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Owners in Qatar usually meet the question of value at a turning point: a partner leaves, an investor arrives, a family company is restructured, or assets are put into a new company in place of cash. Each time, someone has to put a figure on the business or on a share of it.
There is no single correct figure. A valuation is an estimate, and the result depends on its purpose, its date and the method used. International standards describe the methods. Qatari law decides when a value must be set, who sets or checks it, and what happens if it is wrong.
This guide explains the three approaches in plain words and the occasions when the Commercial Companies Law or the tax rules call for a value, with the source for each rule.
- Approaches
- Income, market, cost
- Standards
- IVS and IFRS 13
- Capital gains return
- Within 30 days
- Law checked
- 16 October 2026
The short answer
In short
- The International Valuation Standards (IVS) and IFRS 13 describe three principal approaches: the income approach, the market approach and the cost approach.
- Trading businesses are usually valued on income and market evidence. Net assets matter most for asset-holding companies and for start-ups whose profits cannot yet be reliably estimated.
- The purpose comes first. A sale, a partner exit, a contribution in kind, a tax return and the accounts can each call for a different basis of value and a different figure.
- In Qatar a value matters for in-kind contributions, LLC share sales when partners disagree on price, mergers, share disposals taxed on the higher of price and fair value, and deals involving listed companies. See our business valuation service.
Value for what purpose?
Before any method is chosen, a valuation needs four things settled: the purpose, the basis of value, the valuation date and the intended user. The same company can carry different figures for different purposes.
In a sale or purchase, the value is the price a buyer and seller might agree, reflecting the buyer’s view of future cash flows and risks. A partner exit is often governed by the memorandum of association or a shareholders’ agreement, which may set a method or a date. A contribution in kind needs the value placed on assets or a business put into a company in return for shares or a share of capital.
Accounts work on a different basis. IFRS 13 defines fair value as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date, so it is an exit price. See our IFRS advisory and conversion service. For tax, the figure that matters is the fair value used in working out a gain on a share sale. In a dispute, the court or the parties’ agreement may call for an independent value.
The IVS can be made mandatory by a body with legal authority over the purpose, adopted by a professional valuation organisation, or agreed between the client and the valuer. Check whether the person relying on the valuation expects a particular standard.
The three valuation approaches
The IVS name the market, income and cost approaches as the principal approaches, and say one or more may be used. No single method suits every situation; the valuer selects the most appropriate one and should prefer observable inputs where possible.
| Approach | What it uses | Common methods | When it fits a business | Main risk |
|---|---|---|---|---|
| Income | Projected cash flows converted to a single current value | Discounted cash flow; capitalised earnings | Commonly applied, especially to profitable businesses with a credible forecast | The forecast and the discount rate drive the result |
| Market | Prices of identical or similar businesses or shares | Listed comparables; comparable transactions; prior offers or deals in the same business | Frequently applied where good comparable data exists | Needs a reasonable basis for comparison |
| Cost or net assets | The cost of obtaining an asset of equal use, or the business’s assets less liabilities at current values | Adjusted net assets | Rarely for trading businesses; considered for start-ups and asset-holding companies | Can miss value the business earns above its assets |
For businesses, the IVS describe the market approach as frequently applied, the income approach as commonly applied and the cost approach as rarely applied. The exception is an early-stage or start-up business whose profits or cash flow cannot be reliably determined: there the valuer must consider the cost approach.
Market evidence for a business can come from three places: public markets for similar businesses, the market for acquisitions of businesses, and earlier transactions or offers in the business itself. In each case there must be a reasonable basis for comparison. An income approach is only as good as the forecast behind it; see our business plans and financial models service.
How the approaches are combined
A careful valuation rarely rests on one method alone. A common pattern is to use one approach for the main conclusion and another as a cross-check. If a discounted cash flow points to a value far from what similar businesses have sold for, the reasons need to be found and explained.
Two further questions often change the figure for a share rather than the whole business: whether the share carries control or is a minority stake, and how easily it can be sold. Both are matters of judgement, and the report should explain how they were treated.
Example only. A family trading company has steady profits and a clear three-year forecast, so the valuer uses a discounted cash flow as the main method. As a cross-check, the valuer looks at recent sales of similar trading businesses and at an offer the owners received two years earlier. The company also owns a warehouse, and its current value is checked separately because the income approach may not reflect it fully. The report then states a range, explains why the methods differ and sets out the assumptions that move the result most.
Findings from due diligence, such as unrecorded liabilities or customer concentration, often feed directly into the forecast and the risk assumptions.
When Qatari law or tax needs a value
Several rules in Qatar turn on the value of a business, a share or assets. The table lists the main ones under Law No. 11 of 2015 (the Commercial Companies Law), the Income Tax Law and its Executive Regulations.
