The State of Qatar is one of the world’s largest exporters of liquefied natural gas (LNG) and has one of the highest per capita incomes in the world. Despite a decrease in the gross domestic product (GDP) in 2020, which stemmed from depressed hydrocarbon sales and the COVID-19-induced economic slowdown, Qatar’s real GDP recovered by the second quarter of 2021 and is expected to grow by four percent in 2022, according to the International Monetary Fund’s (IMF) projections. This positive outlook is driven mainly by Qatar Energy’s ambitious plans to expand LNG production by more than 60 percent over the next five years. To maintain high-level government spending on projects in preparation for the 2022 FIFA World Cup, Qatar projects a modest $2.2 billion budget deficit in 2022, based on an oil price assumption of $55 per barrel.
The government remains the dominant actor in the economy, though it encourages private investment in many sectors and continues to take steps to encourage more foreign direct investment (FDI). The dominant driver of Qatar’s economy is the energy sector, which has attracted tens of billions of dollars in FDI. In line with the country’s National Vision 2030’sgoal of establishing a knowledge-based and diversified economy, the government of Qatar has recently introduced reforms to its foreign investment and foreign property ownership laws. These recent legislations allow up to 100 percent foreign ownership of businesses in most sectors and real estate in newly designated areas. In 2020, the government also enacted legislation to regulate and promote public-private partnerships.
There are significant opportunities for foreign investment in infrastructure, healthcare, education, tourism, energy, information and communications technology, and services. The government allocated $20 billion for major projects in these sectors in 2022. Measured by the amount of inward FDI stock, manufacturing, mining and quarrying, finance, and insurance are the primary sectors that attract foreign investors. The government provides various incentives to attract local and foreign investments, including exemptions from customs duties and certain land-use benefits. The corporate tax rate is 10 percent for most sectors, and there is no personal income tax. One notable exception is the corporate tax of 35 percent on foreign firms in the extractive industries, including but not limited to those in natural gas extraction.
Although the government of Qatar took recent measures to prosecute human rights violations, including improving its human trafficking legislation, addressing forced labor, and setting minimum wages, the country continues to face significant challenges that may affect foreign businesses. These include but are not limited to restrictions on free expression and peaceful assembly, restrictions on labor unions, discrimination against women in law and practice, and reports of forced labor.
To curb corruption and anti-competitive practices, the government created a regulatory regime consisting of various enabled government agencies, including the Transparency Authority, the National Competition Protection Authority, and the Anti-Monopoly Committee. To improve transparency, the government streamlined its procurement processes in 2016, creating an online portal for all government tenders. Nonetheless, personal connections reportedly play a significant role in business deals.
In recent years, Qatar has significantly bolstered its U.S. investments through its sovereign wealth fund, the Qatar Investment Authority (QIA), and its subsidiaries, notably Qatari Diar. In 2019, QIA pledged to allocate $45 billion to U.S. investments, after it opened an office in New York City in 2015 to facilitate its U.S. investments. The November 2021 fourth annual U.S.-Qatar Strategic Dialogue further strengthened strategic and economic partnerships and addressed obstacles to investment and trade. The fifth round of strategic talks is expected to take place in Doha in 2022.
1. Openness To, and Restrictions Upon, Foreign Investment
3. Legal Regime
4. Industrial Policies
5. Protection of Property Rights
6. Financial Sector
7. State-Owned Enterprises
The State Audit Bureau oversees state-owned enterprises (SOEs), several operating as monopolies or holding exclusive rights in most economic sectors. Despite the dominant role of SOEs in Qatar’s economy, the government has affirmed support for the local private sector. It encourages small and medium-sized enterprise development as part of its National Vision 2030. The Qatari private sector is favored in bids for local contracts and generally receives favorable terms for financing at local banks. The following are Qatar’s major SOEs:
Energy and Power:
Qatar Energy, its subsidiaries, and its partners operate all oil and gas activities in the country. The government wholly owns QE. Non-Qataris can invest in its stock exchange listed subsidiaries, but shareholder ownership is limited to two percent and total non-Qatari ownership to 49 percent.
