Qatar Chamber survey recommends increasing QDB’s capital to QR 50 billion

A recent study by Qatar Chamber recommended increasing the capital of Qatar Development Bank to QR 50 billion and reconsidering procedures of finance and allocation of lands, as well as reconsidering some aspects of the Investment of Non-Qatari Capital in the Economic Activity Law.

The study, titled “Qatar’s Current Investment Climate”, focused on the adequacy of incentives and facilities provided by the State to attract foreign investments, and how encouraging they are for local businessman and investor.

It also touched on direct and indirect incentives and facilities provided by the State to local and foreign investors and delved into how these incentives are provided and how easy and comprehensive they are. It also reviewed views of a number of Qatari businessmen and private sector stakeholders throughout the focus on two main elements: the finance and the allocation of equipped lands for investment projects.

It noted that the State launched a host of strategies over the past years for the purpose of providing more incentives and facilities to local and foreign investors and paving the way for the private sector to expand its activities and maximize its share in the GDP to expand sources of income away from oil and gas.

Further, it shed light on the Law No. (1) of 2019 On Regulating Non-Qatari Capital Investment in the Economic Activity which replaced Law No. (13) of 2000 which provided a host of investment incentives for non-Qatari investors including the allocation of land through rent or usufruct in accordance with the legislation in force in this regard and the exemption from income tax in accordance with the procedures and regulations stipulated in the Income Tax Law.

Elaborating on the features of the law, the study said that it exempted the non-Qatari investor from customs duties on imports of machinery and equipment necessary for their establishment and investment enterprises in the industrial sector are exempted from customs duties on their imports of raw materials and semi manufactured goods that are required for production but are unavailable in local markets.

According to the law, the non-Qatari investor are free to transfer his investments from and to Qatar without delay, including the proceeds from the sale or liquidation of all or some of his investments, the proceeds of the settlement of investment disputes, and any compensation due to a non-Qatari investor.

It allows non-Qatari investors to own a percentage not exceeding 49% of the share capital of listed companies, provided that the Ministry approves the proposed percentage. A non-Qatari investor may also hold a higher percentage after the approval of the Council of Ministers upon the proposal of the Minister. The law allows non-Qatari investors to own 100% of the capital in all sectors of the economy across the country.

A non-Qatari investor is prohibited from investing in the banking industry and insurance companies, except for companies excluded based on a decision of the Council of Ministers.

A non-Qatari investor is prohibited from investing in commercial agencies and may be prohibited from investing in any other sector as decided by the Council of Ministers.

The Chamber’s study indicated that there are other incentives provided for all investors, whether they are Qataris or non-Qataris, including the allocation of lands at nominal prices, the provision of electricity, water, and gas consumption at nominal prices, no taxes on exports, no quantitative quotas on imports and no income taxes

Incentives also included no taxes on Qatari companies or GCC companies that own businesses or share profits, the presence of efficient and high-quality logistics services and the provision of appropriate infrastructures, as well as the legal and legislative environment that stimulate investments, the provision of safe supply chains and easy access to global markets through air and sea transport networks.

Ease of obtaining residence permits for the investor and his family, flexibility in entry and residence laws for skilled and unskilled workers, and the provision of support and finance for SMEs are among the incentives.

Incentives also included the possibility for the foreign investors to own properties in three enterprises: The Pearl, West Bay Lake, and Al Khor Resort Enterprise, in addition to other 10 areas, in addition to the distinct location of Qatar, a center for air transport and a center for maritime transport, and the State’s high rankings in most global indicators, especially in the ease of doing business index.

The study referred to the incentives and facilities provided by the Qatar Free Zones Authority (QFZA) and the Qatar Financial Center (QFC) to attract foreign investments and companies.

It further highlighted the State’s political, economic, and social stability and the high degree of security it enjoys, in addition to its open economy to the world economies, noting that it enjoys a low inflation rate, which reached (-2.5%) during the year 2020, and a high level of purchasing power thanks to the high average per capita income.

The study recommended that the investment in simple services should be limited to Qatari investors and stressed the importance to benefit from the successful experiments of other countries, such as Turkey, in attracting investments by providing an integrated system of incentives, facilities, and exemptions.

Recommendations also included reconsidering the rental value of lands and calling on the allocation of lands should be according to the real need of the State rather than wasting lands in similar activities that don’t represent a real addition to the national economy.

It called for expanding the partnership between public and private sectors according to the PPP law and engaging the private sector in developing strategies that are related to the private sector.