Qatar: Investing

FDI in Figures

Global foreign direct investment (FDI) flows in 2021 were USD 1.58 trillion, up 64 per cent from the exceptionally low level in 2020. The recovery showed significant rebound momentum, with booming merger and acquisition (M&A) markets and rapid growth in international project finance because of loose financing conditions and major infrastructure stimulus packages. However, the global environment for international business and cross-border investment changed dramatically in 2022. The war in Ukraine – on top of the lingering effects of the pandemic – is causing a triple food, fuel and finance crisis in many countries around the world. Investor uncertainty has put significant downward pressure on global FDI in 2022, and new investment project numbers, including greenfield announcements, international project finance (IPF) deals, and cross-border mergers and acquisitions, all shifted in reverse after the first quarter of 2022 to start declining. Cross-border M&A sales were 6% lower and IPF values more than 30% lower in 2022. The outlook for global FDI in 2023 appears weak, with a significant number of economies around the world expected to enter a recession. Negative or slow growth in many economies, further deteriorating financing conditions, investor uncertainty in the face of multiple crises and, especially in developing countries, increasing risks associated with debt levels will put significant downward pressure on FDI (UNCTAD Global Investment Trends Monitor, January 2023). The negative trend reflects a shift in investor sentiment due to the food, fuel and finance crises around the world, the Ukraine war, rising inflation and interest rates, and fears of a coming recession.

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 2022 World Investment Report,FDI flows were negative by a total of USD - 1.09 billion in 2021, up from USD -2.43 billion in 2020. The total stock of FDI stood at USD 27.53 billion in 2021. 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.

Foreign Direct Investment (FDI) increased by 69.8 million USD in September 2022 (CEIC Data, 2023).

The country is ranked 24th on the AT Kearney Foreign Direct Investment Confidence Index 2022 on the most attractive economy for foreign investment. Qatar also ranks first among the world’s top destinations for foreign direct investment (FDI), owing to its strong economic and investment momentum into 2023, according to the newly released "FDI Standouts Watchlist 2023" by fDi Intelligence.

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 has made some significant improvements 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.

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.

Procedures Relative to Foreign Investment

Freedom of Establishment

The FDI framework is governed by Investment Law No. 13/2000. The freedom to establish a company/enterprise is very limited and controlled, as foreign investment is generally limited to 49% of the capital for most business activities, with the obligation to have one or more Qatari partners holding at least 51%. However, in certain sectors foreign investors can own up to 100% of the capital, upon obtaining a special government approval. This sectors include: agriculture, industry, health, education, tourism, development and exploitation of natural resources, energy, mining, business consultancy and technical services, information and communication services, cultural services, sports services, entertainment and distribution services.
Foreign firms are required to use a local agent for matters related to sponsorship and residence of employees.

Acquisition of Holdings

On August 5, 2014, Law No. 9/2014 was issued amending some provisions of Law No. 13/2000 regulating investment of non-Qatari capital in economic activity. The effect of this change is to raise the limit of permissible foreign ownership levels in the listed companies to 49%, which was previously limited to 25% in most listed companies. The amended law stipulates that non-Qatari investors are allowed to own up to 49% of the shares of a Qatari shareholding company listed on the Qatar Exchange (QE). The 49% ownership must be contained within the company’s memorandum of association or articles of incorporation after they gain the approval of the Ministry of Economy and Commerce.

Obligation to Declare

Government approval is required for foreign investment in banking or insurance sectors. An approval is required in order to hold 100% of a company’s capital (only available in certain sectors).

Competent Organisation For the Declaration

Qatar Central Bank
Qatar Financial Markets Authority
Qatar Financial Center Regulatory Authority (QFCRA)

Requests For Specific Authorisations

Certain sectors are not open for domestic or foreign competition, including public transportation, electricity and water, steel, cement, and fuel distribution and marketing. In these sectors, generally a public-participated company has complete or predominant control.

Investment Opportunities

Investment Aid Agency

Qatar Investment Authority

Tenders, Projects and Public Procurement

Tenders Info, Tenders worldwide
DgMarket, Tenders worldwide

Other Useful Resources

Invest in Qatar - GOIC
Investment in Qatar - Qatar Chamber of Commerce and Industry

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