Business Climate in Qatar

Entry Visa Requirements Investment Atmosphere The Local Private Sector Opportunities of Industrial Investment Privatization Program Qatar Science & Technology Park Qatar Financial Center Doha Securities Market Qatar Chamber of Commerce and Industry Banking and Financial System

Economic Reform Procedures

Qatar is reforming its economic polices to cope with the effects of the declining oil prices, reduce financial imbalances, reassure and stimulate the private sector and continue the effort to intensify diversification, economic flexibility and liberalization.

The effort was very successful and resulted in the establishment of enterprising petrochemical and other heavy industries. The present decline of oil prices gives a strong motivation to intensity efforts, start privatization programmed, remove obstacles impeding private investment and growth and enhance economic performance efficiency by restructuring the state's budget.

On the other hand, the state is concerned with preparing draft laws which stipulate that non-Qatari investors can own more than half of the shares of joint ventures, alongside with other incentives aiming to stimulate the contribution of the private sector in the development process.

The Ministry of Finance, Economy and Commerce has signed a number of agreements with several countries on economic, commercial and technical cooperation, joint mutual investment protection and tax duplicity prevention in line with the state's efforts to strengthen economic relations with the world and consequently attract foreign investments and facilitate exchange of capitals with foreign markets. The importance of these agreements is reflected in the legal guarantees they provide for the economic activities of national and foreign investors inside Qatar and abroad. Reforms are carried out in a setting of a democratic background.

His Highness the Emir has announced the formation of a committee responsible to draw   out a permanent constitution and prepare for the election of a new advisory council by direct and free ballot. 

 This will give the country a good image and make investors more confident when they   know they have all the guarantees in a State where law and order are prevailing.

Qatar grants tourist visas at border points for the nationals of more than 33 countries including USA, Canada, Iceland, West European countries, and some East European countries, Japan, Singapore, Malaysia, Hong Kong, South Korea, Brunei, Australia and New Zealand, besides the nationals of the GCC countries. Visit visas for the residents of the GCC countries and their companions are issued at border points, while entry visas for businessmen coming from places other than the countries mentioned above need to be arranged beforehand.

Visitors on tourist visas are required to use Qatar Airways to enter the country. The passport section at Doha international airport can issue renewable 14-day tourist visas in 24 hours for all visitors to Qatar with the exception of travel documents holders. Such visitors should have their next of kin living in Qatar, and they are not required to have residence permits in one of the GCC countries in order to get a tourist visa. This arrangement goes in line with the policy of openness currently prevailing in various fields in the State of Qatar.
For more information, please visit the www.gov.qa, www.moi.gov.qa

Qatar is taking active steps to make itself more investor friendly. with economic and financial stability It enjoys a very high degree of political, social and internal stability, good and balanced relations with all countries of the region and a distinguished geographical location and international standing, which created a healthy investment atmosphere and made the country an ideal place of opportunity where investors can realize substantial profits.

the Foreign Investors may invest in all sectors of national economy Provided that they shall have, Qatari partner(s) whose share In the capital shall not be less than 51 % and the company is legally established in accordance with provisions of law.

The Foreign investors may, upon Minister’s decision, increase their share in project capital from 49% up to 100 % in the fields of agriculture, industry, health, education, tourism, development and exploitation of natural resources, energy or mining. For more details regarding to that please refer to the Law No. (13) Of the year 2000 ، Law No.(31) of the year 2004 on Amendment of some provisions of Law No.(13) of the year 2000

Incentives Designated for Foreign Investor

The most important incentives offered for foreign investors include:

• Investment law is stable and distinct. They contain all required guarantees.
• Stability of exchange rates, freedom to deal in foreign currencies and flexibility of interest rates.
• Exemption from customs duty charges on equipment, machinery, spares parts and raw materials.
• Protecting national industrial products by means of having protective tariffs on, restricting the quantities of or barring competing commodities.
• Customs duties are as low as 4%, and heavy equipment and spare parts are customs duty free
• A prerogative for national products to have a price margin increase of 5% and 10% against the GCC and international products consecutively, when competing for government purchases.
• Electricity at subsidized rates equivalent to 106 US. Cents per Watt/ hour for industries and 2.74 US. Cents for hotels.
• Water services at the equivalent of 1.3 US. Dollars per cubic meters.
• exempted from income tax effective from the date of commercial
• the GCC national investors are treated as Qatari's in the current law
• Freedom to remit capital and revenues outside the country.
• Freedom to remit staff remuneration outside the country.
• Exemption from export fees on products.
• Easy visa services for low-costing foreign workforce.
• Easy loan terms from Qatar Industrial Development Bank.

