court or the minister approves an extension.

Who gets paid first?

MEED lists the order as liquidation expenses including the liquidator's fees, then employee remuneration, then amounts owed to the state, then the landlord for leased premises, then other preferential creditors, then shareholders. Creditors who do not claim by the deadline have their amounts deposited with the court's Treasury Department. Our guide to end of service gratuity explains what staff are owed.

Why tax clearance comes before deregistration

MEED says the liquidator must file a final tax return with the Ministry of Finance, due within four months of the period ending, and cannot apply to strike the company off until a tax clearance letter is issued.

What about inactive companies?

A search summary of Qatar Chamber statements says a fully Qatari-owned company can cancel its registration directly through the Ministry of Commerce and Industry without going through the tax authority. It says companies with a foreign partner that still hold a license must file their tax returns, pay any tax and request tax clearance through the electronic tax portal. Where both the registration and the license have expired, it mentions a sealed statement from the Ministry of Labour confirming no employees remain, and a direct route through the ministry when a registration has not been renewed for more than 10 years. We could not read these statements ourselves.

Before you start

• Check that the commercial registration is in your name and what it lists. Our guide to checking a company's CR and trade license shows how.
• If you simply stopped renewing, read our guide to commercial registration renewal and late renewal. Letting it lapse is not the same as cancelling it.
• Settle staff, landlord and bank matters first. See business setup in Qatar for the other side.
• Hire a Qatar licensed lawyer or auditor for the liquidation itself.

What we could not verify

• The current law, forms, fees and ministry procedure.
• Whether the 15 steps apply to free zone or QFC companies, which follow their own authority's rules.
• The Qatar Chamber statements, which we saw only as a summary.