Policies Towards Foreign Direct Investment

Over the past few years, the government of Qatar enacted reforms to incentivize foreign investment. As Qatar finalizes major infrastructure developments in preparation for hosting the 2022 FIFA World Cup, the government has allocated $15 billion for new, non-oil sector projects to be awarded between 2021 and 2023, including for developing new residential land, setting up drainage networks, and building new public hospitals. As of 2021, the government plans to increase LNG production by 64 percent by 2027 and Qatari government officials expect significant investment opportunities for international companies in the upstream and downstream sectors. In 2019, Qatar’s national oil and gas company, Qatar Petroleum, announced localization initiative “Tawteen,” which provides incentives to local and foreign investors willing to establish domestic manufacturing facilities for oil and gas sector inputs. The government established in 2019 the Investment Promotion Agency to further attract foreign direct investment to Qatar. These economic spending and promotion plans should create additional opportunities for foreign investors.

In 2019, the government enacted a new foreign investment law (Law 1/2019) to ease restrictions on foreign investment. The law’s executive regulations permit full foreign ownership of businesses in most sectors with the possibility of fully repatriating the foreign owner’s profits, protecting the owner from expropriation, in addition to several other benefits. Excepted sectors include banking, insurance, and commercial agencies, where foreign capital investment remains limited to a maximum of 49 percent ownership, barring special dispensation from the Cabinet. In 2020, the government also enacted long-awaited Public-Private Partnership Law 12/2020, to further develop the domestic private sector and improve the government’s ability to manage and finance projects. The government is currently in the process of publishing regulations for the implementation of this new law, which should include rules governing foreign participation. Qatar’s primary foreign investment promotion and evaluation body is the Invest in Qatar Center within the Ministry of Commerce and Industry. Qatar is also home to the Qatar Financial Centre, Qatar Science and Technology Park, and the Qatar Free Zones Authority, all of which offer full foreign ownership and repatriation of profits, tax incentives, and investment funds for small- and medium-sized enterprises.

The government extends preferential treatment to suppliers who use local content in their bids on government contracts. Participation in tenders with a value of QAR five million ($1.37 million) or less is limited to local contractors, suppliers, and merchants registered with the Qatar Chamber of Commerce and Industry. Higher-value tenders sometimes in theory do not require any local commercial registration; in practice, certain exceptions exist.

Qatar maintains ongoing dialogue with the United States through both official and private sector tracks, including the annual U.S.-Qatar Strategic Dialogue and official trade missions. Qatari officials have repeatedly emphasized a desire to increase both American investments in Qatar and Qatari investments in the United States.

Limits on Foreign Control and Right to Private Ownership and Establishment

The government recently reformed its foreign investment legal framework. As noted above, full foreign ownership is now permitted in all sectors except for banking, insurance, and commercial agencies. Law 1/2019 on Regulating the Investment of Non-Qatari Capital in Economic Activity (replacing Law 13/2000) grants foreign investors the ability to invest either through partnership with a Qatari investor owning 51 percent or more of the enterprise, or by applying to the Ministry of Commerce and Industry for up to 100 percent foreign ownership. The Invest in Qatar Center within the Ministry of Commerce and Industry is the entity responsible for vetting full foreign ownership applications. The law includes provisions on the protection of foreign investment from expropriation, the exemption of some foreign investment projects from income tax and customs duties, and the right to transfer profits and ownership without delay.

Law 16/2018 on Regulating Non-Qatari Ownership and Use of Properties allows foreign individuals, companies, and real estate developers freehold ownership of real estate in 10 designated zones and ‎usufructuary rights up to 99 years in 16 other zones. Foreigners may also own villas within residential complexes, as well as retail outlets in certain commercial complexes. Foreign real estate investors and owners are eligible for residency in Qatar for as long as they own their property. The Ministry of Justice created a Committee on Non-Qatari Ownership and Use of Real Estate in December 2018 to regulate non-Qatari real estate ownership and use.

Other FDI incentives exist, including ones extended by the Qatar Financial Centre, the Qatar Free Zones Authority, and the Qatar Science and Technology Park. A Public-Private Partnership legislation (Law 12/2020) was enacted in May 2020 to facilitate direct foreign investment in national infrastructure development (currently focused on hospitals, land development, and drainage networks). In part due to these reforms, Qatar’s World Bank’s Doing Business ranking improved in 2020 from 83rd to 77th position. Nonetheless, Qatar’s World Bank ranking in more than half of its annual categories continues to be lower than 100th, including in the categories of starting a business, getting credit, protecting minority investors, trading across borders, enforcing contracts, and resolving insolvency.

