1. Openness To, and Restrictions Upon, Foreign Investment
Policies Towards Foreign Direct Investment
In pursuit of its National Vision 2030, the government of Qatar has enacted reforms to incentivize foreign investment in the economy. As Qatar finalizes major infrastructure developments in preparation for hosting the 2022 FIFA World Cup, the government has allocated USD 3.2 billion for new, non-oil sector projects in its 2020 budget. The government also plans to increase LNG production by 64 percent by 2027. Significant investment in the upstream and downstream sectors is expected. In February 2019, national oil company Qatar Petroleum announced a localization initiative, Tawteen, which will provide incentives to local and foreign investors willing to establish domestic manufacturing facilities for oil and gas sector inputs. Moreover, in July 2019, the Investment Promotion Agency was established to further attract inward foreign direct investment to Qatar. These economic spending and promotion plans create significant 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, once executive regulations are issued, will permit full foreign ownership of businesses in most sectors with full repatriation of profits, protection from expropriation, and several other benefits. Excepted sectors include banking, insurance, and commercial agencies, where foreign capital investment remains limited at 49 percent, barring special dispensation from the Cabinet. The government is currently in the process of publishing regulations for the implementation of the new law. Until its issuance, the old law requiring 51% Qatari partnership still applies (Law 13/2000). 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, Manateq (Qatar’s Economic Zones Company), 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.
When competing for government contracts, preferential treatment is given to suppliers who use local content in their bids. To further boost local production amid an economic and political rift with neighboring Gulf countries, the government announced in October 2017 that it will favor bids that use Qatari products that meet necessary specifications and adhere to tender rules. Participation in tenders with a value of QAR 5 million or less (USD 1.37 million) is limited to local contractors, suppliers, and merchants registered by the Qatar Chamber of Commerce and Industry. Higher-value tenders sometimes do not require any local commercial registration to participate, but in practice certain exceptions exist.
Qatar maintains ongoing dialogue with the United States through both official and private sector tracks, including through the annual U.S.-Qatar Strategic Dialogue and official trade missions undertaken in cooperation with both nations’ chambers of commerce. Qatari officials have repeatedly emphasized their 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 has recently reformed its foreign investment legal framework. As noted above, full foreign ownership is now permitted in all sectors with the exception of banking, insurance and commercial agencies. Law 1/2019 on Regulating the Investment of Non-Qatari Capital in Economic Activity (replacing Law 13/2000) stipulates that foreigners can invest in Qatar 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.
Another recent foreign investment reform is Law 16/2018 on Regulating Non-Qatari Ownership and Use of Properties, which 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 will be granted residency in Qatar for as long as they own their property. The Committee on Non-Qatari Ownership and Use of Real Estate, formed in December 2018 under the Ministry of Justice, is the regulator of non-Qatari real estate ownership and use.
There are also other FDI incentives in the country provided by the Qatar Financial Centre, the Qatar Free Zones, and the Qatar Science and Technology Park. A draft Public-Private Partnership law to facilitate direct foreign investment in national infrastructure development (currently focused on schools, hospitals, and drainage networks) was approved by the Cabinet in April, 2019 and is pending the Amir’s final review.
U.S. investors and companies are not any more disadvantaged by ownership or control mechanisms, sector restrictions, or investment screening mechanisms relative to other foreign investors.
Other Investment Policy Reviews
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. In January 2020, MOCI announced it was studying the possibility of reducing the fees required to register companies, in addition to lowering tariffs and port fees to provide more incentives to the private sector. For more information on the application and required documentation, visit:
The World Bank’s 2020 Doing Business Report estimates that registering a small-size limited liability company in Qatar takes eight to nine days. For detailed information on business registration procedures, as evaluated by the World Bank, visit:
For more information on business registration in Qatar, visit:
- Ministry of Commerce and Industry’s Invest in Qatar Center:
- Qatar Financial Centre:
- Qatar Free Zones Authority:
- Qatar Science and Technology Park:
- Qatar Petroleum Tawteen Program:
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 USD 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).
6. Financial Sector
Capital Markets and Portfolio Investment
Foreign portfolio investment has been permitted since 2005. There is no restriction on the flow of capital in Qatar. The Qatar Central Bank (QCB) adheres to conservative policies aimed at maintaining steady economic growth and a stable banking sector. Loans are allocated on market terms, and foreign companies are essentially treated the same as local companies.
Currently, foreign ownership is limited to 49 percent of Qatari companies listed on the Qatar Stock Exchange. Foreign capital investment up to 100 percent is permitted in most sectors upon approval of an application submitted to the Invest in Qatar Center under the Ministry of Commerce and Industry. Foreign portfolio investment in national oil and gas companies or companies with the right of exploration of national resources cannot exceed 49 percent.
Almost all import transactions are controlled by standard letters of credit processed by local banks and their correspondent banks in the exporting countries. Credit facilities are provided to local and foreign investors within the framework of standard international banking practices. Foreign investors are usually required to have a guarantee from their local sponsor or equity partner. In accordance with QCB guidelines, banks operating in Qatar give priority to Qataris and to public development projects in their financing operations. Additionally, single customers may not be extended credit facilities by a bank exceeding 20 percent of the bank’s capital and reserves. QCB does not allow cross-sharing arrangements among banks. QCB requires banks to maintain a maximum credit ratio of 90 percent. QCB respects IMF Article VIII and does not restrict payments or transfers for international transactions.
Qatar has become an important banking and financial services center in the Gulf region. Qatar’s monetary freedom score is 72.6 out of 100 (“mostly-free”) and it ranks 28th out of 180 countries in the 2019 Index of Economic Freedom, according to the Heritage Foundation. Qatar is ranked third in the Middle East/North Africa region in terms of economic freedom and its overall score is above the world average.