In addition to the incentives provided by the State for the local private sector, national products have precedence in government purchases provided that they can be compared to similar imported products in terms of type, quality and price. They have a prerogative. To have 10% margin of price increase over similar imported commodities. This means that attention and encouragement are also directed forwards setting up industries on economically viable basis.

Law No 1 of 1980 on industrial organization protects local products by levying protective tariffs on competing imported commodities for a limited period, with due consideration to the quality and quantity of local products.

Industrial establishments are also protected at the level of the GCC countries by the provisions of law N° 7 of 1989 on the unified system for the protection of industrial products of GCC national origin.

Several companies from the private sector started to invest on industries and contributed in establishing small and medium-scale industrial projects in the filed of oil, gas, petrochemicals, metal casting, metal ware manufacture and marketing of products in local and international markets.

The State has contributed in the establishment of giant joint stock companies such as Qatar Industrial Manufacturing Company which continued to develop steadily since its inception in 1989, and which has already started to make profit by virtue of the success of its projects.The company has implemented nine projects, all of which are successfully operating, and making profits, in addition to other five new projects including Nitrogen production, dates packaging, briquette iron production, plastic bags production and olive oil packaging. The establishment of Electricity and Water Company is underway.

It shall be a major joint stock company with a capital of QR 1 billion. In December 1998 45% of the shares of Qatar Public Telecommunications Corporation (Q- TEL) were put to tender for national and foreign investors, paving the way for the establishment of a new joint stock company named Qatar Communications Company.

The Qatari Arab Investment Company was established in November 1997 with a capital of 100 million US. Dollars. It IS part of the effort of enhance the pan-Arab market and stimulate the investments of the private sector in the Arab countries.

The North Gas Field development agreements were in line with the State's policy to develop industry and diversify the fields of investment. Qatar has after extensive study, opened the doors of gas sector for foreign investments and sought the best possible partnership offers in exploration and production, in accordance with a large-scale program aiming to develop and optimize the utilization of gas resources.

In this respect, new policies of economic and commercial liberalization aiming to stimulate and expand the involvement of foreign investments and national private sector in Economic activities have been adopted. Several steps have been taken, foremost, the issuance of new laws serving to attract foreign capitals and stimulate and support the role of the private sector. The State is exerting an outstanding effort to create opportunities of industrial investment and prepare feasibility studies.

It is facilitating the investors' participation in all phases of project implementation, offering exemptions from customs duties charges and permitting unrestricted amount of imported materials, in addition to the prerogatives designated for joint ventures. Inflation rates in Qatar are generally moderate.
The average inflation rate during the past five years was registered at 2.5% and deficit in the Qatari budget is expected to disappear by the year 2000.

The State of Qatar has completed the transformation of Qatar Public Telecommunication into a joint stock company under the name of Qatar Telecom.
This was the first phase of privatization program prepared in collaboration with the World Bank.

45% of the shares of (Q-TEL) were offered for sale for all investors without exception, which reflects the strong resolve of the government to involve the private sector in the development process and which is considered a daring step to attract foreign capitals to participate in successful Qatari projects.

The privatization programmed serves the strategic objectives of realizing economic development, upgrading the performance of companies and improving the standard of services extended to citizens and residents. Privatization shall doubtless help in vitalizing the activities of the Qatari bourse.

It is seen as a means of achieving a number of goals including contributing to remedy the budget deficit, reducing administrative and financial burdens, increasing economic growth rates, reducing the prices of commodities and services and enlarging the ownership base in society.

The privatization programmed carried out by the state is expected to cover other giant establishments. Privatization drive has been introduced to Qatar relatively late.

However, it is now on track moving consciously in accordance to plans aiming to restructure the country's economy, taking into consideration all factors that could affect the banking system and the size of liquidity available inside and outside the country.

In September 2005 the Government of Qatar established the Qatar Science & Technology Park free-trade zone to attract foreign companies to investing applied research and development.

The QSTP free zone allows businesses to be established that are 100 percent foreign owned and free from tax and duties. Further, those businesses can trade without a local agent. Applicants have the choice of operating as a branch of an overseas company or incorporating a new local company.