Qatar General Electricity and Water Corporation (Kahramaa) is the sole utility provider in the country and is majority-owned by Qatari government entities. To privatize the sector, the Qatar Electricity and Water Company (QEWC) was established in 2001 as a separate and private provider that sells its desalinated water and electricity to Kahramaa. Other privatization efforts included the Ras Laffan Power Company, based in 2001, and 55 percent owned by a U.S. company.
Qatar Airways is the country’s national carrier and is wholly owned by the state.
Qatar General Postal Corporation is a state-owned postal company. Several other delivery companies compete in the courier market, including Aramex, DHL Express, and FedEx Express.
Information and Communication:
Ooredoo Group is a telecommunications company founded in 2013. Ooredoo (previously known as Q-Tel) dominates both the cell and landline telecommunications markets in Qatar and partners with telecommunications companies in 13 Middle East, North Africa, and Asia markets. It is the dominant player in the Qatari telecommunications market and is 70 percent owned by Qatari government entities. Ooredoo Group is listed on the Qatari Stock Exchange.
Vodafone Qatar is Qatar’s only other telecommunications operator, with the quasi-governmental entity Qatar Foundation owning 62 percent of its shares. Other Qatari government entities and Qatar-based investors own the remaining 38 percent. Vodafone Qatar is listed on the Qatari Stock Exchange.
Qatari SOEs may adhere to their own corporate governance codes and are not required to follow the OECD Guidelines on Corporate Governance. Some SOEs publish online corporate governance reports to encourage transparency, but there is no general framework for corporate governance across all Qatari SOEs. SOEs listed on the stock exchange must publish financial statements at least 15 days before annual general meetings in two local newspapers (in Arabic and English) and on their websites. When an SOE is involved in an investment dispute, the case is reviewed by the appropriate sector regulator (for example, the Communications Regulatory Authority for the information and communication sector).
8. Responsible Business Conduct
There is a general awareness in Qatar of responsible business conduct. Many companies publicize their Corporate social responsibility (CSR) initiatives, the majority of which cover environmental issues as well. Qatar participates in the Extractive Industries Transparency Initiative (EITI) as an economy dependent on extractive industries. Nonetheless, the Qatari government has not improved transparency regarding its petroleum industry management, as no regulatory body oversees resources extraction or revenue management. Moreover, Qatar has no freedom of information law.
The Government of Qatar maintains a reporting regime for suspicious transactions and requirements for consumer due diligence and record-keeping. The Ministry of Commerce and Industry has a dedicated Consumer Protection and Combating Commercial Fraud Department, which has intensified its efforts by monitoring records and inspection of stores and factories that sell or manufacture counterfeit goods. The ministry prosecutes business misconduct and announces these violations publicly.
Qatari law prohibits all forms of forced or compulsory labor and reserves two percent of jobs in government agencies and public institutions for persons with disabilities. The law also prohibits the employment of children under 16 years of age. The Ministry of Labor (MOL), the Ministry of Interior (MOI), and the National Human Rights Committee (NHRC) conduct training sessions for migrant laborers to inform them of their rights while in Qatar. In 2018, the United States and Qatar signed a government-to-government memorandum of understanding on exchanging expertise and fostering capacity building on combating human trafficking. In 2019, the U.S. Department of Labor and MOL signed a Memorandum of Understanding on labor, focusing on labor inspections and protecting domestic workers’ rights in Qatar.
Some Qatari non-governmental organizations (NGOs) focus on labor rights and often work with the government. Researchers from international NGOs such as Amnesty International and Human Rights Watch continue to visit and report on labor developments in the country with limited interference from authorities. International labor NGOs have been able to send researchers to Qatar under the sponsorship of academic institutions and quasi-governmental organizations such as the NHRC. Global media and human rights organizations continue to allege numerous abuses against foreign workers, including forced or compulsory labor, withheld wages, unsafe working conditions, and poor living accommodations.
Private security companies cannot operate in Qatar without an appropriate license granted by the MOI, per Law 19/2009 on Regulating the Provision of Private Security Services. As of 2009, Qatar has been a signatory to the Montreux Document on Private Military and Security Companies.
