Due Diligence Checklist for Acquisitions in Qatar, Oman and Bahrain

Qatar, Oman, and Bahrain stand out as acquisition destinations because of their pro-investment reforms, but they also require careful due diligence. This guide outlines the due diligence for acquisitions in Qatar, Oman, and Bahrain by looking at recent legislative changes.

Qatar, Oman, and Bahrain have emerged as attractive destinations for foreign acquisitions, thanks to recent pro-investment reforms and business-friendly policies. However, successfully navigating these markets requires careful due diligence across legal, regulatory, financial, and operational dimensions.

This guide provides an overview of key considerations for investors, including corporate structures, licensing, taxation, labor obligations, and sector-specific requirements, helping to ensure informed decision-making in these dynamic Gulf markets.

Legal and regulatory framework

Corporate structures and foreign ownership

In Qatar, Law No. 1 of 2019 permits up to 100 percent foreign ownership across most economic sectors with approval from the Ministry of Commerce and Industry. The Ministry has listed roughly 1,000 activities eligible for full ownership, spanning construction, trading, transportation, education, healthcare, hospitality, and technology. However, restrictions continue in banking and insurance, where Council of Ministers approval is mandatory, as well as in commercial agencies and real estate development.

Oman modernized its regime under the Foreign Capital Investment Law (Royal Decree No. 50/2019). It allows full foreign ownership in areas such as manufacturing, renewable energy, IT, fintech, education, and medical services. Businesses in Special Economic Zones also benefit from enhanced investment options. Starting April 1, 2025, all foreign-owned companies must employ at least one Omani national within their first year and register them with the Social Protection Fund.

Bahrain maintains the most liberal framework. Its Commercial Companies Law allows 100 percent foreign ownership in most sectors. Foreign and GCC investors receive treatment equal to Bahraini nationals. The law was updated under Decree-Law No. 38 of 2025 and expanded liability to shadow managers and digital governance frameworks.

Licensing and permits

In Qatar, financial services require approval from the Qatar Central Bank (QCB). The QCB has also created new licensing categories like for Buy Now Pay Later services and insurance comparison sites. Oil and gas operations continue to fall under Qatar Petroleum’s licensing authority.

Oman’s Banking Law (Royal Decree 2/2025) grants the Central Bank broader powers to regulate digital and investment banks. It defines two license categories: Category 1 requires OMR 30 million (US$78 million) in minimum capital with unlimited operations, while Category 2 requires OMR 10 million (US$26 million) but comes with restrictions. Licensing in Oman’s free zones and Special Economic Zones has been streamlined through a one-stop-shop under Royal Decree 38/2025.

Bahrain’s licensing system is centralized through the Sijilat Commercial Registration Portal. It offers quick access to eligible activities and streamlined free zone licensing. Investors can secure licenses in as little as three weeks, provided that documentation is complete.

Financial and tax considerations

Qatar applies a flat 10 percent corporate tax on Qatar-sourced income for foreign-owned businesses. Firms that are wholly owned by Qataris or GCC nationals are exempt from paying tax. Large multinational enterprises should comply with the OECD Pillar Two global minimum tax which means an effective 15 percent rate.

Oman imposes a standard 15 percent corporate income tax, but qualifying small and medium-sized enterprises (SMEs) may benefit from a reduced 3 percent rate. Petroleum companies pay 55 percent under specific agreements. From January 2025, Oman introduced a domestic minimum top-up tax of 15 percent for multinational firms with revenues exceeding OMR 300 million (US$780.2 million).

Bahrain remains attractive with no general corporate income tax, except for oil and gas companies taxed at 46 percent. But corporate income tax is under parliamentary review as part of the 2025–2026 budget. Bahrain already levies VAT at 10 percent, doubled from the original 5 percent in 2019.

Employment and labor obligations

Workforce nationalization

Qatar’s Qatarization Policy aims to increase national representation in the private sector from 19 percent to 20 percent. Its Cabinet approved a legislation in December 2023 which introduces phased quotas between 2025 and 2027, and incentives and potential government salary contributions.

Oman targets an Omanization rate of 30 percent by 2040, up from 19 percent in 2021. Ministerial Decree No. 501/2024 reserves more than 30 professions exclusively for Omani nationals in sectors of IT, engineering, and hospitality management. Digital banks need to comply with stricter requirements. It begins at 50 percent in year one and rises 10 percent annually to reach 90 percent by the fifth year.

Bahrain’s Economic Vision 2030 aims for a 65-75 percent localization rate by 2030, compared with 55 percent in Q1 2021. There are draft regulations under review which could cap foreign workers at 30 percent of the private sector. It will primarily affect sectors like medical, legal, accounting, education, banking, and aviation with stricter norms.

Compliance and benefits

Employment contracts should be as per local labor laws on gratuity, pensions, and health insurance, because non-compliance carries strict penalties. Bahrain imposes fines from BHD 1,000 to BHD 4,000 (US$2,651.9 to US$10,607.7) for violations and can suspend businesses for up to one year. Oman provides a 30-day grace period for companies that fail to meet localization requirements, but electronic flags get raised during registration renewal.

