Qatar flag Qatar: Investing in Qatar

Foreign direct investment (FDI) in Qatar

FDI in Figures

Global foreign direct investment (FDI) flows showed a strong rebound in 2021, up 77% to an estimated USD 1.65 trillion, from 929 billion in 2020, surpassing their pre-COVID19 level. FDI flows in developing countries increased by 30% but almost three quarters of the total increase in global FDI (USD 500 billion) was recorder in developed economies, with developing economies showing a more modest recovery growth. FDI inflows to West Asia and the middle East increased by more than 49% in 2021 to 90 billion USD (UNCTAD, January 2022).

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 (10%). 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 - 2.4 billion in 2020, up slightly from USD -2.8 billion in 2019. The total stock of FDI stood at USD 28.6 billion 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 Foreign Direct Investment (FDI) increased by 8.2 MILLION USD in The September 2021 quarter, compared with a drop of 57.1 million USD in the previous quarter (CEIC, 2022).

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% capital in all sectors, while many Qatar Stock Exchange listed companies have increased their foreign ownership limit to 49%. The organisation 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 privatisation programme. 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 programme launched recently is expected to improve the situation. Qatar ranked 77th out of 190 economies in the last World Bank's 2020 Doing Business report, up by six spots compared with a year earlier. The rise was mainly due to a significant improvement with regards to registering property. The close relations between Qatar and Turkey have resulted in strong Foreign Direct Investment (FDI) flows between the two countries.

 
Foreign Direct Investment 201920202021
FDI Inward Flow (million USD) -2,813-2,434-1,093
FDI Stock (million USD) 31,06128,62727,534
Number of Greenfield Investments* 283294
Value of Greenfield Investments (million USD) 1,5819701,251

Source: UNCTAD, Latest available data

Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.

 
Country Comparison For the Protection of Investors Qatar Middle East & North Africa United States Germany
Index of Transaction Transparency* 2.0 6.4 7.0 5.0
Index of Manager’s Responsibility** 2.0 4.8 9.0 5.0
Index of Shareholders’ Power*** 2.0 4.7 9.0 5.0

Source: Doing Business, Latest available data

Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action.

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What to consider if you invest in Qatar

Strong Points

Qatar is an attractive country for FDI, with significant opportunities for investment in infrastructure, healthcare, education, tourism, and financial services.
The reasons to invest in the country include the following:

  • 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 (the corporate tax rate is 10% and there is no personal income tax)
  • low cost of energy
  • good infrastructures
  • inexpensive labour 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% foreign ownership in all sectors, extensive economic zones with a tax exemption or full profit repatriation
Weak Points

Qatar’s investing landscape weak points are:

  • the economy's heavy dependence on hydrocarbons and foreign workforce
  • a requirement for 51-49% partnership split in favour of Qatari nationals
  • an expected budget deficit of USD 9,5 billion in 2021 (Qatari Ministry of Finance)
  • small domestic market
  • preferential treatment is given to suppliers using local products in government procurement
  • import licenses issued only to individuals with Qatari nationality or companies owned or controlled by Qataris
  • the country's untransparent system of rulemaking
  • weaknesses in data transparency
Government Measures to Motivate or Restrict FDI
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 (Law No. 2/2015) 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% 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 (Ras Boufantas and Umm Alhoul) and business facilitation options (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.
Bilateral investment conventions signed by Qatar
Qatar has signed over 49 bilateral international investment agreements.

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Latest Update: November 2022

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