The low cost of hiring is one among several reasons to hire in Qatar. Its time zone also lines up nicely with some Asian and European nations, facilitating business communications. The country's dramatic growth technology has also become a magnet to Ivy League institutions and multinational corporations. These forces have further stimulated a cycle of tech growth.
Access to a vast array of opportunities and an increasingly competent labor pool make Qatar a prime destination for foreign employers.
Why Should You Hire Employees Using an Employer of Record?
A company cannot hire international talent in Qatar without permanent establishment (PE) status in the country. Setting up a legal entity on-ground is one way. This requires significant investment of resources and effort on the part of the company, including fulfilling local compliance requirements.
A far more economical, simpler, and much faster solution is to hire employees through an employer of record (EOR). Working with a foreign company as its legal employer, it handles the majority of operational matters in employment. It hires, withholds taxes, and structures compensation and benefits packages, and more.
The Benefits of Hiring Remote Workers in Qatar
Lower Hiring Costs
Employers must provide a monthly minimum wage of 1,000 Qatari riyals (QAR), roughly equivalent to USD 275. Valued at respectively QAR 300 and QAR 500, mandatory food and housing are also paid or in kind. Including the allowances, the minimum wage is QAR 1,800, about USD 495. Qatar’s wages are significantly lower than anywhere else in North America and many parts of Europe.
Corporate income tax is a flat 10%. Payroll costs in Qatar include mandatory contributions to social security and health insurance. This brings the cost of hiring an employee in Qatar to about 1.2 base salary. Qatar's low rates on a global scale make it a highly attractive destination for foreign employers seeking global talent.
However, not needing permanent establishment status to hire employees in Qatar, a foreign employer would typically only be subject to taxes on payments such as service or commission fees to an EOR. For this reason, among many others, EOR is one of the most cost-effective ways of global hiring.
An Increasingly Skilled Workforce Paired with a Push for Innovation
Qatar’s Information and Communications Technology (ICT) sector, worth USD 4.4 billion as of January 2022, is a nod to the country’s incredible transformation into a knowledge-based economy. Fueled by innovation and technology, Qatar National Vision 2030 outlines the country’s commitment to social, economic, and environmental initiatives.
The establishment of Education City is among the many national goals. It has attracted the likes of Ivy League schools to establish their local presence in Qatar. Topping the charts for labor market efficiency, Qatar has also drawn international technological investments. Huawei, for example, built an AI lab at Qatar University as part of its ICT academy. This encourages the country’s continued growth of diverse and ambitious local talent.
Qatar boasts an increasingly skilled talent pool and highly favorable business conditions. The country is one of the most attractive markets, particularly in the Middle East, for foreign employers seeking to hire employees.
Manage Employees through a Global Employer of Record
The majority of provisions in the new Labor Act have gone into effect as of January 2023. Here are some of the key areas of employment that a foreign employer must comply with when hiring employees in Qatar.
Employment Contracts
Written employment contracts must be in Arabic. However, adding an official translation into a foreign language is allowed and is often the case in practice. For this reason, foreign employers are strongly advised to include a translated employment contract when hiring employees in Qatar. Doing so will enhance clarity in a remote working relationship and the face of language differences.
Probationary periods, which must be included in employment contracts, cannot exceed six months. Employment contracts may be terminated at any time by either an employer or employee. Generally, both parties must provide one month’s notice for an employment period of less than two years. Two months’ notice is required for a length of employment longer than two years.
Employment contracts can be either fixed-term or indefinite but definite contracts may not exceed five years. If a fixed-term contract is terminated but the working relationship resumes within two months, the contract automatically becomes continuous. The nature of this fixed-term contract would be similar to that of a permanent contract. This means that the fixed-term contract would not be concluded in successive, limited terms, as intended.
With seniority, crucial benefits such as annual leave and severance pay, entitled to both permanent and fixed-term employees, may increase. The implication for foreign employers is to conclude lengths of contracts appropriate to the requirements of work. They should also be aware that these contracts must protect employees' benefits and entitlements. Understanding these distinctions can also aid in estimating headcounts, budget forecasting, and document preparation for global expansion.
