Qatar, the New Investment Fad, a Global Leap for Chinese Enterprises from Inland Regions

HDMG Group, a professional cross - border consulting institution deeply rooted in the Middle East market, with its in - depth insights into regional policies and markets, has keenly captured the booming vitality in Qatar's investment field. Based on an accurate interpretation of the latest foreign investment regulatory regulations of the Qatari federal government, we have carefully sorted out the key legal systems and common investment paths for investing in the inland regions of Qatar for you, helping you plan ahead.

Distinct Advantages of Investing in Qatar

1. Robust Economic Growth

Since 2009, Qatar's gross domestic product has been showing a continuous and remarkable growth trend. It is expected to maintain this growth momentum during the period from 2023 to 2028, and is likely to approach $300 billion by the end of 2028. In 2022, driven by its strong and stable economic growth and attractive investment policies, the scale of foreign direct investment in Qatar soared to $29.78 billion, nearly 25 times that of 2021, with 135 new foreign - invested projects.

2. Policy Support and Extensive Cooperation

• Domestic Policy Support: In July 2019, Qatar established the "Investment Promotion Agency" with the aim of providing integrated investment solutions for foreign investors. In the same year, the "Law on the Investment of Non - Qatari Funds in Economic Activities" was revised, relaxing the restrictions on the shareholding ratio of foreign investors and offering preferential policies such as protection against expropriation for non - Qatari investments, free remittance of investment income, and preferential tariffs on imported equipment.

• Extensive Foreign Cooperation: Qatar has signed bilateral investment treaties with more than 60 countries or regions. As a party to 12 multilateral agreements containing investment provisions, it has also signed economic integration agreements with Gulf Arab countries and free trade agreements with many countries and organizations within the framework of the Gulf Cooperation Council, greatly reducing trade and investment barriers.

  
  

Restrictions Faced by Foreign Investors in Qatar

1. Restrictions on Foreign Investment Access

• Prohibited Investment in Some Sectors: Although the "New Foreign Investment Law" has broadened the scope of investment industries and allows foreign investors to hold 100% of the shares in most economic sectors, foreign investors are prohibited from investing in banks and insurance companies (unless otherwise approved by the Council of Ministers), commercial agencies, and other sectors designated by the Council of Ministers at any time.

• Uncertainty in Shareholding Ratio: On one hand, for foreign investors to hold more than 49% of the shares, they need to comply with the yet - to - be - issued implementing regulations and not violate relevant legislation. On the other hand, applications for holding more than 49% of the shares need to be reviewed by the Ministry of Commerce and Industry (MOCI), and there is a risk of non - approval. In addition, some industries in Qatar, such as telecommunications, are monopolized by state - owned enterprises, making it difficult for foreign investors to enter.

  
  

2. Investment Supervision in the Energy Sector

Qatar is rich in energy resources and is the world's largest exporter of liquefied natural gas. Foreign investors can participate in the development of natural resources, energy, and mining industries, but they need to comply with the national development plan and obtain the approval of the relevant government departments. For approved projects, foreign investors can hold more than 49% of the shares.

3. National Security Review System

Qatar does not have a separate foreign investment security review system. Investors can follow the procedures for new investments or mergers and acquisitions, and the investment procedures are relatively simple.

4. Restrictions on Land Use Rights

Qatar has a land system that combines public and private ownership. According to relevant laws, non - Qataris can own land ownership or use rights in specific areas. The Council of Ministers has designated 9 areas for property rights and 16 areas for a maximum 99 - year (renewable) use right. Applications for real - estate - related rights need to be submitted to the Real Estate Registration Department of the Ministry of Justice. If the acquired land is vacant, construction must be completed within 4 years, otherwise, the Real Estate Committee has the right to dispose of it.

5. Foreign Exchange Considerations

Qatar implements a free exchange system with no foreign exchange controls. In general, foreign investment and profit remittance are not restricted. However, when a joint - stock company remits its annual profits, it needs to deposit 10% of the annual profits into a savings account until the account balance reaches 50% of the investment funds. At the same time, Qatar passed the "Anti - Money Laundering and Combating the Financing of Terrorism Law" in 2019, strengthening anti - money - laundering supervision.

Main Legal Forms of Investment in Qatar

1. Representative Office

A representative office is used by foreign investors to promote their businesses, contact suppliers in Qatar, and report business conditions to their parent companies. It has no minimum registered capital requirement, does not have legal person status, cannot engage in business activities, and cannot obtain profits.

2. Branch Office

• Temporary Branch Office: It is established to execute contracts with the Qatari government or relevant agencies. It needs to be registered with the MOCI and obtain a business license. Its duration of existence is limited by the contract period and it needs to comply with the regulatory requirements of the competent authorities.

• Permanent Branch Office: It mainly provides professional business services, such as in the fields of law and consulting engineering. However, engaging in these services usually requires additional approvals from other government departments.

  
  

3. Limited Liability Company

It is composed of 1 - 50 shareholders, has independent legal person status, and shareholders bear limited liability according to their subscribed capital shares. Generally, it cannot raise capital publicly and has no minimum paid - in capital requirement. The company needs to appoint a manager who has the right to manage the company. When there are more than 20 shareholders, a board of supervisors needs to be established to supervise the company's operations.

4. Joint - Stock Company

• Private Joint - Stock Company: It can be established by 5 or more promoters. The shares are not open to the public for subscription, and the promoters subscribe to all the shares. The share capital is not less than 2 million Qatari riyals. Except for the regulations on public subscription, it follows the relevant regulations of public joint - stock companies.

• Public Joint - Stock Company: It requires at least 5 promoters. The capital is divided into equal tradable shares, and shareholders are liable within the limit of their subscribed capital contributions. The capital is not less than 10 million Qatari riyals. During the establishment stage, the shares subscribed by the promoters need to account for 20% - 60% of the share capital. It is necessary to submit a capital certificate and a draft prospectus to the MOCI. The company is managed by a board of directors with 5 - 11 members, whose term of office does not exceed 3 years and can be re - elected. The general meeting of shareholders needs to be held at least once a year, and an auditor needs to be appointed.

  
  

5. Limited Partnership

It requires two types of partners. The general partners manage the enterprise and bear joint and several liability, while the limited partners contribute capital and are liable within the scope of their capital contributions. It has no minimum registered capital requirement. All partners are natural persons. Foreigners' shareholding cannot exceed 49%, and there must be 2 or more Qatari citizens as partners.

6. Holding Company

It achieves control by holding at least 51% of the shares of affiliated companies and can be in the form of a joint - stock company or a limited liability company, subject to relevant regulations. The share capital is not less than 10 million Qatari riyals. Foreigners can establish holding companies, but they need to follow the registration and licensing procedures and may need to cooperate with local sponsors or investors.

Conclusion