Money and Banking System
There are 17 licensed banks in Qatar, seven of which are foreign institutions. Qatar also has 20 exchange houses, six investment and finance companies, 16 insurance companies, and 17 investment funds. Other foreign banks and financial institutions operate under the Qatar Financial Center’s platform, but they are not licensed by the Qatar Central Bank (QCB) and are regulated by the Qatar Financial Center Regulatory Authority. The country is home to the Qatar National Bank, the largest financial institution in the Middle East and Africa, with total assets exceeding USD 229.1 billion.
The QCB, as the financial regulator, continues to introduce incentives for local banks to ensure a strong financial sector that is resilient during economic volatility. The QCB manages liquidity by mandating a reserve ratio of 4.5 percent and utilizing treasury bonds, bills, and other macroprudential measures. Banks that do not abide by the required reserve ratio are penalized. QCB uses repurchase agreements, backed by government securities, to inject liquidity into the banks. According to QCB data, total domestic liquidity reached USD 158.8 billion in December of 2019. The IMF estimated that 1.7 percent of Qatar’s bank loans in 2019 were nonperforming. International ratings agencies have expressed confidence in the financial stability of the country’s banks, given liquidity levels and strong earnings.
Cryptocurrency trading is illegal in Qatar, per a 2018 Qatar Central Bank circular. In January 2020, the Qatar Financial Centre Regulatory Authority (QFCRA) announced that firms operating under the Qatar Finance Center are not permitted to provide or facilitate the provision or exchange of crypto assets and related services.
To open a bank account in Qatar, foreigners must present proof of residency.
Foreign Exchange and Remittances
Due to minimal demand for the Qatari riyal outside Qatar and the national economy’s dependence on oil and gas revenues, which are priced in dollars, the government has pegged the riyal to the U.S. dollar. The official peg is QAR 1.00 per USD 0.27 or USD 1.00 per QAR 3.64, as set by the government in June 1980 and reaffirmed by Amiri decree 31/2001.
In implementing the provisions of Law No. 20/2019 on Combating Money Laundering and Terrorism Financing and following the issuance of Cabinet Resolution No. 41/2019, starting February 27, 2020, travelers to or from Qatar are required to complete a declaration form upon entry or departure, if carrying cash, precious metals, financial instruments, or jewelry, valued at fifty thousand Qatari Riyals or more ($13,7000).
Qatar neither delays remittance of foreign investment returns nor restricts transfer of funds associated with an investment, such as return on dividends, return of capital, interest and principal payments on private foreign debt, lease payments, royalties, management fees, amounts generated from sale or liquidation, amounts garnered from settlements and disputes, and compensation from expropriation to financial institutions outside Qatar.
In accordance with Law 20/2019 on Combating Money Laundering and Terrorism Financing, the Qatar Central Bank requires financial institutions to apply due diligence prior to establishing business relationships, carrying out financial transactions, and performing wire transfers. Executive regulations for this law were published in December 2019 and they promulgate that originator information should be secured when a wire transfer exceeds QAR 3,500 (USD 962). Similarly, due diligence is required when a customer is completing occasional transactions in a single operation or several linked operations of an amount exceeding QAR 50,000 (USD 13,736).
Qatar is a member of the Middle East and North Africa Financial Action Task Force (MENAFATF), a Financial Action Task Force-style regional body. Qatar will undergo its next MENAFATF mutual evaluation in 2021. In July 2017, Qatar signed a counterterrorism MOU with the United States, which includes information sharing, training, enhanced cooperation, and other deliverables related to combating money laundering and terrorism financing.
Sovereign Wealth Funds
The Qatar Investment Authority (QIA), Qatar’s sovereign wealth fund, was established by Amiri Decree 22/2005. QIA is overseen by the Supreme Council for Economic Affairs and Investment, chaired by the Amir, and does not disclose its assets (independent analysts estimate QIA’s holdings at around USD 330 billion). QIA pursues direct investments and favors luxury brands, prime real estate, infrastructure development, and banks. Various QIA subsidiaries invest in other sectors, as well.
In September 2015, QIA opened an office in New York City to facilitate over USD 45 billion allocated for investments in the United States over the course of five years. QIA’s real estate subsidiary, Qatari Diar, has operated an office in Washington, D.C. since 2014.
QIA was one of the early supporters of the Santiago Principles and among the few members who drafted the initial and final versions of the principles, and continues to be a proactive supporter of its implementation. QIA was also a founding member of the IMF-hosted International Working Group of Sovereign Wealth Funds. QIA fully supported the establishment of the International Forum of Sovereign Wealth Funds (IFSWF) and helped create the Forum’s constitution.
12. U.S. International Development Finance Corporation (DFC) and Other Investment Insurance Programs
U.S. International Development Finance Corporation (DFC) has not maintained a presence in Qatar since 1995. Qatar is a member of the World Bank’s Multilateral Investment Guarantee Agency (MIGA).
13. Foreign Direct Investment and Foreign Portfolio Investment Statistics
|Direct Investment from/in Counterpart Economy Data|
|From Top Five Sources/To Top Five Destinations (US Dollars, Millions)|
|Inward Direct Investment||Outward Direct Investment|
|Total Inward||$33,874||100%||Total Outward||$40,330||100%|
|Other American Countries||$10,852||32%||European Union||$13,709||34%|
|European Union||$10,220||30%||Gulf Cooperation Council||$9,670||24%|
|United States of America||$7,995||24%||Other Arab Countries||$5,632||14%|
|Asia (excluding Gulf Cooperation Council)||$2,473||7%||Other Asian Countries||$3,214||8%|
|“0” reflects amounts rounded to +/- USD 500,000.|
Table 4: Sources of Portfolio Investment
Data not available.