Employment Vehicle Options
When entering a new market, an independent contractor relationship seems appealing and flexible from a cost standpoint. However, contractor agreements established in the US are not valid in Qatar or any foreign country for that matter. Businesses looking to explore this option should seek advice from legal experts to discuss the risks associated with independent contractors.
Traditionally, to compliantly hire employees in a foreign market you had to establish a foreign subsidiary. However, establishing a foreign subsidiary comes at a big cost. In Qatar, it can take as long as four months and has startup costs around $15k-$20k. Plus, if operations don’t work out, tear-down time and costs are three times as great. Not sold? View 10 headaches associated with creating a foreign subsidiary in this post.
Many companies find they value flexibility over the rigid structure of a foreign subsidiary and look to International PEO/ FSaaS.
Through Velocity Global’s Foreign Subsidiary as a Service (FSaaS) model, companies can enter foreign markets legally and compliantly while maintaining low costs and high flexibility. Through our International PEO model, we become the employer of record and handle all backend HR functions including payroll, local employment contracts, social programs, tax withholdings, and even supplementary insurance and work permits, while you focus on managing your employees and growing your business.
Legal Implications to Consider for Qatar Employment
Foreign workers are subject to Qatar labor law and enjoy certain rights. Employees must not work more than six days a week and 10 hours per day. Overtime must be paid when working more than eight hours per day.
Expats who wish to work in Qatar must have a sponsor to do so. By the end of the year, sponsorship in Qatar must be controlled by an employer, either directly or through visa secondments. Before, practically anyone could sponsor an employee, but now in order to receive a work permit they have to be sponsored by an employer. This is due to the Kafala law changes which will be implemented in December, which you can read more about here.
This does not mean that foreign employees need to apply for new visas if they change employers in Qatar. Visas can still be transferred from one sponsor to another, so long as the previous sponsor or employer provides an NOC letter or non-objection certificate.