In return for these benefits, companies at QSTP are required to make technology development their main activity. This can include applied research, the development and testing of products and services, or technology-related training.

QSTP provides an attractive environment for technology-based companies. It is part of Qatar Foundation, which includes campuses of major international universities such as Carnegie Mellon, Cornell, Georgetown, Texas A&M and Virginia Commonwealth. QSTP's buildings can handle large-scale laboratories as well as being fitted with world-class offices. Chaired by Her Highness the Wife of the Emir, Qatar Foundation and its science park are prominent in the Qatar community.

Current tenants of QSTP include EADS, ExxonMobil, Microsoft, Shell and Total. The science park is looking to attract further companies now that its free zone has been established and the opening of its new buildings - slated for mid 2007 - draws nearer.

More information on QSTP can be found at www.qstp.org.qa website.

On 16th February, the State of Qatar ratified new legislation designed to attract international financial institutions and multi-national corporate to establish them in a best-in-class international financial centre in Doha – the Qatar Financial Centre.

Qatar has become a significant player in the global economy. The establishment of an international financial centre represents Qatar’s next move to ensure its continued economic success and development. For the international business community it provides an exciting new window to access and share in the enormous wealth being created in the region.

The Centre has been designed to attract international financial services institutions and major multi-national corporations to share in the vision of a long-term and mutually beneficial partnership with Qatar.

Ultimately, the Qatar Financial Centre will serve as a catalyst to the creation of a vibrant hub for revenue generating activity in the Gulf – especially Qatar. Against a buoyant economic backdrop coupled with support from a forward-looking government, the Centre will attract the highest quality financial services institutions and corporate to share in the wealth of Qatar and the region and take advantage of the wealth of opportunity that Qatar can offer.

The Centre will be led by a commercial authority and a regulator – the QFC Authority and the Regulatory Authority respectively. Both will be independent of each other and from the government of Qatar. Both have independent budgets funded by the State and both will report independently to the Council of Ministers (please refer to Structure in the 'About the QFC' section). The QFC Authority is the commercial, administrative and legislative body responsible for driving the commercial strategy and for developing relationships with the global corporate community and other key institutions both within and outside of Qatar. The Regulatory Authority is a body corporate owned by the State that regulates financial services firms who operate in or from the Qatar Financial Centre. It has a broad range of regulatory powers to effectively and efficiently authorize, supervise and, where necessary, discipline regulated firms and individuals. For more information see the Regulatory Authority at www.qfc.com.qa, www.qfcra.com website.

Doha Securities Market was established in accordance with law No 14 of 1996 and started operating in May 1997. Its objectives are to find opportunities to invest savings in stock trading carry out studies and collect data and information on bonds exchanged in the market and confirms the professional code of conduct among the brokers and staff of the market in service of the national economy.

The market works to encourage the introduction and organization of investment funds, which are considered to be effective instruments for investors with poor experience.

Other objectives of the market include curtailing the flight of funds outside the country, attracting funds to the country and providing the opportunity to sell some of the public companies to the private sector.

The market is expected to play an important role in stimulating the national economy and creating the favorable conditions in which to establish, finance and upgrade joint stock companies.

The market follows a policy to close up bond trading before local investors in order to prevent stock prices manipulation attempts, which could, in such an early stage, harm the market.

It is presently being considered to permit non-Qatari investors to buy Qatari bonds through investment funds. The capital value of Doha Securities Marked rose towards the end of 1998 to reach QR 14.6 billion, increasing by QR. 6 billion from the previous year.

The continuation of the capital value upturn at the Qatari bourse reflects the good standing of the listed Qatari companies and the credibility of the Qatari economy.

A year after its establishment, the market has registered an unexpected growth in all transactions. The value of stocks in circulation went up by 49% to reach QR483 million compared to 1996, the number of stocks in, circu1ation went up by 30% to reach 1.9 million, and the listed companies increased towards the end.

For more information, please visit the www.english.dsm.com.qa

The Chamber has been performing very efficiently since its foundation in 1990 in encouraging national industries and introducing national products to the world markets.

It moreover has always been working to support the private sector and advocate its causes and procure modern technology by means of facilitating the participation of Qatari businessmen in joint ventures.

