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Qatar is an attractive country for FDI, with significant opportunities for investment in infrastructure, healthcare, education, tourism, and financial services.
Top Reasons Why You Should Invest In Qatar
- Qatar is one of the fastest-growing economies in the world
- The country was ranked third globally by the World Bank’s 2020 Doing Business Report for its taxation regime as the corporate tax rate is 10 percent and there is no personal income tax.
- Low cost of energy
- Good infrastructures
- Inexpensive labor force provided by migrant workers
- The FIFA World Cup 2022 represent an occasion for investments
- The government provides various incentives to local and foreign investors
- The country enjoys one of the highest per capita incomes in the world
- Political stability
- Investment friendly environment: up to 100 percent foreign ownership in all sectors, extensive economic zones with a tax exemption or full profit repatriation
Investment Sectors in Qatar
Qatar, being incredibly prosperous in terms of GDP and economic growth, offers several investment opportunities. A few of these are: Ministry of energy and industry, Qatar tourism authority, Qatar Rail, Supreme committee for delivery and legacy, Restaurants, Building materials, Information technology, Foods, Installation and maintenance service.
Perks of Investing in Qatar
The Qatari government is very keen to attract investors globally. For that, they offer an excellent range of incentives for the investors to facilitate their business and their investment in Qatar, making company formation in Qatar both lucrative and simple. These include:
The subsidized rate for oil, gas, and electricity, Zero import duty on machinery, spare parts, etc. for the benefit of industrial projects, Tax exemptions for different accounts, Relaxed immigration and investment rules for foreign investors, Excellent telecommunication facilities, Exemption from income tax on salaries, High quality infrastructure facilities, One of the lowest cooperate tax rates in the world which is 10 percent, Efficient transport system, A well balanced demand and supply of utilities, The Companies law that has come into effect in Qatar in 2015 has pulled out various business restrictions and corporate procedures in the country, Presence of special economic zones to facilitate business
Before investing, it is really crucial to choose a specific type of business vehicle that would complement the business operation that you want to pursue. Choosing the correct type of business entity in Qatar is a very crucial step in business investment.
MAIN SECTORS OF INDUSTRY:
Qatar’s agricultural sector is almost non existent due to the country’s climate and a lack of arable land. It is estimated to account for only 0.2 percent of GDP, employing 1 percent of the workforce according to World Bank, 2021 report.
The economy of Qatar is based on the oil and natural gas sectors: proved natural gas reserves represent 13 percent of the world total and the third largest in the world, while proved oil reserves exceed 25.2 billion barrels, which means the production could continue for over 56 years at current levels. Qatar's liquefied natural gas industry has attracted tens of billions of dollars in foreign investment and made Qatar the world’s largest exporter of this commodity. Being the country’s main economic engine and government revenue source, Qatar is highly dependent on the oil and gas sector, thus after the drop in commodity prices in recent years, it tried to diversify its economy, focusing mainly on manufacturing, construction, leading non oil GDP to steadily rise to just over half the total. The construction sector in particular is booming due to the preparation for the 2022 FIFA World Cup of football. Overall, the industrial sector contributes 56.9 percent of GDP and 54 percent of employment.
The services sector is based mainly on financial services and is estimated to account for 46.7 percent of GDP, giving employment to 44 percent of the active population according to World Bank, 2021 report. Tourism is also an important economic sector: The Qatari government expects to increase the share of tourism in GDP to 4 percent from 3.5 percent by 2023.
FOREIGN TRADE:
Qatar's trade policy is essentially focused on creating a modern and liberal economy. This is reflected in its promotion of investment both domestic and foreign, its trade diversification programs at the regional and international levels, and membership in several organizations, such as the WTO. Trade represents 90 percent of the country's GDP in 2019 according to World Bank. Hydrocarbons represented over 85 percent of the country’s exports in 2019 which is mainly natural gas, followed by crude and other oil products, while imports were led by manufactured products with 78.6 percent, especially motor cars, aircraft, and radio telephony transmission tools.
The main trading partners were Japan with 18.6 percent, South Korea with 15.5 percent, China with 12.3 percent, and India with 12.1 percent. Qatar’s leading suppliers were the US with 18.6 percent, China with 11.9 percent, and Germany with 7.1 percent. Qatar has very few trade barriers and relatively low customs duties. It has signed a number of free trade agreements, both bilaterally and via the Gulf Cooperation Council, and has concluded a new trade deal with Pakistan in February 2020.
Benefiting from strong oil and gas revenues, Qatar's merchandise trade balance is structurally positive with 43 billion dollars in 2019, but the fluctuation in oil prices has weighed on the surplus in recent years. Exports decreased in 2019 to 72.9 billion dollars, from 84.2 billion dollars a year earlier while imports were reduced slightly by 29.1 billion dollars against 31.7 billion dollars a year earlier. Like many countries in the region, Qatar remains a net importer of services: imports reached 33.6 billion dollars in 2019, while exports amounted to 18.3 billion dollars. The trade surplus including services was estimated to have fallen to 25.2 billion dollars in 2019, from 36.7 billion dollars the year before according to World Trade Organization in 2021).
The government remains the dominant actor in Qatar's economy, though it encourages private investment in many sectors and is willing to attract more foreign investment. Indeed, as part of its National Vision 2030, the government of Qatar has adopted reforms to encourage foreign investment in the economy.
