In BMI’s opinion, the most promising options for investors in Qatar remain the LNG industry, which has traditionally been the most open to FDI, and the construction sector.
Qatar’s most liberal tax regime, lack of bureaucratic obstacles for businesses, and an excellent rule of law have enabled the country to earn a high score of 63.8 on 100 in the BMI Trade and Investment Market Risks Index, ranking the country second in the Mena region.
Opportunities for investment in Qatar have opened up in recent years due to the requirements of hosting the FIFA World Cup in 2022, which has resulted in a booming construction sector, and the continuing importance of the LNG (liquefied natural gas) export market, BMI Research said in a recent report.
The most significant assets for Qatar in terms of trade and investment market risks are its liberal tax regime and lack of red tape. It means that the country comes highest in the region for government intervention, with a score 76.6. This indicates that there are very few barriers to trade in terms of high taxes on foreign businesses or arduous bureaucratic procedures for setting up a company, BMI Research said.
BMI notes that there are almost no risks to investors in this regard, other than the long amount of time required to close a business.
Legislation concerning actual property and intellectual property rights in Qatar is well established and enforced, while the country is moving towards excellent e-governance readiness. Qatar therefore scores highly for legal risks, with 71.7 placing it second in the Mena (Middle East and North Africa), BMI said.
Qatar is limited in terms of its openness to foreign direct investment (FDI) due to its historic reliance on revenues from gas and oil exports, which have been invested back into the economy, negating the need for outside investment.
Consequently, Qatari investors are favoured by law, with entirely foreign-owned businesses are restricted to certain industries, and a 49% limit on foreign capital is imposed for most ventures.
BMI highlights these restrictions as “risks for businesses” because they limit the options and potential returns for investors in Qatar. The country, therefore receives its lowest trade and investment market risks score for ‘economic openness’, which at 43 ranks it ninth in the region.
In BMI’s opinion, the most promising options for investors in the country remain the LNG industry, which has traditionally been the most open to FDI, and the construction sector.
In addition, the 100% foreign ownership permitted for businesses in the agriculture, industry, health, education, tourism, and finance sectors, means that these industries may prove attractive options for investment, BMI Research said.