An EOR like Borderless is here to support you in navigating the requirements of employment. This will ensure you meet compliance in accordance with evolving local regulations.
Paid Leaves
Upon three months of employment, employees are entitled to sick leave with full pay. The next four weeks are paid at 50% of base wage and the following six weeks are unpaid. Maternity leave of 50 days is fully paid. Muslim employees are also entitled to a one-time unpaid leave of 20 days to make a pilgrimage to Mecca.
After one year of employment, employees may take annual leave with dates determined by employers. Paid time off can be divided into two periods, of which one can be postponed until the following year. Employees with a tenure of five years or less are entitled to a paid annual leave of three weeks. Those who have worked for five years or more are granted four weeks.
An EOR like Borderless is your resource for receiving the most up to date employment requirements. This allows you to provide statutory leaves aligned with the mandated levels of pay and required lengths of time off.
Overtime
To the exclusion of shift workers, employees typically work Sunday to Thursday and enjoy their day of rest on Friday. Businesses open on Friday operate half a day on Thursday. In both workweeks, eight hours per day and 48 hours per week are the maximum allowable limits. All employees may not work more than six hours per day and 36 per week during the Ramandan month.
Any hours worked over 48 per week and time worked during any one of the 10 public holidays is considered overtime. Limited to 10 hours per day and 60 hours per week, overtime pay is calculated as a percentage of base pay. Regular workers are paid 125% base wage while night workers who work 21:00 to 3:00 receive 150% base wage.
Social Security Benefits
As of January 2023, the new Social Security Law, with the exception of certain provisions, has come into effect. Employers and employees respectively contribute 14% and 7% to the Civil Pension Fund, the country's retirement program.
An employer's payroll cost is 21% based on the contributory wage, consisting of basic salary, social and housing allowances. In addition to public healthcare benefits, employees receive compulsory health insurance sponsored by their employers.
Your choice of Employer of Record Borderless will ensure you contribute to social security at the latest rates. This will allow proper allocation of expenditure well in advance, freeing up resources for global expansion.
Other Employer Responsibilities
If the new Social Security Law provides contributions or benefits more generous than existing pension schemes or end of service gratuity (EOSG) entitlements, employers are obliged to pay EOSG at the new rates. In this case, current contracts must be revised to incorporate the new provisions. On the other hand, if the existing entitlements are less beneficial than those under the new Social Security Law, then employers must pay EOSG at the former rates.
In addition, severance pay is eligible to employees who have completed one year of continuous employment. Pay in lieu includes time worked and unused but accrued leaves. Additionally, a minimum of three weeks’ wage (EOSG) for each year of service must be paid. In the absence of ample notice for termination, either party becomes responsible for paying the amount equivalent to the basic salary for the notice period that should have been given.
Lastly, the removal of a No Objection Certificate enables all employees to change jobs without written permission of their current employer.
An EOR like Borderless ensures your compliance in making sure your employer responsibilities are fulfilled according to revised regulations.
Choosing the Right EOR for Your Business
There are several key considerations for employers to make the most informed decisions in choosing the best EOR for their businesses.
- Geographic coverage: Make sure that your EOR of choice can legally operate in Qatar.
- Employment services: The suite of employment services offered by a competitive EOR should cover hiring, onboarding, payroll, benefits, and HR management.
- Reputation: When selecting an EOR, get a sense of its past work and experience. Make sure that it has a great track record and the local know-how to bring you value add.
- Cost: A high-value EOR’s pricing should be transparent and reasonable.
- Flexibility: An EOR should offer customized employment solutions to meet your specific needs and requirements.
Overall, foreign employers should choose an EOR that can provide cost-effective, reliable, and compliance-first employment solutions. This will enable you to navigate and expand into foreign waters with confidence, ease, and trust.
An EOR Like Borderless Can Help
In over 150 countries, we are ready to help you hire, onboard, manage, and pay remote employees, wherever you are. Our experienced team of legal experts provides guidance on compliance and assists employers all over the world in navigating the cultural and professional environment in the country they choose to do business in. Book a demo today.
Disclaimer
Borderless does not provide legal services or legal advice to anyone. This includes customers, contractors, employees, partners, and the general public. We are not lawyers or paralegals. Please read our full disclaimer here.
