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 $45 billion to U.S. investments, after it opened an office in New York City in 2015 to facilitate its U.S. investments. The November 2021 fourth annual U.S.-Qatar Strategic Dialogue further strengthened strategic and economic partnerships and addressed obstacles to investment and trade. The fifth round of strategic talks is expected to take place in Doha in 2022.
|TI Corruption Perceptions Index||2021||31 of 180||http://www.transparency.org/research/cpi/overview|
|Global Innovation Index||2021||68 of 132||https://www.globalinnovationindex.org/analysis-indicator|
|U.S. FDI in partner country ($M USD, historical stock positions)||2020||USD 15.5 billion||https://apps.bea.gov/international/factsheet/|
|World Bank GNI per capita||2020||USD 55,990||https://data.worldbank.org/indicator/NY.GNP.PCAP.CD|