U.S. investors and companies are not disadvantaged by existing ownership or control mechanisms, sector restrictions, or investment screening mechanisms more than other foreign investors.

Other Investment Policy Reviews

Qatar underwent a World Trade Organization (WTO) policy review in April 2014. Qatar is due for another review in 2021. The reviews may be viewed on the WTO website: https://www.wto.org/english/tratop_e/tpr_e/tp396_e.htm 

Business Facilitation

Recent reforms have further streamlined the commercial registration process. Local and foreign investors may apply for a commercial license through the Ministry of Commerce and Industry’s (MOCI) physical “one-stop shop” or online through the Invest in Qatar Center’s portal. Per Law 1/2019, upon submission of a complete application, the Ministry will issue its decision within 15 days. Rejected applications can be resubmitted or appealed. For more information on the application and required documentation, visit: https://invest.gov.qa 

The World Bank’s 2020 Doing Business Report estimates that registering a small-size limited liability company in Qatar can take eight to nine days. For detailed information on business registration procedures, as evaluated by the World Bank, visit: http://www.doingbusiness.org/data/exploreeconomies/qatar/ 

For more information on business registration in Qatar, visit:

• Ministry of Commerce and Industry’s Invest in Qatar Center: https://invest.gov.qa
• Qatar Financial Centre: http://www.qfc.qa/
• Qatar Free Zones Authority: https://fza.gov.qa/
• Qatar Science and Technology Park: https://qstp.org.qa/
• Qatar Petroleum Tawteen Program: https://www.tawteen.com.qa/

Outward Investment

Qatar does not restrict domestic investors from investing abroad. According to the latest foreign investment survey from the Planning and Statistics Authority, Qatar’s outward foreign investment stock reached $109.9 billion in the second quarter of 2019. In 2018, sectors that accounted for most of Qatar’s outward FDI were finance and insurance (40 percent of total), transportation, storage, information and communication (33 percent), and mining and quarrying (18 percent). As of 2018, Qatari investment firms held investments in about 80 countries; the top destinations were the European Union (34 percent of total), the Gulf Cooperation Council (GCC, 24 percent), and other Arab countries (14 percent).

Qatar has 59 bilateral investment treaties (BITs), according to the United Nations Conference on Trade and Development (UNCTAD). Twenty-six BITs are in force, namely with Armenia, Azerbaijan, Belarus, Belgium-Luxembourg Economic Union, Bosnia and Herzegovina, China, Costa Rica, Cyprus, Egypt, Finland, France, Gambia, Germany, Indonesia, Iran, Italy, Jordan, Montenegro, Morocco, Portugal, Romania, Russia, Singapore, South Korea, Switzerland, and Turkey. The most recent BIT was signed with Rwanda in November 2018 but has not yet come into force. A full list of current BITs with the State of Qatar can be found at: https://investmentpolicy.unctad.org/international-investment-agreements/countries/171/qatar 

While Qatar has not entered into a bilateral investment or trade treaty with the United States, the two nations established a Trade and Investment Framework Agreement (TIFA) in 2004. Additionally, as part of the GCC, Qatar has signed 12 treaties with investment provisions (TIPs), including one between the GCC and the United States in 2012, but this treaty has not yet entered into force.

Qatar does not have a double taxation treaty with the United States. In 2015, Qatar became the first GCC country to sign a Foreign Account Tax Compliance Act (FATCA) intergovernmental agreement with the United States. In total, Qatar has over 80 agreements for the Avoidance of Double Taxation, including, most recently, with Somalia (2020), Morocco (2020), and China (2020).

Qatar has recently improved its taxation regime. In 2019, the government established the General Tax Authority as the central tax collection and compliance body of the government. In the same year, the government implemented the GCC 2016 Excise Tax Framework Agreement, imposing consumption-based excise taxes on select goods deemed harmful to human health, including tobacco (100 percent excise tax), sweetened carbonated drinks (50 percent), energy drinks (100 percent), and “special-category goods,” including alcoholic beverages (100 percent), and pork (100 percent). The decision was promulgated in Law 25 of 2018 and applies to both locally produced and imported goods in those categories. On April 1, the government of Qatar removed the excise tax from “special purpose goods.” As a GCC member state, Qatar has agreed to introduce a common value-added tax (VAT) of five percent. In 2017, Qatar approved a draft law on the proposed VAT, but has not committed to an implementation timeline.