The State of Qatar is the world’s second largest exporter of liquefied natural gas (LNG) and has one of the highest per capita incomes in the world. A diplomatic and economic embargo of Qatar launched by Saudi Arabia, the UAE, Bahrain, and Egypt in June 2017 continues unabated. The International Monetary Fund estimates that Qatar’s real gross domestic product (GDP) will grow by 2.8 percent in 2020. Qatar projects a modest budget surplus in 2020, based on an oil price assumption of USD 55 per barrel. In contrast to other oil- and gas-dependent economies, Qatar’s LNG supply contracts and relatively low production costs have largely shielded the economy from the impact of the 2014 global oil price downturn. Qatar maintains high levels of government spending in pursuit of its National Vision 2030 development plan and in the lead-up to hosting the 2022 FIFA World Cup.
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 remains the oil and gas sector, which has attracted tens of billions of dollars in FDI. In adherence to the country’s National Vision 2030 plan to establish a knowledge-based and diversified economy, the government recently introduced reforms to its foreign investment and foreign property ownership laws to allow 100 percent foreign ownership of businesses in most sectors and real estate in newly designated areas.
There are significant opportunities for foreign investment in infrastructure, healthcare, education, tourism, energy, information and communications technology, and services. Qatar’s 2020 budgetary spending is focused on infrastructure, health, and education. By value of inward FDI stock, manufacturing, mining and quarrying, finance, and insurance are the primary sectors that attract foreign investors. Qatar provides various incentives to local and foreign investors, such as exemptions from customs duties and certain land-use benefits. The World Bank’s 2020 Doing Business Report ranked Qatar third globally for its favorable taxation regime, and first globally for ease of registering property. 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 LNG extraction.
The government has created a regulatory regime by empowering the Administrative Control and Transparency Authority and the National Competition Protection and Anti-Monopoly Committee to curb corruption and anti-competitive practices. In 2016, Qatar streamlined its procurement processes and created an online portal for all government tenders to improve transparency.
In recent years, Qatar has begun to invest heavily in the United States through its sovereign wealth fund, the Qatar Investment Authority (QIA) and its subsidiaries, notably Qatari Diar. QIA has pledged to invest USD 45 billion in the United States. QIA opened an office in New York City in September 2015 to facilitate these investments. The second annual U.S.-Qatar Strategic Dialogue in January 2019 in Doha further strengthened strategic and economic partnerships and addressed obstacles to investment and trade. The third round of strategic talks is expected to take place in Washington, D.C. in 2020.
|TI Corruption Perceptions Index||2019||30 of 180||http://www.transparency.org/
|World Bank’s Doing Business Report||2019||77 of 190||http://www.doingbusiness.org/en/rankings|
|Global Innovation Index||2019||65 of 129||https://www.globalinnovationindex.org/
|U.S. FDI in partner country ($M USD, historical stock positions)||2017||USD 8.2 billion||http://apps.bea.gov/international/factsheet/|
|World Bank GNI per capita||2018||USD 61,150||http://data.worldbank.org/