Qatar

Small and medium-sized enterprises (SMEs) often struggle to secure credit due to a lack of real estate, securities and other easily securitized assets. Recognizing this limitation, the State of Qatar recently established a modern, centralized Movable Collateral Registry to diversify the range of acceptable security interests, reshaping the credit landscape in the country. This article reviews the legal foundation and operational procedures of the Qatar Movable Collateral Registry (“MCR”), administered by the Qatar Central Securities Depository, commonly known as Edaa (“Edaa” or “QCSD”). We also highlight a highly valuable practical precedent from our experience: the successful cross-border use of this mainland registry by a foreign lender/pledgee, on the one hand, and a borrower/pledgor registered in the Qatar Free Zones (“QFZ”), on the other hand. Governing Laws: The Regulatory Shift The mechanism for securing interests in non-real estate property is primarily governed by Law No. 16 of 2021 on the Regulation of Pledge over Movable Assets (the “MCR Law”), as well as Decision No. 1 of 2022 of the Qatar Central Bank Governor on the Procedures for Regulating the MCR (the “QCB Governor Decision”). This transformative piece of legislation provides a comprehensive, transparent framework for creditors, or secured parties, to formalize their claims over a debtor’s movable assets. The law’s objective is twofold: to provide certainty for lenders, and to allow borrowers to leverage the full value of their operating assets. The Administrator: Edaa’s Role Edaa is a financial company licensed by Qatar Financial Market Authority. It provides services such as clearing, safekeeping, settlement of securities and other financial instruments listed on the Qatar Exchange. Under article 6 of the MCR Law, Edaa is designated as the implementing platform for the registration and publication of security rights over movables, ensuring creditor protection and maintaining a central searchable public database of such interests. Edaa oversees the operational administration and supervision of the MCR. What is MCR and What Movable Assets Could Be Registered? The MCR is an electronic public database that contains information on security interests over movable property. Pursuant to article 3 of the MCR Law, movable collateral is a broad category encompassing virtually all assets not classified as land or buildings, such as: Inventory and raw materials Machinery and equipment Accounts receivable (invoices owed to the debtor) Contractual rights and intellectual property Agricultural crops, animals, and their products Bonds and negotiable instruments, including commercial instruments and bank deposit certificates. The Purpose/ Function of the MCR The primary purpose of the MCR is to enhance market transparency by allowing pledgees to access information via MCR website and verify whether a particular asset has already been pledged. Article 3(2) of the QCB Governor Decision allows a pledgee to simply “search” the MCR database to confirm that an asset is not already encumbered by a security right over it to a former pledgee. This boosts lender confidence and mitigates risk. Ultimately, the MCR strengthens the infrastructure of financial instruments in the Qatari market, positioning Qatar as an attractive regional and global financial hub. Registration and Perfection For diligent lenders, the registration process is ideally preceded by searching the MCR database to confirm the absence of any prior registrations on the intended movable asset. To make a security interest legally effective and enforceable against third parties, the following steps are required: Execution of the Security Agreement: The debtor (pledgor) and the secured party (pledgee) must execute a definitive pledge over movables agreement in writing, clearly outlining the assets being pledged. Open a User Account in the MCR Portal: Pledgee (acting directly or through its representative) must register as “user” in the MCR system, accepting the Edaa general terms, paying the required deposit, and providing required identification documents. Once approved, the user obtains access to the MCR services. Submission of the Registration Request: The pledgee or the pledgor must then electronically submit a registration request via the Edaa platform, detailing the relevant parties and the pledged movable asset description. Under article 6 of the MCR Law, the pledgee is responsible for the registration fees, unless otherwise agreed. Issuance of a Registration Certificate: Upon completion, the MCR issues an electronic certificate confirming the registration of the security interest. Legal Effect and Priority: First-to-register Principle Upon registration, the pledge becomes public and enforceable against third parties. Qatar follows the “first-to-register” principle. Under article 16 of the MCR Law, priority between competing security rights is determined primarily by the date of registration in the MCR. A secured creditor who registers its security interest first will generally have superior priority in the collateral and its proceeds, regardless of when the underlying debt was granted. Enforcement Rights In case a pledgee wishes to enforce the pledge, articles 27 and 29 of the MCR Law provide that a pledgee may enforce the pledge upon default through: Contractual Enforcement: After notice to the Pledgor, by sale at a public auction; or Judicial Enforcement: By application to the judge sitting in the executions circuit. Can QFZ Entities’ Assets Be Registered in the MCR? The MCR is a state-wide register for pledges over movable assets in the entirety of Qatar. Though there is no explicit carveout in the law excluding QFZ, some might assume that the assets of the entities registered with the Qatar Free Zones Authority (“QFZA”) may not be pledged in the MCR. This is complicated by the fact that the QFZA issued “the Collateral and Security Regulations” on 16 December 2020, which outlines the intent to establish a separate, dedicated movable collateral registry for the Free Zones created and maintained by the QFZA, accompanied by an FAQ Guide, which serves as supplementary guide to the regulations.  