Corruption in Qatar does not generally affect the conduct of business, although the power of personal connections plays a significant role in business culture. Qatar ranked as the second least corrupt country in the Middle East and North Africa, according to Transparency International’s 2021 Corruption Perceptions Index, and ranked 31st out of 180 nations globally with a score of 63 out of 100, with 100 indicating full transparency.
Qatari law imposes criminal penalties to combat corruption by public officials, and the government actively implements these laws. Corruption and misuse of public money are a focus of the executive office. Law 22/2015 imposes hefty penalties for corrupt officials. Decree 6/2015 restructured the Administrative Control and Transparency Authority, granting it juridical responsibility, a budget, and direct affiliation with the Amir’s office. The authority’s objectives are to prevent corruption and ensure that ministries and public employees operate with transparency. Transparency is also mandated when investigating alleged crimes against public property or finances perpetrated by public officials.
Law 11/2016 grants the State Audit Bureau more financial authority and independence, allowing it to publish parts of its findings (provided that confidential information is removed), a power it did not previously have. Individuals convicted of embezzlement are subject to prison terms of no less than five and up to ten years. The penalty can be extended to a minimum term of seven and a maximum term of fifteen years if the perpetrator happens to be a public official in charge of collecting taxes or exercising fiduciary responsibilities over public funds. Qatar State Security Bureau and the Office of the Public Prosecutor handle investigations of alleged corruption charges. The Criminal Court makes final judgments.
Bribery is a crime in Qatar, and the law imposes penalties on public officials convicted of acting in return for monetary or personal gain and on other parties who take actions to influence or attempt to influence a public official through monetary or other means. The current Penal Code (Law 11/2004) governs corruption regulations and stipulates that individuals convicted of bribery may be sentenced up to ten years in prison and fines amounts equal to the amount of the bribe but no less than $1,374.
To promote a fairer, more transparent, and more expeditious public-sector tendering process, the government issued Procurement Law 24/2015, which abolished the Central Tendering Committee and established in its stead a Procurement Department within the Ministry of Finance that has oversight over most government tenders. The new department has an online portal that consolidates all government tenders and provides relevant information to interested bidders, facilitating the process for foreign investors ( ).
Qatar is not a party to the Organization for Economic Cooperation and Development’s (OECD) Convention on Combating Bribery of Foreign Public Officials. However, Qatar ratified the UN Convention for Combating Corruption (by Amiri Decree 17/2007) and established a National Committee for Integrity and Transparency (by Amiri Decree 84/2007). The permanent committee is headed by the Chairman of the State Audit Bureau. In 2013, Qatar opened the Anti-Corruption and Rule of Law Center in Doha in partnership with the United Nations. The center’s purpose is to support, promote, and disseminate legal principles to fight corruption (https://rolacc.qa/).
Despite these efforts, some American businesses cite a lack of transparency in government procurement and customs as recurring issues when operating in the Qatari market. U.S. investors and Qatari nationals who happen to be agents of U.S. firms are subject to the provisions of the U.S. Foreign Corrupt Practices Act.
10. Political and Security Environment
Qatar is a politically stable country with low rates of crime. There are no political parties, labor unions, or organized domestic political opposition. The U.S government rates Qatar as a medium risk country for terrorism, including threats from transnational actors.
The State Department encourages U.S. citizens in Qatar to stay in close contact with the U.S. Embassy in Doha for up-to-date threat information. The Department invites U.S. visitors to Qatar to enroll in its Smart Traveler Enrollment Program to receive further information on safety conditions in Qatar: .
11. Labor Policies and Practices
Qatar has one of the world’s highest migrant workers to indigenous population ratios, with foreigners making up nearly 90 percent of the country’s population. Qatar’s resident population is estimated at 2.78 million as of January 2022, doubling in the last decade. Qatari citizens are estimated to number approximately 300,000 – around 11 percent of the total population. Qatar’s labor force consists primarily of expatriate workers. The largest group of foreign workers comes from the Indian sub-continent.
Males make up around 72 percent of the population. As of the second quarter of 2021, about 60 percent of the female population aged 15 years and above were economically active, compared to 95 percent of males. However, local statistics may not fully account for all employed females as calculations as primarily based on residency statuses, which are family, not employment-based for most migrant females.