In collaboration with the Ministry of Foreign Affairs prior to the convention of the Middle East and North Africa 4th economic conference MENA, the chamber held two symposia to brief businessmen on the scope of the conference, and formed a committee named "The Private Sector's Committee", which in its turn organized three symposia dealing with three vital sectors.

The chamber published a commercial and industrial guide containing comprehensive data and information about the Qatari companies. The guide was distributed free of charge among the attendants of the conference.

It has also published a pamphlet on the atmosphere and available opportunities of investment in the country. One of the most important symposia organized by the Chamber was "Doha Symposium on International Commercial Arbitration" held in 1997.

The success of the efforts to attract foreign investment in developing countries depends on the extent of adoption by these countries of international arbitration as a means to resolve commercial disputes arising from international investment contracts.

Qatar has joined the international conventions dealing with international commercial arbitration. The Chamber has also inaugurated the symposium entitled "Methods of Stimulating Foreign Private Investments in the GCC Countries" in 1996.

For more information, please visit the www.qcci.org

Banking and Financial System

First: Qatar Central Bank

Qatar Central Bank was established in August 1993 to replace Qatar Monetary Fund. It works to uphold the stability of the finance market. Its capital has been increased to reach QR. 1 billion. The strength of the Qatari Riyal is attributed to the strength the Qatari economy and the huge revenues of hard currency earned from the exports of oil, gas and heavy industries products, in addition to the stability of the banking system. The Bank has been continuing its policy to liberalize interest rates since 1995. According to this policy banks are free to determine the interest rates without restrictions, which created the right condition for healthy competition among the banks operating in the country.
For more information, please visit the www.qcb.gov.qa

Second: National Commercial Banks

 During the past two years commercial banks have increased their assets, deposits and profits. Their efficiency is far beyond the ratio of 8% stipulated by Basel International Capital Adequacy Directives. By the end of October 1998 assets in the banking sector in Qatar amounted to about QR 41.519 billion, clients deposits registered QR 24.945 billion and credit facilities increased by QR 99 billion to reach about QR 29.895 billion. One indicator of the strength of the banking system in Qatar is the continuous opening of new branches by existing banks. This expansion helps the banks to improve their banking and investment services. The banking sector holds the first position in the Qatari bourse in terms of the value of their circulated shares and the number of concluded share-sales contracts. This also indicates the prosperity of banking activity. Banks, directly and indirectly, play a major role in supporting economic development projects by securing loan or financing services to companies involved in the implementation of vital projects. The number of commercial banks operating in Qatar is 14. They include 6 national banks of which 2 operate in accordance with Islamic principles

Third: Insurance Sector

The insurance sector is one of the saving and investment facilities available in the country's economic structure. Presently,  there are 8 insurance companies of which 4 are joint stock companies, while the rest are representative agencies of overseas companies. The latest indicators of the activity of insurance sector in Qatar reflect an outstanding growth represented in an increase in the number and diversity of the sector's services, development of its work techniques and expansion of its role in the country's economic and social development. Insurance Companies participated with the national banks in the establishment of private companies.

Commercial Fairs and Conferences

Doha continues to host many public functions such as lectures and symposia throughout the year to discuss the economic realities of today:
Their scope, the challenges they represent, and the negative or positive impact of global changes on them. The forums also deal with the economic futuristic prospects and the plans to revive the economy.

 Local businessmen are urged very strong to organize and host foreign specialized fairs, which are conceived to contribute in strengthening and vitalizing trade relationship between Qatar and the rest of the world.

Several fairs of different natures, general or specialized, in addition to international grand fairs are held in Qatar International Exhibition Center.
Qatar has proclaimed its intention to host an important conference on natural gas entitled "Gas Tech" in the year 2000. In November 1997 Doha witnessed the convention of the MENA 4th economic conference, which alongside with other similar functions is believed to have provided good opportunities for businessmen in the local private sector to establish strong relations and contacts with their visiting counterparts to the advantage of all associates in the field of investment and commerce.

Thanks to its good international reputation, Qatar has succeeded with excellence to host such a grand international forum as well as several other international functions, which strongly indicates the ability on the part of the Qatari people to succeed in exercising the best organizational functions and live up to their international commitments.

It is worth mentioning that during the past few years more than 22 companies of which 60% are foreign have invested in Qatar more than QR 20 billion, and that Qatar still continues to witness the convention of various commercial and investment fairs as part of the effort to attract more foreign investments and retrieve the country's emigrant funds.
For more information, please visit the www.qiec.com.qa