However, there is currently no evidence that such QFZ register is in force yet. In all cases, article 40 of Law No. 34 of 2005 on Free Zones as amended by Decree Law No. 21 of 2017 and Law No. 15 of 2021 provide that “Save for what is inconsistent with the provisions of this Law and the Regulations, all the laws, Regulations, and civil rules applicable in the State will be applied to the Free Zones.” Based on our firm’s successful precedent, we confirm that QFZ-registered entities can and should register their movable assets as collateral in the MCR. We believe this principle should equally apply to Qatar’s other sub-jurisdictions, such as the Qatar Financial Centre and the Qatar Science and Technology Park (QSTP). Conclusion The MCR represents a major step forward for financing in Qatar. By allowing movable assets to be pledged as security, it provides lenders with clear, enforceable rights while enabling borrowers to unlock the value of their operational assets. The registry is transparent, centralized, and accessible through Edaa, ensuring confidence for all market participants. GLA is a member of the MCR and has successfully registered a security interest over movable collateral on behalf of one of its clients. Recommendations Creditors and borrowers should actively utilize the MCR to register and search for pledges, ensuring priority and reducing risk. Further, QFZ-registered entities should register their movable assets in the mainland MCR to benefit from the same protection as mainland entities. Lastly, policymakers and stakeholders should continue to raise awareness of the MCR’s benefits to encourage wider adoption and improve market efficiency. Authors: Maryam Tarek, Dean Jaloudi, Ashraf Hendi    

The State of Qatar and the Qatar Financial Centre have undergone rapid development in the world of venture capital and technology startups. As of this writing, there are no fewer than 8 leading regional and global VC firms with a presence in the QFC, including: Alchemist, B Capital, Builders VC, Deerfield, Human Capital, Utopia, Golden Gate and Rasmal. (Most of these firms are part of the Qatar Investment Authority’s “Fund of Funds” program.) As the VC ecosystem continues to take shape in Qatar, local stakeholders may wonder if the legal system provides an adequate framework. In this article, we discuss one of the most important legal documents in the world of VC—the ubiquitous SAFE—and whether local startups can use them reliably. Background The world of VC and startups is distinct from more traditional investments like private equity and M&A, where investment targets are typically larger and more established companies. As startups rarely take on debt financing, most startups rely on equity financing from early investors and VC firms. This means fewer share purchase agreements and more share subscription agreements or Simple Agreements for Future Equity (better known as “SAFEs”). VCs typically invest in technology startups in their immediate and extended markets. But when VCs operate in unfamiliar markets, they understandably prefer to incorporate familiar elements. One important element is the use of holding companies established in jurisdictions with no direct connection to the target startups, but with considerable history as destinations for VC investment. Those jurisdictions are limited to just a few names: Delaware, Cayman Islands, Singapore, and arguably a few others. One of the many reasons for the concentration of startup holding companies and VC investments in a handful of jurisdictions is the predictability of how the legal systems in those jurisdictions will enforce the rights of parties involved in startups—from founders to employees to all levels of investors (pre-seed, seed, Series A, etc.) to the startup companies themselves. The Simple Agreement for Future Equity (SAFE) One of the core documents in the world of startups is the Simple Agreement for Future Equity (SAFE). Since startup companies often raise capital before they have begun to generate consistent profits (or even revenue), it is very difficult for early-stage investors and founders to agree on valuation. When parties cannot agree on valuation, they cannot agree on what a certain investment (e.g. 1 million USD) is worth in terms of an ownership percentage in the company. Hence, the popularity of SAFEs in which one contractual term is agreed at the outset (the cash value of the investment) and another key term (percentage of ownership) is determined at a future date based on certain events. The use of SAFEs has become commonplace all over the world, so much so that even the wording of these contracts has become relatively standardized (even more so than FIDIC agreements or LMAs). Initially, the wording of popular SAFEs was made to fit target companies incorporated in Delaware. But as SAFEs became increasingly popular in other jurisdictions (Cayman, Singapore, etc.) new SAFEs emerged with localized language for those places. Are SAFEs Sharia-compliant? But SAFEs have not gained similar adoption in the Muslim world, for some obvious reasons. First, many experts consider SAFEs to be unacceptably “speculative”, thus rendering them inconsistent with Sharia principles due to the concept of ‘gharar’. In most SAFEs, the investment amount is clear, but the other half of the equation is not. Investors are not entitled to a certain percentage of the company they are investing in, and it is very possible that those investors could ultimately end up with a percentage of the company that does not accurately reflect its value at the time of investment or at the time of vesting. Another issue affecting SAFEs and other startup investment practices in the region is the common use of multiple classes of shares—Ordinary, Preferred, Series A preferred, Redeemable, Convertible, etc. Traditional corporate rules in Islamic jurisdictions require that all shareholders hold identical rights, thereby limiting the ability to issue preferred shares or provide other negotiated rights that startup investors have come to expect. In those environments, even basic VC concepts such as liquidation preferences, conversion discounts, or valuation caps can be viewed as incompatible with local law. The QFC – a viable alternative Consequently, founders and investors often default to more familiar jurisdictions such as Delaware, the Cayman Islands, or Singapore. In some cases, they go so far as to establish a new holding company with no operational nexus to the underlying business, accepting the costs and administrative friction of a cross-border structure simply to gain confidence that their transaction documents will be enforced as intended. But startups in Qatar—whether incorporated under the Ministry of Commerce and Industry (MOCI), the Qatar Free Zone Authority (QFZA) or other licensing authorities—may not need to resort to such measures in order to facilitate future VC investment, because the QFC offers many of the same advantages as these other jurisdictions, namely: Respect for the principle of Freedom of Contract A common law system based on English law A transparent court system which publishes its judgments A panel of highly respected and experienced judges hailing from many of the most advanced legal systems around the world Application of agreed governing law, including QFC law No unilateral application of Sharia, which typically conflicts with SAFE notes and related legal concepts like preference shares vs ordinary shares An “Onshore court system” with minimal friction between QFC court substantive decisions and execution of judgments against assets in Qatar No tax on foreign-sourced profits No capital controls Use of English language in proceedings (no mandatory use of Arabic for proceedings or translations of English language documents) Adequate remedies for investors, including: Specific Performance: the QFC courts can compel the company to issue the investor the number of shares to which he/she is entitled under the SAFE Monetary Damages: under QFC contract law, an aggrieved party is entitled to compensation from a breaching party that would put the aggrieved party “in the position he would have been in if the contract had been properly performed.” This is key, because in the event of a dispute between SAFE holders and companies, only “expectation damages” can properly compensate investors. Other types of damages like “reliance damages” (which restore the aggrieved party to the position it was in before the contract) do not adequately compensate startup investors for the risks they take for investing in early-stage companies. Conclusion – Your SAFE is safe in the QFC As more startups and VCs continue to set up shop in Qatar, they will consider how—and where—to structure their investments, including SAFEs. Even startups that already operate in mainland Qatar through the Ministry of Commerce and Industry may find it beneficial to set up a QFC holding company and then engage in capital raising through that entity, rather than raising directly through their MOCI entity (for the reasons discussed above in ‘Are SAFEs Sharia-compliant?’) or by setting up a foreign holding company. For the reasons set out above, both startups and VCs operating in Qatar may conclude that there is no need to interpose unrelated jurisdictions (like Delaware or Singapore) in order to facilitate investment, and the Qatar Financial Centre may be the most appropriate choice for all stakeholders in the ecosystem. In conclusion, your SAFE is safe in the QFC. Authors: Dean Jaloudi, Partner 

