File photo used for representation only
Doha: US-Qatar Business Council (USQBC) has released a new report on Qatar’s foreign direct investment (FDI) environment titled, “Foreign Direct Investment in Qatar: Recent Developments and Opportunities.” This report includes key indicators, important initiatives, and the important role that US companies have played in attracting additional investors to the country.
The report was sponsored by Qatar National Bank (QNB), a USQBC member, at the Gold Level. It also includes a comprehensive review of Qatar’s legal environment provided by Al Sulaiti Law Firm, a partner of USBQC.
The report finds that Qatar has been able to successfully overcome many recent economic challenges including the COVID-19 pandemic and the Gulf dispute by instituting favorable FDI policies, launching key initiatives, and enacting new investor-friendly legislation to attract additional investment in the country’s pursuit of creating a knowledge-based, diversified economy.
“Qatar is a magnet for foreign direct investment,” said Mohammed Barakat, Managing Director of USQBC. “The US continues to be Qatar’s largest foreign direct investor with a total of $110.6bn in FDI, and we expect this number to only increase going forward.”
FDI flows into Qatar have been on an upward trend thanks to the country’s political stability, high quality infrastructure, stable currency, and low corporate tax rates which will have a direct impact on the country’s GDP. Given the country’s current trajectory and the continuous pro-business reforms, Qatar’s GDP is projected to increase from $161bn in 2021 to $201bn in 2025.
“Qatar is one of the leading investment destinations in the world,” said Sheikha Mayes bint Hamad Al-Thani, Managing Director of USQBC Doha Office. “The localized investment related entities are well equipped with attractive incentives and infrastructure to support incoming foreign investors.”
The US and Qatar’s commercial relationship has continued to flourish with the total economic relationship between the two countries exceeding $200bn. The United States is Qatar’s single-largest foreign investor with 850+ US companies operating in Qatar and is also the country’s largest trading partner.
Many key initiatives of Qatar will lead to greater economic growth and will have ripple effects throughout the economy including the North Field Expansion project which is set to increase LNG production by 43 percent in its first phase, the FIFA World Cup Qatar 2022 which has more $200bn in associated infrastructure projects, and the Asia Games 2030.
While many sectors represent attractive investment opportunities, some of the high-priority areas include education & research, smart cities, financial technology, sports, agriculture, construction & engineering, and oil & gas.
Qatar aims to become a leading country in terms of its business and foreign investment environment by adhering to the country’s National Vision 2030 plan to establish an advanced, knowledge-based, and diversified economy. The FDI in Qatar totaled $199.7bn in 2019 which was 6.6 percent higher than 2018. Qatar instituted favorable policies to attract FDI such as allowing 100 percent ownership stake in private businesses for foreign investors. Consequently, the country gained a $72.38bn volume of investments in 2020 in the industrial sector.
Following the end of the blockade, Qatar benefited greatly from a large influx of FDI due to a decrease in the cost of doing business and an increase in regional business opportunities. According to the World Bank, Qatar’s economy is expected to grow 3 percent in 2021 upto 4.5 percent in 2023, and is in the best position among GCC countries.3 After the restoration of diplomatic ties, Qatar Financial Centre aimed to attract $25bn in FDI by 2022. The goal also included the creation of 10,000 new jobs and the establishment of 1,000 new companies in the country.
Qatar has launched and supported several key initiatives that would further increase the inflow of FDI. Qatar Petroleum announced the expansion of the North Field gas field in 2017 which is the largest single non-associated natural gas field. Its expansion will increase Qatar’s liquefied natural gas (LNG) production capacity by approximately 43 percent. For the 2022 FIFA World cup, Qatar has invested over $220bn into developing the infrastructure and construction projects required to host this event.
The World cup is expected to create $10bn in FDI for American companies alone. Given the country’s strategic location, the establishment of the Hamad Port will act as a catalyst for the country’s trading industry and will handle a capacity of 7.5 million TEUs upon completion.
