Qatar aims to become one of the leading countries in terms of business and FDI investment. The Foreign Direct Investment in Qatar has gradually increased over the last few years, thanks to its stable political condition, lower corporate tax rate and a stable currency pegged to the United State Dollar. Due to the adjustment of law in 2010, now foreigner can establish a 100% foreign owned company in some sector. These are the main reason why foreign direct steadily increase over the years in Qatar. The report below shows details.
Trend of Foreign Direct Investments (FDI)
In the third quarter of 2018, the Foreign Direct Investment (FDI) increased by QAR 1208 million. From 2011 unlit 2018 the FDI in Qatar averaged about 433 QAR million, reaching the all-time high of QAR 3777 million which was in the third quarter of 2012 and reach a record low of QAR 5189 in the first quarter of 2018. However, after the drop of FDI in first quarter of 2018, it again increases by USD 14 billion in June 2018
The New Foreign Direct Investments (FDI) Law
To make Qatar a perfect business hub for trade and re-exports, the government is going to place a new Foreign Direct Investment law this year. Though Qatar is opening all the economic sector through 100 percent Foreign Direct Investment. However, sectors like insurance and banking need Prime Minister approval. The Qatar government believes that the new FDI law will attract more foreign capital inflows, which will accelerate the economic development of the country. Although the new law allows 100 percent FDI, it does not exclude local stake, as in some cases these companies require financing.
Benefits of FDI
There are various forms of FDI investments. Some FDI investments are made to set up a new company; others buy shares of an existing company. Before you engage in these types of investment, you should determine the advantage of Foreign Direct Investments. Some of the benefits of FDI describe below –
- The FDI can accelerate the economic development of a country, creating a convenient environment for Foreign Direct Investors to incorporate the business in the country.
- Foreign Direct Investments helps to create new jobs, as investors set up new companies in the target country, more job opportunities arise.
- Foreign Direct Investments in Qatar are considered more beneficial because it has the lowest corporate tax rate compared to other countries.
Foreign Capital Investment Rules and Regulation
The law permits foreign investors to invest in all sector of nation economy of Qatar. The foreign investors must need to have a Qatari partner who shall hold minimum of 51% shares. However, the foreign investors can increase the shares from 49% to 100% in some sectors which includes health, agriculture, tourism and many others. The foreign investors are prohibited to invest in bank, insurance, commercial agency or trading in real estate.
Moreover, foreign investors can lease land from the government to setup their investment projects. The lease contract should be minimum of 50 years. The investors are permitted to import anything that they need for establishment of their project. The more information of FDI rules and regulation be found here.
There are many opportunities and advantage of Foreign Direct Investment in Qatar. Because of low corporate tax rate (10%) most of the foreign investors wants to move their business in Qatar. Because of the new adjustment of foreign investment law now foreign investor can increase their share from 49% to 100% in some sector.
However, if you face any difficulties in registering a foreign-owned or local company in Qatar, contact S & F Consulting Firm. S & F have experienced professional who will guide and help you to complete all the registration process to establish your business as a legal entity. Regarding FDI you need to check Qatar IT companies to set up business in IT sector.