QFCA sweetens norms to woo firms

ASIF IQBAL

DOHA THE Qatar Financial Centre Authority (QFCA) on Monday announced new regulations for governing special purpose companies, holding companies and single family offices operating in or from the QFC.

The regulations provide for a more attractive legal, regulatory and business environment that will allow expansion of the range of services the QFC firms may offer and the structures they may adopt, notably single family offices and special purpose companies.

Pointing out that the Authority has been strengthening its environment to offer business platforms for local, regional, and international firms, QFC Authority Chief Executive Officer Shashank Srivastava said, “A business looking to establish itself within the QFC environment, whether Qatari or foreign, can count on certain and clear regulatory and tax regimes.” As per the new regulation, the Special Company Regulations (SCR) provide the legislative framework for special purpose companies and holding companies.

The SPCs are entities created to fulfill specific or temporary objectives. They can typically be used in transactions involving the acquisition and financing of specific assets.

SPCs are usually subsidiary companies with an asset-liability structure and legal status that make their obligations secure, isolate risk and minimise the danger of insolvency even if the parent company becomes insolvent. SPCs are granted a number of exemptions which would not ordinarily apply to conventional companies in the QFC.

For instance, SPCs are exempt from certain provisions of the QFC companies regulations including from the requirement to audit or file accounts or hold annual shareholder meetings. In addition, corporate and administrative services can be provided to SPCs by a support service provider licensed either in the QFC or in another jurisdiction subject to approval.

The business of holding companies is set out as Permitted Activities under Schedule 3, Part 2 of QFC Law where there is reference to the business activities of holding companies, and the provision, formation, operation and administration of trusts and similar arrangements of all kinds.

According to QFC’s new regulations, the SCR seeks to more clearly define, explain and clarify the activities in which holding companies may engage, such as holding subsidiaries, granting security interest over assets, providing an indemnity, guarantee or similar support to any third party for the benefit of any of its subsidiaries; the acquisition and holding of any interest in any asset whether tangible or intangible for the benefit of any of its subsidiaries; single family office regulations (SFOR).

The new SFOR permits single family offices to provide services to a single family. An SFO is a private company dedicated exclusively to the investment, legacy and financial needs of one wealthy family.

Interest in SFOs has grown over the last decade as wealth has increased around the world. An SFO may take a variety of different forms, but ultimately its primary purpose is to manage the investments and finances of a wealthy single family. These services may include accounting, fiduciary, investment, property management, governance and related services.