| Occasion | What the rule says | Who sets or checks the value | Source |
|---|---|---|---|
| In-kind contribution to a joint stock company | At the founders’ request, experts approved by the Ministry check the valuation; the report is due in 30 days and goes to subscribers at least 15 days before the constituent assembly | Ministry-appointed experts; the constituent assembly approves | Companies Law Arts. 158, 90(4) |
| Capital increase for in-kind assets | Shares may be issued for in-kind contributions | As for in-kind contributions | Companies Law Art. 192(4) |
| In-kind contribution to an LLC | The memorandum states the type and value; the contributor answers for any shortfall, with the other partners, for three years | The partners | Companies Law Art. 232 |
| LLC share sold to a non-partner | Other partners may buy at the real price on the same terms within 30 days, unless the memorandum says otherwise | The company’s auditor, if partners disagree on price | Companies Law Art. 238 |
| Merger or conversion | The merger contract sets the valuation of net worth; on conversion each partner receives shares equal to the value of their share | Under the in-kind contribution rules | Companies Law Arts. 274, 277, 278(2) |
| Disposal of shares, for tax | Gain is the higher of sale price and fair value, less the seller’s share in the capital; return within 30 days | The taxpayer, with supporting documents | Regulations Arts. 5(2)(c), 29(2) |
| Group restructuring | Gains on transfers within a group are not taken into account if conditions are met; assets recorded at market value or net book value | The taxpayer applies; the GTA decides in 30 days | Decision No. 3 of 2026 |
| Listed entity | Financial evaluation for any process related to a listed entity needs a registered evaluator | An evaluator on the QFMA list | QFMA |
Under the Income Tax Law, capital gains on the disposal of shares in companies resident in Qatar or listed on its markets are income realised in Qatar (Article 3(4)). The standard corporate income tax rate is 10% (Article 9). Some gains are exempt, such as those of natural persons on securities not part of a taxable activity (Article 4). For the wider picture, see taxes in Qatar for companies and capital gains tax in Qatar.
Group restructuring relief under Council of Ministers Decision No. 3 of 2026 requires, among other conditions, that both parties are resident, taxable and related for at least 12 months. If the conditions are later breached, the gain becomes taxable from the year of benefit. Our tax advisory and business restructuring pages describe related support, and our mergers and acquisitions page covers deals. For new companies, see company formation.
What a valuation report should contain
A valuation report should let a reader understand how the figure was reached and check whether it fits their purpose. Look for:
- The purpose, the intended users and the valuation date.
- The basis of value, such as fair value or market value, and any standard followed.
- The information relied on, and who provided it.
- The approaches and methods used, and why they were chosen.
- The key assumptions, and how sensitive the result is to them.
- The conclusion, as a point or a range, and its limitations.
Treat a report that promises a “true” or “accurate” value with care. A valuation is an estimate, and a good report says so.
What to prepare
Checklist
- Audited financial statements for recent years, and current management accounts.
- Budgets and forecasts, with the assumptions behind them. See our budgeting and forecasting service.
- The memorandum and articles, and any shareholders’ agreement, including pre-emption or valuation clauses.
- A list of significant assets, loans and contracts.
- Details of any earlier offers, transactions or valuations in the business.
- A short note of the purpose, the valuation date and who will rely on the report.
Who should not value your company
An auditor may not audit a company to which it provides consultancy work (Law No. 8 of 2020, Article 27). A company’s auditor should therefore not also act as its valuation adviser, and a firm that values your business should not also be your auditor.
This is different from the statutory role the Commercial Companies Law gives the company’s auditor in fixing a disputed LLC share price (Article 238). For listed entities, the valuation must be done by a financial evaluator registered with the Qatar Financial Markets Authority (QFMA).
What to do next
Write down why you need a value, the date it should refer to and who will rely on it, then check your memorandum for any valuation clause. Valuation is one of the business advisory services in Qatar that companies use before a sale, a share transfer or a restructuring. Our business valuation service and the other advisory services describe how we help you prepare. To discuss your case, request a proposal.
Frequently asked questions
What are the main methods of business valuation?
The income, market and cost approaches, as described in the International Valuation Standards and IFRS 13. The income approach uses expected cash flows, the market approach uses prices of similar businesses or deals, and the cost or net assets approach uses what the business owns less what it owes, at current values.
Which valuation method is best for a small company in Qatar?
No single method suits every case. Trading SMEs with steady profits are usually valued on income and market evidence. Start-ups and asset-holding companies may need a net assets approach. The purpose of the valuation, such as a sale or a partner exit, also shapes the choice.
Is a valuation required when contributing assets in kind to a Qatari company?
For a joint stock company, experts approved by the Ministry check the valuation and the constituent assembly approves it (Companies Law Articles 158 and 90). For an LLC, the value goes in the memorandum, and the contributor answers for any shortfall for three years (Article 232).
How is the price set when an LLC partner sells to an outsider?
Unless the memorandum says otherwise, the other partners may buy the share at its real price on the same terms within 30 days. If they disagree on the price, the company’s auditor fixes it at the date of purchase (Commercial Companies Law Article 238).
How is the gain on a share sale calculated for tax in Qatar?
The gain is the higher of the sale price and fair value, less the seller’s share in the capital, with all supporting documents (Executive Regulations Article 5(2)(c)). The capital gains tax return is due within 30 days of the contract or the disposal, whichever comes first (Article 29(2)).
Who can value a listed company in Qatar?
Only a financial evaluator registered on the Qatar Financial Markets Authority list may carry out financial evaluation for any process related, directly or indirectly, to a listed entity. Check the QFMA list before appointing an evaluator.
Can our auditor also value our business?
Not as a consultancy engagement. An auditor may not audit a company to which it provides consultancy work (Law No. 8 of 2020, Article 27). Fixing a disputed LLC share price under Commercial Companies Law Article 238 is a separate statutory role.
Sources
Laws and regulations
Valuation and accounting standards
This article is general information, not valuation, tax or legal advice for your company. A valuation is an estimate within a range. The laws and regulations cited were checked on 16 October 2026; English descriptions of Arabic legal texts are our own. A firm that values your business should not also be your auditor.