Your First Five Hires in Qatar: Contracts, Probation, WPS and Gratuity for Founders

Your first hires shape the company more than any later round of recruitment. They set the culture, carry the product and often stay for years. In a market the size of Qatar's, a badly drafted contract or a missed payroll rule does not stay private for long, and it can cost real money when someone leaves. Most of the risk sits in a handful of decisions made in the first few weeks: which legal regime applies, what goes in the contract, how probation and notice work, how salaries are paid and what you owe at the end. This guide sets out those basics for founders, and how to add employee equity without creating problems for your next funding round.

This article is general information, not legal advice. Employment rules change, and some of the sources below pre-date recent amendments, so confirm the current position with a Qatar-qualified employment lawyer before you sign contracts.

Step one: onshore or QFC?

Qatar has two main employment regimes for private companies, and the one that applies depends on how your company is licensed.

• Onshore companies follow Labour Law No. 14 of 2004, as amended.
• Qatar Financial Centre (QFC) firms follow the separate QFC Employment Regulations.

The differences are material, as the comparison by Pinsent Masons shows. The rest of this article flags where they diverge.

The employment contract

Onshore: contracts must be in writing. Invest Qatar's labour law guide says they should be in Arabic and should cover the job description, working hours, leave, pay and termination, with a copy given to the employee. Pinsent Masons notes that onshore contracts use the labour ministry's standard template, often with a supplementary contract for additional terms.

QFC: there is no standard form, but the written contract must include minimum terms such as pay, duration, place of work, hours and annual leave.

As general practice, whichever regime applies, make sure the contract (or a separate agreement) also covers confidentiality and assignment of intellectual property created on the job. For an early-stage company, the code, designs and customer relationships your first engineers and sellers create are the business.

Probation, notice and working hours

The figures below are taken from Pinsent Masons' May 2023 guide and, for onshore notice, the ILO's summary of the 2020 reforms.

• Probation: up to six months under both regimes. Onshore, an employer ending employment during probation must give one month's notice. In the QFC it is two weeks.
• Notice after probation (onshore): one month for workers with two years' service or less, and two months for more than two years.
• Notice after probation (QFC): two weeks for under three months' service, one month from three months to five years, and three months above five years.
• Working hours: a maximum of 48 hours a week under both regimes. Onshore, the limit is also eight hours a day, reduced during Ramadan, and overtime must be paid at a premium. Pinsent Masons notes that onshore hours rules do not apply to senior or managerial staff, and QFC limits do not apply to managerial or supervisory roles.
• Annual leave: onshore, three weeks a year for up to five years' service and four weeks after that. In the QFC, at least 20 working days a year after three months' service.

A practical point: a six-month probation is the maximum, not the norm you must use. For senior early hires, a shorter probation with clear objectives often signals confidence and helps you close the candidate.

Paying people: minimum wage and the WPS

Qatar has a non-discriminatory minimum wage under Law No. 17 of 2020. The minimum basic wage is QAR 1,000 a month, plus at least QAR 300 for food and QAR 500 for housing where the employer does not provide them, according to Invest Qatar and the ILO. Few startup roles are near this level, but it matters for operations, logistics and support staff.

Onshore employers must pay salaries in Qatari riyals through the Wage Protection System (WPS), into a bank account in Qatar. Pinsent Masons reports that wages must be paid within seven days of the due date and that late or non-WPS payments can lead to fines of QAR 2,000 to QAR 10,000 and possible restrictions on work permits. QFC firms are not covered by WPS. If you are onshore, set up WPS through your bank before your first payroll, not after it.

End-of-service gratuity and pensions

Onshore: employees who are not in a statutory pension scheme are entitled to end-of-service gratuity after at least one year of continuous service. Pinsent Masons gives the minimum as 21 days' basic pay for each year of service, pro-rated for part years. Because it is calculated on basic salary, the split between basic pay and allowances in your offer letters directly affects what you owe later. Accrue for it every month.

QFC: the Employment Regulations do not require gratuity, as Crowell confirmed in February 2025, though some employers provide it by contract.

Qatari nationals: under State Social Insurance Law No. 1 of 2022, employers must enrol Qatari employees with the General Retirement and Social Insurance Authority (GRSIA). Crowell notes that a 2025 amendment applied this directly to QFC employers too. Check current contribution rates with GRSIA before you make an offer.

Offering equity to early hires

Cash is tight at the start, so many founders use equity to attract their first team. The general practice described by Al Tamimi & Company is a useful baseline:

• Vesting: typically three to four years, monthly, quarterly or by milestone.
• Cliff: commonly one year. Someone who leaves before the cliff gets nothing; at the cliff, the first year's tranche vests at once.
• Leaver terms: good-leaver and bad-leaver provisions decide whether a departing employee keeps vested options, so ex-employees, especially those dismissed for cause, do not stay on your cap table by default.
• Pool size: an option pool dilutes existing shareholders. Agree its size during funding talks and state whether pre-money valuation includes it.

How you implement a plan depends on where the company is incorporated, so take advice early. Promising "1% of the company" in an offer email without a plan document is a common, avoidable source of disputes.

How this fits Qatar National Vision 2030 and NDS3

The Third National Development Strategy targets average labour productivity growth of 2% a year and links it to creating high-skilled jobs, according to Invest Qatar. Startups that hire well, with compliant contracts, transparent pay and real ownership for early staff, are the private-sector employers that strategy relies on. Getting the basics right from the first hire also makes your company easier to invest in: clean employment records are part of every serious due-diligence checklist.

Key takeaways

• Confirm whether you are onshore or QFC before you draft anything. The rules differ on notice, gratuity and payroll.
• Use a written contract (in Arabic onshore) and add confidentiality and IP assignment terms.
• Set up WPS with your bank before the first onshore payroll.
• Accrue gratuity monthly for onshore staff, and design offer letters knowing it is calculated on basic pay.
• Put equity promises in a proper plan with vesting, a cliff and leaver terms.
• Have a Qatar-qualified lawyer review your templates once, then reuse them.

Sources

• Qatar labour law: what employers need to know (10 May 2023) – Pinsent Masons (Out-Law) – pinsentmasons.com
• Labour law practices – Invest Qatar – invest.qa
• Dismantling the kafala system and introducing a minimum wage mark new era for Qatar (30 Aug 2020) – International Labour Organization – ilo.org
• Amendment to the Qatar Financial Centre (QFC) Employment Regulations (25 Feb 2025) – Crowell & Moring – crowell.com
• ESOP in Venture Capital – Al Tamimi & Company – tamimi.com
• Qatar's Third National Development Strategy: the road ahead – Invest Qatar – invest.qa

Photo: Cytonn Photography / Pexels