A new Public Finance Law aims to optimize the use of public funds and introduce international best practices and standards in Qatar’s financial framework.
The government recently introduced reforms modifying the country’s foreign investment regulations by allowing 100 percent foreign ownership of businesses in more economic sectors. The government is also implementing a regulatory regime to curb corruption and anti competitive practices.
Qatar has several free zones like the Ras Boufantas and Umm Alhoul and business facilitation options like the Qatar Financial Centre and Qatar Science and Technology Park. The government established an independent Free Zone Authority in 2018 to supervise free zones in Qatar and provide investors with opportunities and benefits.
Qatar is a peninsular Arab country whose terrain comprises an arid desert and a long Persian Arab Gulf shoreline of beaches and dunes. Also on the coast is the capital, Doha, known for its futuristic skyscrapers and other ultramodern architecture inspired by ancient Islamic design, such as the limestone Museum of Islamic Art. The museum sits on the city’s Corniche waterfront promenade.
Qatar, officially known as the State of Qatar, is an independent emirate in the Gulf Region.
The country is situated on a peninsula that extends from the Arabian Peninsula approximately 160 kilometers north into the Persian Gulf, it is bordered by Saudi Arabia. Qatar shares maritime borders with Bahrain, Iran, and the United Arab Emirates.
The country covers an area of 11,586 kilometers square making Qatar about 1.25 times larger than Cyprus, or also somewhat larger than Puerto Rico.
The emirate has a population of 2.6 million inhabitants as of 2016, but Qatari nationals represent only a minority. The capital and largest city is Doha and the Spoken language is Arabic which is official.
Ruled by the Al Thani family since the mid 1800s, Qatar transformed itself from a poor British protectorate noted mainly for pearling into an independent state with significant oil and natural gas revenues.
During the late 1980s and early 1990s, the Qatari economy was crippled by a continuous siphoning off of petroleum revenues by the amir who had ruled the country since 1972. He was overthrown by his son, the current Amir HAMAD bin Khalifa Al Thani, in a bloodless coup in 1995.
In 2001, Qatar resolved its longstanding border disputes with both Bahrain and Saudi Arabia. Oil and natural gas revenues enable Qatar to have a per capita income not far below the leading industrial countries of Western Europe. Qatar is a member state of the League of Arab States
Qatar is an absolute Islamic monarchy. The Emir is simultaneously the head of state and the head of the executive and the legislative power, also the government is solely responsible to him. The state religion is Islam. According to Qatar's constitution, Sharia law is the main source of Qatari legislation.
FOREIGN DIRECT INVESTMENT:
Foreign direct investment flows into Qatar have generally followed an upward trend in the past several years, thanks to the country's political stability, a stable currency pegged to the U.S. dollar, high quality infrastructure, and one of the lowest corporate tax rates in the world which is 10 percent. However, following the diplomatic crisis with countries such as Saudi Arabia, the UAE, and Kuwait, the Qatari economy experienced a negative impact. This was compounded by the global economic crisis triggered by the Covid 19 pandemic. According to UNCTAD 2021 World Investment Report, FDI flows were negative by a total of USD minus 2.4 billion in 2020, up slightly from 2.8 billion dollars in 2019. The total stock of FDI stood at 28.6 billion dollars in 2020. However, Qatar is also a key international investor, thanks to its large foreign exchange reserves. The largest contributors to FDI inflows are the US, Japan, South Korea, and Singapore, while the main sectors attracting foreign investment are oil and gas, construction, public works, and financial services.
Qatar aims to become a leading country in terms of its business and foreign investment environment. In May 2018, the government approved a draft law that allows non Qatari investors to own 100 percent capital in all sectors, while many Qatar Stock Exchange listed companies have increased their foreign ownership limit to 49 percent. The organization of the 2022 World Cup in Qatar is expected to attract large amounts of foreign investors in the coming years. However, one element that limits the expansion of FDI flows into Qatar concerns its policies governing the private sector, especially due to the long amount of time it took to establish a privatization program. Other elements that hinder FDI are the country's relatively small domestic market, a lack of a skilled workforce and high cost of living, and the current diplomatic and commercial relations with other Arab countries. The public private partnership program launched recently is expected to improve the situation. Qatar ranked 77th out of 190 economies in the 2020 Doing Business report issued by the World Bank, up by six spots compared with a year earlier. The rise was mainly due to a significant improvement with regard to registering property. The close relations between Qatar and Turkey have resulted in strong Foreign Direct Investment flows between the two countries.
Economy of Qatar
Qatar, being an investment friendly country, has one of the richest economies in the world. It is a highly developed country with one of the highest GDPs in the world. Oil and gas are the two cornerstones of the Qatari economy as it has the world's third biggest gas reserves and oil holds, contributing more than 70 percent of the total government earnings, 60 percent of the GDP, and about 85 percent of export earnings. On a per person basis, Qatar is now the wealthiest country in the world. The primary industries in Qatar include:
Liquefied natural gas, Crude oil, Ammonia, Fertilizers, Petrochemicals, Reinforcing steel, Cement, Ship repair, Construction material
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Conclusion
Qatar ranked 77th out of 190 economies in the World Bank's 2020 Doing Business report. The government remains the dominant actor in Qatar's economy, though it encourages private investment. Qatar is 1.25 times larger than Cyprus, or also somewhat larger than Puerto Rico.
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