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By Satish Kanady
DOHA: Asians outnumber Arab nationals in foreign investments in Qatar.
The share of Asian investments in the businesses in Qatar is 8.4 percent, whereas, Arab nationals, excluding those from the GCC, are 6.9 percent.
Total representation of GCC nationals in the market is 4.0 percent, while the European region and the US citizens represent 2.1 percent and 1.0 percent respectively, the Ministry of Business and Trade revealed on Monday.
Qatar’s Investment Law allows foreigners to invest in most sectors of the economy provided they have one or more Qatari partners. These sectors include: agriculture; education; manufacturing; health; tourism; development and exploitation of natural resource energy and mining.
The highest percentage ownership of the market is held by Qataris (77.4 percent). Further, a cross individual market sectors Qataris own at least 62 percent of issued shares.
Subject to the approval from the Minister of Business and Trade, foreign ownership can exceed the 49 percent threshold provided the company contributes to Qatar’s development plans, the ministry’s document that analyses the evolution of Qatari economy over the last three decades noted .
There are 11 types of business entities registered in Qatar, including foreign companies that are involved in business contracts in Qatar; and businesses owned by individual Qatari investors.
The most dominant company type identified in Qatar between 1980 and 2008 is an establishment owned solely by Qatari or GCC nationals.
The next dominant company type is the LLC/WLL which requires 51 percent of Qatari ownership. While the number of establishments increased linearly up to the financial crisis in 2009, LLC/WLL entities witnessed a sharp growth post-2004 as a result of an increase in commercial activity relating to the commencement of various LNG projects.
From 2000 to 2006, listed companies in Qatar increased by over 50 percent and it was during this period that Qataris who had participated in various IPOs benefitted immensely through liquidating their holdings.
The Ministry has also assessed the average investments in terms of share capital in each industry since 1980. The finance sector has the highest percentage share in terms of the size of share capital.
This is largely as a result of the vibrant financial sector as evidenced by a large number of conventional, Islamic and investment banks currently operating in Qatar.
Foreign companies represent the second largest sector as expected due to the nature of their operations and although the distribution sector is the largest in terms of share capital invested, it is the third largest in terms of share capital invested.
Despite extensive reports that Qatar was largely insulated from the 2008 financial crisis, the document reveals that by the end of 2008, Qatar saw a sharp decline in the number of general partnerships and establishments, both unlimited liability companies. Insolvency and voluntary dissolution would have been the main reasons for the sudden decrease, the report noted.