Commercial contracts

Commercial agency agreements across the three jurisdictions traditionally provide strong protection to local agents, though recent reforms are changing this. The UAE’s new Agency Law, effective June 15, 2025 for old registered commercial agencies, introduces more balanced termination rules and allows arbitration for disputes.

In the three jurisdictions, commercial agency agreements has to be registered with the relevant ministry of commerce and industry. Registration requires the agency agreement itself, the principal’s commercial registration certificate, and a power of attorney authorizing the agent. Investors need to examine these contracts carefully, as they often contain clauses on compensation for unjustified termination, tied to both prior investments and projected profit loss.

Sector-specific approvals and risks

Financial services licensing

Acquisitions in financial services demand particular attention to licensing. In Qatar, the central bank has expanded its framework to cover fintech models such as Buy Now Pay Later and insurance comparison platforms. Applicants now need to provide business plans, financial analyses, timelines, and justification of economic value to the Qatari economy.

Oman has adopted a new Banking Law that broadens the authority of the Central Bank of Oman. The regulator can now license digital and investment banks, establish and own companies, and enjoy exemptions from capital, property, and profit taxes. Digital banks face capital requirements of OMR 30 million for a full license and OMR 10 million for a restricted license.

Bahrain continues to offer one of the GCC’s most reliable frameworks for banking and insurance licensing. Its reputation as a regional financial hub comes from the breadth of its regulatory infrastructure, which provides confidence to foreign investors entering financial services.

Real estate and property rights

Qatar restricts foreign real estate ownership to designated areas, though freehold is available in some zones. Projects outside these areas require ministerial approval.

Oman’s Special Economic Zones and Free Zones Law provides land allocation through usufruct rights and allows developers to sell project units to non-Omanis under a freehold system.

Bahrain operates the most open market of the three, permitting 100 percent foreign ownership, freehold property rights, and capital repatriation. The kingdom also offers rental yields among the highest in the GCC at around 7 percent.

Compliance and ESG requirements

Compliance with anti-money laundering (AML) and counter-terrorist financing (CTF) rules is mandatory in all three jurisdictions. Environmental, social, and governance (ESG) reporting is also becoming important. Oman and Bahrain made ESG reporting mandatory in 2025, and Qatar continues with voluntary guidance as it pursues a 25 percent reduction in greenhouse gas emissions by 2030. Oman’s Muscat Stock Exchange now requires ESG reporting under Global Reporting Initiative (GRI) standards, covering activities from 2024. The Central Bank of Oman’s guidance links ESG compliance to the UN Sustainable Development Goals.

Bahrain’s environmental framework is working towards a circular carbon economy, and thus offers offsetting schemes like carbon capture and afforestation to achieve its net-zero emissions target by 2060. Qatar’s National Climate Change Action Plan has similar ambitions with a focus on measurable emission reductions.

Operational and infrastructure due diligence

Foreign investors benefit from the free zone regimes in all three jurisdictions. Qatar’s Free Zone Authority permits 100 percent foreign ownership, exemption from corporate tax, unrestricted currency movement, and capital repatriation. It also issues licenses for professional, commercial, and industrial activities and provides visa sponsorship for staff. It offers a lot of facilities, from flexi-desks to full-scale warehousing in Doha’s Corniche area.

Oman’s SEZ and Free Zone Law grants 10-year tax exemptions, extendable for two further terms for activities deemed strategic. The law has centralized approvals through a one-stop-shop system for easier licensing and permit requirements.

Bahrain effectively operates as a nationwide free zone. It offers 100 percent land rental rebates for three years in government industrial areas, 50 percent electricity rebates for five years, and no import or export duties. Bahrain has had a long-standing policy of unrestricted foreign ownership and tax exemptions for foreign investors and acquirers.

Government relations and political risk

Certain strategic sectors in all three jurisdictions may require joint ventures with state entities or government participation. Qatar has government’s direct involvement in oil and gas through Qatar Petroleum, and investment in banking or insurance requires approval of Council of Ministers. Oman’s petroleum sector operates under production-sharing agreements with government participation. In Bahrain, requirements vary by sector, though its approach to state participation tends to be lighter compared to Qatar and Oman.

All three countries have reassurance of policy stability. Each jurisdiction has established laws that safeguard existing incentives during transitions to a new regulation. For example, Oman’s legislation protects operators’ rights to previously granted advantages, tax exemptions, and other benefits until the expiry of their operational periods.

Takeaway

Acquisitions in Qatar, Oman, and Bahrain present opportunities for foreign investors, but the due diligence process must be rigorous. Investors should assess ownership frameworks, licensing requirements, corporate taxation, VAT compliance, and labor nationalization policies before finalizing deals.

Foreign firms can use professional help to explore the potential of these market and navigate certification requirements. For professional assistance and enquiries about doing business in the Middle East region, please contact our Dubai offices at dubai@dezshira.com.

Read more: Occupational Health and Safety Obligations in GCC Workplaces

(US$1 = BHD 0.38 = OMR 0.38 = QAR 3.64)

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