It’s looking good for Qatar in 2013 and beyond, economically speaking. Just what you need to hear when you’ve taken the decision to start a business there. And why wouldn’t you? For this oil-rich Middle Eastern country – often dubbed the richest country in the world – really fits the bill when it comes to opportunity. Think 2022 FIFA World Cup and the string of billion-dollar infrastructure projects about to kick off as a consequence.
Qatar is a perfect location in terms of emerging markets and international trade. It also has some of the finest commercial banks around, ready and willing to offer the foreign investor a bit of financial clout. Banks, such as HSBC, employ some of the sharpest business minds in the region. And they also offer invaluable intelligence and insights, not to mention a range of export and import services rightly regarded as second-to-none.
The full range of trade services, everything from factoring to documentary credits and more, is ready and waiting and available for any foreign investor looking to Qatar to start up or expand their business horizons. And the omens are looking very positive indeed, according to the latest report from Qatar’s General Secretariat for Development Planning (GSDP).
His Excellency Dr. Saleh Al-Nabit, the GSDP secretary general, says in the foreword to the updated Qatar Economic Outlook 2012-2013 that 2012 marks a watershed for Qatar, as the non-oil and gas sector now accounts for most of the economy’s expansion.
Dr. Saleh says, “This pattern will be repeated in 2013 – and for the foreseeable future. Recent data confirm that fiscal revenues are starting to diversify more widely, a trend that will lead to sustainable financial foundations for the future.”
And he adds, “Consumer price inflation has edged up in 2012 and is expected to accelerate some more over 2013. But inflation remains mild and is unlikely to present a threat to macroeconomic stability. The authorities will continue to deploy their regulatory powers to prevent traders imposing unjustified hikes on consumer prices.
“The central bank has also been vigilant in managing credit growth and has a full armoury of effective tools to manage domestic liquidity. Qatar’s banks are well capitalised and strengthened prudential management practices should protect their asset quality from deteriorating.”
Investing in Qatar
According to the US government, foreign and local companies are required to obtain a commercial registration from the Ministry of Business and Trade (MOBT) in order to do business in Qatar.
Generally, under Law No. 13/2000 (the “Foreign Investment Law”), foreigners may invest only through the medium of a joint venture company incorporated in Qatar in which one or more Qatari persons or 100% Qatari-owned entities hold no less than 51% of the share capital.
Joint venture companies with Qatari partners are allowed in all sectors of the economy excluding commercial agencies and real estate. Establishing a joint venture in the banking and insurance sectors is possible with an approval from the Cabinet of Ministers.
However, there are exceptions where 100% foreign investment is allowed. Subject to an exemption from the MOBT, the Foreign Investment Law allows foreign firms 100% ownership of the share capital of companies developing projects in the fields of agriculture, industry, health, education and tourism, as well as projects involved in the development and exploitation of natural resources or energy or mining, pending approval from the government.
The law specifically prohibits foreign investment in banking, insurance, commercial agencies and procurement or purchase of real estate. However, Law No. 31/2004 allows foreign investment in the banking and insurance sectors upon approval of the Cabinet of Ministers. Each application is reviewed on a case-by-case basis and foreign firms working in sectors not specifically mentioned in these laws may be granted a 100% ownership on a case-by-case basis, upon approval of the MOBT.