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Has Doing Business in Qatar Become More Attractive?

Disclaimer: The views expressed are that of the individual author. All rights are reserved to the original authors of the materials consulted, which are identified in the footnotes below.


By Ubaidullah Kazi

Section Editor for Middle East


Anyone who loves watching football would know that the next FIFA World Cup is expected to be held in Qatar in 2022, making the nation the first in the Middle East to have ever held one in decades. Another fun fact (this time, for economic analysts) is that according to the World Bank Group’s Report[1] on the ‘Ease of Doing Business’, Qatar’s ranked 77 in 2020 - an improvement from its earlier rank of 83 (from the previous year). So, what could be the reasons behind this development?



Evidently, the Qatar Government made fundamental reforms in three areas of business: registering property, getting electricity, and obtaining credit. In the first domain particularly, it streamlined its property registration procedures and worked on its quality of land administration system by affixing official standards on property transfers and court statistics on land disputes for the previous calendar year,[2] through which the information simply became more comprehensible for entities involved in land-related deals. As for its electricity reforms, Kahramaa (Qatar’s water and electricity utility company) introduced a new process to accept and review applications from its online portal, resulting in the reduction of time taken to obtain an electricity connection.


More recently, the Government also sought to improve its labour system with its new non-discriminatory minimum wage policy that would help provide additional financial security, with the new rules ensuring that all employees would receive a minimum monthly wage of 1000 QAR (approximately 275 USD) - added to which is a minimum allowance of 300 QAR for food and 500 QAR for housing (unless the employer provides both). Additionally, in August last year, Qatar repealed a rule requiring employers’ consent to change jobs, and this resulted in “over 78,000 successful job transfers.”[3] To support this newly reformed framework further, Qatar reported to have built modern accommodations to improve the living conditions of workers while providing labour inspectors with a greater capacity to monitor living and working conditions to penalise those who do not comply with the regulations.


Such reforms have gathered the attention of investors from across the world, who would potentially have several other key points to consider, including a strong telecommunications sector, a low corporate income tax rate of 10%, and no forex restrictions on the remittance of funds overseas. Added to these are incentives of a generic quality such as access to well-equipped hospitals, access to international schools providing the British, American and French Curricula and the International Baccalaureate (IB), and the opportunity for expatriate students to seek admission to universities such as Carnegie Mellon and Weill Cornell.[4] With respect to incorporation, no minimum capital requirement applies to simple limited partnerships, general (joint) partnerships and unincorporated joint ventures. As for taxation matters, tax liability is payable on the same day as the tax return is filed and losses can be carried forward for three years after the year in which they were incurred, making it convenient for businesses and authorities to monitor their financial performance with more clarity.


In addition to developing its policies, the Qatar Government has also focussed on strengthening its infrastructure to attract multinational organisations and help them set up their operations in the region.[5] An example of its work is the new Science and Technology Park (QSTP) which consists of innovation centers that serve as incubators for small companies to grow, and tech centers for medium and large companies to utilise. QSTP is also a free-trade zone, meaning that some of the benefits include having 100% foreign ownership, trade without a local sponsor/agent, duty-free import of goods and services, and unrestricted repatriation of capital and profits. Major brands such as Cisco, Microsoft, ExxonMobil, Shell and GE have already become associated with QSTP to take full advantage of the provisions of the facility. Another venture for the Government is the development of Energy City Qatar (ECQ), which would host a Corporate Officer Center, a Banking Center with a Trading Floor and the region’s first Tier-4 IT/Data Center, and would provide incentives similar to those from the QSTP. The ECQ is currently investing in a broad range of services that would support its oil and gas operations, such as building a state-of-the-art Remote Control Center and a Global Oil and Gas Procurement Center to increase the efficiency with which the entities in the industry operate.


All the above developments seem to indicate a business-friendly attitude being adopted by the Qatar Government to attract foreign businesses and investors, so that it can ultimately develop its own economy and possibly support its allies by providing them with useful resources vital to develop any country around the world economically, financially and socially. It is only a matter of time until the real-world effects of these policies and infrastructural developments may be experienced by the stakeholders.



 

Image: World Bank Group, ‘Doing Business 2020: Qatar’s Ambitious Reforms Improves its Ranking’ (Doha, 24 October 2019) <https://www.worldbank.org/en/news/press-release/2019/10/24/doing-business-2020-qatars-ambitious-reforms-improve-its-ranking> accessed 14 June 2021.

[1] World Bank, ‘Doing Business Project’ (doingbusiness.org, 2019) <https://data.worldbank.org/indicator/IC.BUS.EASE.XQ?end=2019&locations=QA&start=2019&view=map> accessed 14 June 2021.

[2] World Bank Group, ‘Doing Business 2020: Qatar’s Ambitious Reforms Improves its Ranking’ (Doha, 24 October 2019) <https://www.worldbank.org/en/news/press-release/2019/10/24/doing-business-2020-qatars-ambitious-reforms-improve-its-ranking> accessed 14 June 2021.

[3] Al Jazeera, ‘Qatar says reforms to labour laws have ‘transformed’ the market’ (aljazeera.com, 20 March 2021) <https://www.aljazeera.com/economy/2021/3/20/qatar-reforms-to-labour-laws-have-transformed-the-market> accessed 15 June 2021.

[4] HSBC Commercial Banking and PwC, ‘Doing business in Qatar’ (HSBC, 20 January 2013) <https://www.pwc.de/de/internationale-maerkte/assets/doing-business-in-qatar.pdf> accessed 16 June 2021.

[5] ECOVIS QATAR, ‘Doing Business in Qatar’ (ECOVIS, 18 September 2020) <https://www.ecovis.com/qatar/wp-content/uploads/2020/09/doing-business-qatar.pdf> accessed 17 June 2021.



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