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New regulations have been introduced that govern the entry, exit, and residence of expatriates in Qatar, including the obligation for a sponsoring employer to provide a bank guarantee for a residency permit.
Law No. 21 of 2015 is the latest incarnation of the law regulating the entry, exit, and residence of expatriates in Qatar. In June 2019, Ministerial Resolution No. 25 of 2019 issued executive regulations under the expatriates law that took effect the day after their publication in the Qatar Official Gazette.
The executive regulations provide further clarification regarding visas and residence permits for the expatriates that are already subject to the expatriates law. In addition to the above, the executive regulations, pursuant to Article 63, contain a new provision that permits the competent authority (defined as a relevant administrative unit at the Ministry of Interior) to require sponsoring employers to provide a bank guarantee upon granting a residence permit to the expatriate. Article 63 requires the bank guarantee to be:
- issued for not less than QAR 2,000 for each expatriate employee, and up to QAR 500,000 regardless the number of the expatriate employees;
- in favor of the Ministry of Interior;
- unconditional;
- redeemable at any time; and
- valid throughout the entire period of the expatriate’s residence permit.
Furthermore, the bank guarantee may be used by the Ministry of Interior to satisfy any obligations of the sponsoring employer to the Ministry of Interior or to its employees.
The mechanisms pertaining to the bank guarantee have yet to be determined; therefore, uncertainties will remain concerning whether a bank guarantee will need to be issued each time an employer commences the residence permit process for an employee or whether it can be issued once based on the labor quota granted to the employer.
Comment
Because the competent authority has the discretion to determine the mechanisms for the issuance of bank guarantees, it is hoped that a system can be introduced that will impose a minimum administrative burden on employers. For example, providing a bank guarantee of QAR 2,000 each and every time an employee is sponsored will be an administrative headache for both the employer and its bank and will also prove to be costly to the employer, as banks generally impose a base fee for a bank guarantee in addition to the commission rate. Basing a bank guarantee amount on the actual labor quota on a one-time basis (to be reviewed when the quota is reviewed) would appear to result in less burdensome administrative issues and lessen the costs of obtaining a bank guarantee.
The Ministry of Interior and the banks in Qatar, came up with a workable solution when the wage protection system was introduced, and it is hoped that those bodies will once again cooperate to come up with a system for implementing Article 63 that will have a minimum administrative impact on employers while still offering the intended protection for employees.
Written by Nusa Gorenjak of Al Tamimi & Co. and Roger James of Ogletree Deakins
© 2019 Al Tamimi & Co. and Ogletree, Deakins, Nash, Smoak & Stewart, P.C.