3 Challenges of Setting Up a Startup In Doha and How to Overcome Them

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Like its neighboring Arab countries, Doha (capital of Qatar), is very rich because of its oil industry. It is a progressive, modern city with over 1.5 million residents, and the bulk of its economic power all come from its gas and oil companies. Lately, the city also intensified its tourism industry in an effort to lessen their dependence on fuel and oil reserves.

 

Despite efforts to diversify its economy, Doha is still lagging behind when it comes to entrepreneurship. To intensify such efforts, programs had been established to encourage and instill an entrepreneurial mindset among young students – one of those is the Entrepreneurship Centre at the College of the North Atlantic-Qatar (CNA-Q) which does not just provide mentorship for aspiring entrepreneurs, but also training as well.

 

In an interview with Wamda, Curtis Avery, a finance consultant who runs CNA-Q, says that most residents in Doha (or Qatar in general) are hesitant to risk their current income to establish a business that might be more or less unpredictable.

 

Avery says that Qatari employees are already well-paid in general. The average salary is around $100,000, and most would not risk that stability with an uncertain future in business. However, there are quite a few people who do go into entrepreneurship because it has grown to be either their hobby or some kind of passion.

 

Issues with personal stability and uncertainty is not the only obstacle when it comes to doing business in Doha. Certain laws prove to be unfriendly for startups and aspiring entrepreneurs who lack capital such as:

 

The need to set-up a legitimate office.

In Doha, it is illegal to run and manage a business from your home, unlike in the the US or Canada where small businesses can initially open up their garage or basement as a temporary office.

 

Startup entrepreneurs might see this is a huge turn-off because office spaces are expensive to maintain – and it does not help that real estate properties in Doha are more expensive compared to other countries in the world (seeing a 5 to 10% increase in 2015 alone).

 

This is a real challenge for startup entrepreneurs who don’t have a lot of capital to begin with. However, there are more affordable options now with several coworking spaces and serviced offices in Doha.

 

Registration comes with a huge initial deposit in the bank.

Another financial hurdle for startups is the requirement of an initial bank deposit before you can actually register the business. The required deposit is quite high – with the minimum pegged at 200,000 QR, which is almost equal to $55,000!

 

So even before you can start doing business (or registering it for that matter), you need a huge upfront investment to do it all legitimately. That’s because of the leasing costs (of the office space) which would usually need at least a full 3 months or 1 month advance, plus the initial bank deposit for the company account.

 

A possible solution to this is to seek help from the Qatar Business Incubation Center (QBIC). QBIC can offer mentorships, and even seed funding for qualified tech startups. They can even help with the office set-up too!

 

For foreign entrepreneurs, local partnership is necessary.

For expats who have the money and see no problem with the upfront costs to do business in Doha, there is however another problem – you need to find a Qatar-based business partner who should own at least 51% of the company.

 

Well, this does not seem much of a problem, except for the fact that entrepreneurs in Doha (or Qatar) for that matter are a rare kind, since most are not willing to risk a comfortable salary in exchange for the uncertainties of running a business. 51% co-ownership would also put-off some entrepreneurs, considering that is half of the company already.

 

Despite these hurdles, there were a few tech startups that did make quite a buzz in the local scene. One of those is QatarBestDeals, which offers  e-commerce solutions for Qatar’s retail and shopping industry. It partners with several sellers and help them get their products out on the online platform, and connect these companies to their target markets..

 

And it seems that e-commerce is fast becoming a favorite niche in Doha’s tech startup scene, with the rise of eGrab – a startup founded by Rahid Kader. eGrab makes grocery shopping possible for Qataris to do online. The company has partnered with top hypermarkets so residents can simply shop and order their groceries from home. Of course, the goods are delivered right at the customer’s doorstep.