On 4  August 2025, the Board of Directors of the Qatar Financial Markets Authority (“QFMA”) issued Decision no. 5 of 2025, issuing the Governance Code of Listed Companies (the “New Code”). The New Code, published in the Official Gazette dated 17 August 2025, came into effect immediately. However, affected companies have one year to make changes necessary to comply with its provisions. With over 50 companies listed on the Qatar Stock Exchange (“QSE”) as of this writing, dozens of prominent Qatari companies may need to consider how to come into compliance before August 2026. Here are some key takeaways from the New Code that QSE-listed companies should consider: As mentioned above, affected companies have one year to make necessary amendments to come into compliance with the New Code. Nevertheless, the New Code is effectiveupon publication, meaning that companies currently applying to convert into a Qatari Public Shareholding Company (“QPSC”) and be listed on the QSE may have to make last minute adjustments in order to comply with the New Code. These adjustments could include: Revising their proposed QPSC Memorandum and Articles of Association Revising Board Charters before they take effect Expanding their proposed Board of Directors Updating the draft Offering Prospectus before publication in order to accurately reflect the governance structure, size and names of Board members, among other information. It would be advisable for companies currently going through the listing application process to check with the QFMA and confirm whether they may proceed with their applications as is. The New Code applies to both Main Market and Venture Market public listed companies. Previous governance codes were limited to one category or the other. (As of this writing there is only 1 company on the Venture Market, but it is expected that this number will increase in the next year or so.) 6.The definition of “Insider” has been expanded to include both Board Committee Members and the spouses and children of Insiders. Higher standards now apply to Independent Board Members, including the following requirements: Relevant education and professional experience Shareholding restrictions also apply to the first degree relatives of the potential Independent Board Member Employment restrictions apply to both the Independent Board Member and his/her first degree relatives Independent Board Members cannot serve more than 2 consecutive terms Instead of a minimum requirement for one-third (1/3) of the Board to be independent, the New Code requires an absolute minimum of 3 Independent Board Members. For smaller boards (with the minimum of 7 members), this would result in a largely independent Board (nearly 50%). For larger boards (e.g. 11 members), this could potentially result in a board that is less than 1/3 independent. More focus has been given to ESG issues, with an obligation on listed companies to consider their impact on the environment and on society, in addition to good governance. The Chairman of the Board of the QFMA may extend the one-year compliance grace period for one or more additional one-year periods. GLA will continue to monitor developments with respect to the 2025 Governance Code and will publish a more detailed summary in the coming weeks. For more information, please feel free to contact Dean Jaloudi, Partner and Head of Qatar Office ([email protected]). Author: Dean Jaloudi, Partner

Riyadh, Saudi Arabia 01, May 2025: Massar Business Solutions and Omani & Partners are pleased to announce their strategic alliance, combining legal excellence and business innovation to deliver integrated solutions across Saudi Arabia and the wider region. Founded with a mission to serve the corporate law, property, and litigation needs of businesses across all five continents, Omani & Partners LLP brings unmatched expertise in both domestic and international commercial contracts. Their team of highly specialized professionals includes university professors, former judges, senior state attorneys, and international law experts. This partnership reflects the shared vision of both organizations to support businesses and government entities in Saudi Arabia by delivering world-class legal counsel, strategic advisory, and cutting-edge business technologies. By combining Massar’s expertise in business incorporation, client onboarding, and visa facilitation with Omani & Partners’ elite legal services, the partnership will enable clients to confidently navigate complex regulatory environments, safeguard their interests, and expand across borders. “This partnership marks a transformative moment for businesses operating in the MENA region and globally,” said Steven Little, CEO of Massar Business Solutions. “Together with Omani & Partners, we are building a robust ecosystem that not only addresses today’s challenges but also paves the way for sustainable growth and success in the future.” “At Omani & Partners LLP, we are proud to collaborate with Massar Business Solutions to deliver integrated legal and business services that meet the evolving needs of the Saudi market. Together, we are committed to supporting clients with innovative, practical solutions that enable sustainable growth and cross-border success.” said Dr. Nasser Al-Adba, Founder and Managing Director of Omani & Partners LLP. The collaboration also emphasizes a strong commitment to thought leadership and global engagement. Omani & Partners is actively involved in international legal forums and maintains key relationships with courts, and academic institutions worldwide. Companies across Saudi Arabia and beyond can now benefit from a powerful combination of business facilitation and world-class legal support, prepared to meet the demands of a fast-evolving market and are ready to lead clients to new heights of strategic success. For enquiries, please contact [email protected] For information on Massar Business Solutions visit www.massaraa.com For information on Omani & Partners LLP visit Omani & Partners