Qatar's Brief History

INVESTMENT CLIMATE AND INVESTMENT POLICIES

The State of Qatar has always been keen to assign the private sector an ever growing role as regards all economic activities, in order to insure the best utilization of the available financial and administrative resources.

The government has, therefore, been doing its utmost to help the private sector grow and develop, and to create the investment climate that would contribute to the achievement of such objectives. In this connection, legislation and laws have been issued, and necessary incentives provided to encourage this sector to make successful investments, either independently or in cooperation with foreign capitals, provided that the Qatari share in such joint ventures would not be less than 51%. Furthermore, the government is currently planning to establish a free zone, the activities of which will be integrated with those of the other free zones of the neighboring countries, particularly the free zone in "Jebel Ali" - Dubai, and maintain a sort of coordination between the projects which will be set up at Qatar's free zone, and those set up at the neighboring likes.

Joint Ventures

A number of laws and legislation have been issued by the State of Qatar, with the view to encouraging the non-Qatari investments. The most important of these has been Law No. (25) of the year 1990, which has regulated the engagement of non-Qatari capital in the economic activity. This law has permitted the non-Qataris to practice trade, industry, agriculture, and services, provided that they should be joint with Qatari partners wherein their joint share in the capital must not be less than 51%. As regards the contracting business, the law has stated that, in addition to the above mentioned provision, there must be an actual need, either for the establishment of such companies in view of supply and demand requirements, or for the expertise and technology provided by such companies. Yet in any case, the establishment of such companies requires approval of the Minister of Finance, Economy and Commerce after consulting the concerned agency. Commercial agencies and importation business have been made exclusive for Qataris by provisions of the law. However, the law has stated that non-Qataris may be allowed, by an Emiri decree, to invest their moneys in the fields of industry, agriculture, minerals/mining, motive power, or tourism, provided that such activities would be directed to the achievement of economic development purposes, or the facilitation of performance of public services and utilities. Likewise, the law has permitted non-Qataris to import the materials required for such projects which have no similar in the local market. In such case, the law has not permitted non-Qataris to apply for the decree referred to, unless they appoint a Services Agent of Qatari nationality (individual, or a company whose capital is entirely owned by Qataris), to facilitate contact with the state's official authorities, assist in the provision of accommodation and labor, make necessary arrangements to obtain entry visa and residence, and issuance of licenses required for performance of business and such other related services as he may be required to perform; but agents shall not assume any responsibility relating to the business of their principals.

The State of Qatar provides many incentives for the joint ventures as follows:

• The natural gas extracted from the north gas field as a minimum price of US cents 50 for every million British thermal units until the end of 1999.
• Electric power at $0.0178 for kilowatt/hour.
• Updated and improved infrastructure.
• Sites for the industrial projects at the industrial areas at annual nominal rental fees of QR. 1 for each square meter.
• Exemption of machinery, equipment, and spare parts from custom duties.
• Permanent exemption of the Qatari partner from the income tax, and temporary exemption (from 5-10 years) for the non-Qatari partner.

In addition to the above, the State of Qatar provides the following benefits.

• Exemption of foreign employees' salaries from the income tax.
• No constraints on foreign currencies, with the Qatari Riyal exchangeable against other currencies, and the US Dollar's rate of exchange at QR. 3.65. High standard medical and educational services.
• Easy access to international markets through updated air, marine, and land means of transportation, linking Qatar to all countries around the world.
• Communication services at the best international standards.
• Laws and regulations implemented in the State of Qatar permit the importation of skilled or unskilled labor force required for industrial projects.

Investment Opportunities

There is a number of medium and small size investment projects need for the Qatari market or international market for export, the economic feasibility of which has been firmly proven through the pre-feasibility studies carried out in the following fields:

• Oil field maintenance & technical services
• Benzene Sulphonates
• Gas field maintenance & technical services
• Rough Iron Valves
• Medical Bandages
• Plastic Products (molded and extruded)
• Surgical Masks
• Formica Sheets
• Surgical Gloves
• Water Filters
• Manual Fire Extinguishers
• Concrete Anti-Corrosive Materials (Z Method)
• Safety Helmets
• Concrete Ceiling Plaster Tiles
• Safety Gloves
• Light Iron Partitions
• Alkyd Resins
• Coated Aluminium Household Utensils
• Acrylic Resins
• Non-Woven Carpet
• Saturated Polyester Resins
• Writing and Notebook Paper
• Uric Formaldehyde Resins
• Envelopes and Parcel Wrappings
• Non-Hydrated Sodium Sulphate
• Biscuits
• Ferric/Magnesium/Aluminium Sulphates
• White Cheese
• Black Printing Ink
• Industrial Decontaminators
• Ferric Oxide Paints

Economy

Overview: Oil is the backbone of the economy and accounts for more than 30% of GDP, roughly 75% of export earnings, and 70% of government revenues. Proved oil reserves of 3.3 billion barrels should ensure continued output at current levels for about 25 years. Oil has given Qatar a per capita GDP comparable to the leading West European industrial countries. Production and export of natural gas are becoming increasingly important. Long-term goals feature the development of off-shore oil and the diversification of the economy.

Budget: Revenues:	$2.5 billion
Expenditures:	$3 billion, including capital expenditures of $440 million (1992 est.)
Exports:	$3.13 billion (f.o.b., 1993 est.)
Commodities:	petroleum products 75%, steel, fertilizer
Partners:	Japan 57%, South Korea 9%, Brazil 4%, UAE 4%, Singapore 3% (1992)
Imports:	$1.75 billion (f.o.b., 1993 est.)
Commodities:	machinery and equipment, consumer goods, food, chemicals
Partners:	Japan 16%, UK 11%, US 11%, Germany 7%, France 5% (1992)
External debt:	$1.5 billion (1993 est.)
Industrial production:	accounts for 50% of GDP, including oil
Electricity: Capacity:	1,520,000 kW
Production:	4.5 billion kWh
Consumption per capita:	8,415 kWh (1993)
Industries:	crude oil production and refining, fertilizers, petrochemicals, steel (rolls reinforcing bars for concrete construction), cement
Agriculture:	farming and grazing on small scale, less than 2% of GDP; agricultural area is small and government-owned; commercial fishing increasing in importance; most food imported
Economic aid: Donor:	pledged in ODA to less developed countries (1979-88), $2.7 billion
Currency:	1 Qatari riyal (QR) = 100 dirhams
Exchange rates:	Qatari riyals (QR) per US$1 - 3.6400 riyals (fixed rate)

AL-SHEIKH TRADING EST.
P.O. Box 13966
QATAR

Phone:	+974 - 670340
Fax:	+974 - 670341
Email:	tarien@qatar.net.qa
Contact:	Tariq Al-Sheikh, General Manager