Qatar’s unemployment rates are among the lowest globally, with a 0.1 percent unemployment rate for men and a 0.5 percent unemployment rate for women, as of 2021. The government mandates that Qataris make up at least 60 percent of the employees of state-owned enterprises or companies where the government is a majority investor and 80 percent of those entities’ human resources workforce. Children of Qatari women are considered Qataris for purposes of calculating this localization ratio. Over three-quarters of employed Qatari citizens work for the government.
The Ministry of Labor (MOL) regulates the recruitment of expatriate labor. Labor Law 14/2004 largely governs employment in Qatar and allows the terminating party to terminate employment without providing reasons. The law requires employers to pay employees owed wages and other benefits in full, provided they have performed expected work duties during the notice period, which varies based on years of employment. The English common law governs companies registered with QFC, and labor issues are administered by QFC’s Regulation 10/2006.
There are no labor unions in Qatar. Non-citizens are not eligible to form worker committees or go on strike. However, according to an agreement between MOL and the International Labor Organization (ILO), joint worker committees including 50-50 representation of workers and employers exist in a small number of cases for all medium to large-sized companies. Law 12/2004 on Private Associations and Foundations and subsequent regulations grant Qatari citizens the right to form workers’ committees in private enterprises with more than 100 Qatari citizen workers. Qatari citizens employed in the private sector also have the right to participate in approved strikes. Still, the restrictive conditions imposed by the law make the likelihood of an approved strike remote. Regardless of nationality, individuals working in the public sector are prohibited from joining unions. Workers at labor camps occasionally go on strike over non-payment or delayed wages; however, this practice is technically illegal.
Local courts handle disputes between workers and employers, but the process is widely regarded as inefficient. To speed up the process of resolving labor disputes, the government established Labor Disputes Settlement Committees headed by a judge and representatives from MOL. As of 2018, there are three such committees, all of which operate outside of the traditional Supreme Judicial Committee structure and are required to address any complaints within three weeks.
Law 17/2020 sets the minimum basic wage for workers and domestic workers at $275 per month and $220 for lodging and meals if not provided by the employer. To combat the problem of late and unpaid wages, the government issued Law 1/2015, amending specific provisions of Labor Law 14/2004 on wage protection and mandating electronic payment to all employees subject to the local labor law. The government requires all employers to open bank accounts for their employees and pay wages electronically through a system subject to audits by an inspection division at the MOL; this requirement, however, does not apply to domestic workers. Employers who fail to pay their workers face penalties between $550 and $1,650 per case and possible prison sentences. Those penalties, however, are rarely implemented. The system currently applies to over 1.4 million workers.
The Labor Law prohibits the employers’ withholding of workers’ passports and stiffens penalties for transgressors. To eliminate forced labor, the government issued Law 19/2020, enabling employees to switch employers without requiring the employer’s permission. This new legislation complimented Law 13/2018, allowing workers covered by the Labor Law to leave the country without requiring exit permits.
To protect workers from fraudulent employment contracts, the Ministry of Interior (MOI) established the Qatar Visa Centers (QVCs) to simplify residency procedures for expatriate workers from India, Nepal, Sri Lanka, Pakistan, Bangladesh, and the Philippines. In partnership with MOI and MOL, contracted companies set up QVCs in these countries to facilitate biometric enrollment, medical records verification, and work contracts before contracted workers enter Qatar.
Qatar is a member of the ILO and maintains that its labor law meets ILO minimum requirements. In 2017, Qatar made commitments to address some ILO complaints by launching a comprehensive three-year ILO technical cooperation program. In 2018, the ILO opened a Doha office.
In 2018, the Qatari Minister of Foreign Affairs signed a labor-related MOU with the Department of State during the U.S.-Qatar Strategic Dialogue. The MOU laid out plans for cooperation in combating trafficking-in-persons, including strengthening the labor sector to reduce instances of forced labor. In 2019, MOL signed an MOU with the U.S. Department of Labor to enhance cooperation in labor inspection and protecting domestic workers’ rights.
14. Contact for More Information
U.S. Embassy, Doha
22nd February Street, Al Luqta District, P.O. Box 2399, Doha, Qatar