Invoice Finance and Factoring Debt in Qatar
We were recently approached by a UK business with a subsidiary in Qatar. They were looking for an invoice discounting facility for the Qatari subsidiary. There was already an invoice finance facility in place but the delivery of the facility was cumbersome and expensive.
We were able to put in place a $6m facility that was cost effective and easy to operate. Rather than taking a direct assignment of the debt the preferred route was to actually take a pledge over the shares of the business. This is due to the complications in assigning debt in this region.
In Qatar, when assigning receivables, the receivables should be both identifiable and quantifiable at the time of executing the assignment agreement. Generally, an assignment is a process of transferring rights and/or obligations held by one party—the assignor to another party—the assignee. Assignment agreements relating to assignment of rights (or receivables) are typically bilateral agreements between the assignor and the assignee with a notification sent to the debtor. The assignment agreement, relating to an assignment of obligations in general is a tri-party agreement, between the debtor, the creditor and the assignee. An assignment of debt requires the prior approval of the creditor, and not merely acknowledgment of the creditor. If the creditor received a notification of the assignment of debt and does not respond within the deadline stipulated under the notification, the assignment will be deemed rejected by the creditor. However, the assignment shall be effective between the original debtor and the assignee, even if the creditor rejected the assignment, hence, the assignee shall be obliged to pay the debt, when due, to the creditor.
The complexities of debt assignment make traditional invoice discounting facilities very cumbersome to administer and almost impossible given the requirements for assignment.
If you are looking for an invoice finance facility in Qatar, be that invoice discounting or invoice factoring, get in touch with Funding Solutions and we can talk you through your options – 0845 251 4040.