2009 Investment Climate Statement - Qatar
Openness to Foreign Investment
The government is heavily involved in Qatar's economy although it strongly encourages international investment in certain sectors such as energy. Qatar's investment liberalization policies proceed on a gradual basis, based on a desire to protect local companies from rapid competition.
The main economic stimuli in Qatar are oil, gas, and related industries, in particular the development of the North Field, the largest non-associated natural gas field in the world. Qatar's liquefied natural gas (LNG) industry has attracted tens of billions of dollars in foreign investment. The energy industry will continue to be the most attractive sector for foreign investors, though significant opportunities exist for foreign investment in infrastructure development, medical, safety and security, education, and franchising.
The Organization of Foreign Capital Investment Law (Law No. 13/2000) is the primary legislation governing foreign investment. Foreign investment is limited to 49 percent of the capital for most business activities, with a Qatari partner(s) holding at least 51 percent. However, the law allows, upon special government approval, up to 100 percent ownership by foreign investors in certain sectors, including: agriculture, industry, health, education, tourism, development and exploitation of natural resources, energy, or mining.
When approving majority foreign ownership in a project, Law No. 13/2000 states that the project should fit into the country's development plans. It adds that preference should be given to projects that use raw materials available in the local market, manufacture products for export, produce a new product or use advanced technology, facilitate the transfer of technology and know-how in Qatar, and promote the development of national human resources.
International firms must apply for local registration through the Ministry of Business and Trade. About a dozen U.S. firms have received commercial registration allowing 100 percent foreign ownership in recent years.
Law No. 31/2004 further liberalized the investment regime and allows foreign investment in the banking and insurance sectors upon approval of the Cabinet of Ministers. It also allows foreigners to own residential property in a limited number of select projects. Law No. 23/2006 allows international law firms to operate in Qatar.
Foreign firms are required to use a local agent for matters related to sponsorship and residence of employees.
Although there is no income tax on salaries in Qatar, foreign investors are subject to taxation on their investment income. Qataris are not subject to any kind of corporate tax.
Import licenses are issued only to individuals with Qatari nationality, or companies owned or controlled by Qataris. In practice, exceptions are sometimes made for foreign companies, such as those with government contracts.
Judicial decisions in commercial disputes are primarily based on contractual agreements, provided these agreements are not in conflict with applicable Qatari laws. U.S. firms are strongly encouraged to consult a local attorney before concluding any commercial agreement with a local entity.
Foreigners are allowed to own up to 25 percent of the capital of companies listed on the Doha Securities Market. Foreign investors are not allowed to participate in any initial public offering (IPO) -- only Qatari and sometimes Gulf Cooperation Council citizens have that privilege.
Qatari regulations for local and foreign banks are the same, with new licenses available through application to the Qatar Central Bank. There are 18 licensed banks, including three Islamic banks and a specialized bank, the Qatar Industrial Development Bank. Qatar has 20 exchange houses, three investment companies and two commercial finance companies.
There is a separate Qatar Financial Center (QFC) that allows major international financial institutions and corporations to set up offices with 100 percent foreign ownership. There are currently 96 firms authorized to operate in the QFC, representing a spectrum of banks, investment companies, insurance houses, and related professional services. QFC firms are limited to providing services to wholesale clients, except for insurance companies, which can provide services to both wholesale and retail clients.
Certain sectors are not open for domestic or foreign competition, including public transportation, steel, cement, and fuel distribution. In these sectors, a single semi-public company has complete or predominant control, and enjoys a de facto monopoly by force of law.
Qatar has begun to liberalize its telecommunications sector to permit outside private investment, starting with the issuance in December 2007 of a second mobile license to a consortium including Vodafone and the Qatar Foundation. The same consortium was awarded the country's second fixed-line license in September 2008.
Conversion and Transfer Policies
Due to minimal demand for the Qatari riyal outside Qatar and the national economy's dependence on oil and gas revenues, which are priced in dollars, the government has pegged the riyal to the U.S. currency. The official peg is QR 1.00 per USD 0.27 or USD 1.00 per QR 3.64, as set by the government in June 1980 and reaffirmed by an Amiri decree issued July 9, 2001. Officially, the GCC states are harmonizing their monetary policies and intend to implement a common currency in 2010, though questions remain over whether they will be able to meet the current timeline. Despite a number of recent private sector analyses suggesting Qatar may reassess its dollar peg policy, the government has maintained the exchange rate and apparently plans to do so for the foreseeable future. Any future revaluation or monetary policy change would likely occur in concert with the other GCC states.
Qatar neither delays remittance of foreign investment returns nor restricts transfer of funds associated with an investment, such as return on dividends, return of capital, interest and principal payments on private foreign debt, lease payments, royalties and management fees. Similarly, there are no limitations on the inflow or outflow of funds for remittances of profits, debt services, capital, capital gains or other returns, and foreign exchange is readily available through banks and branches of exchange companies. However, local and foreign contractors may face delays of over three months in receiving the amount, without interest, due to them from the government because of bureaucratic delays.
Article 9 of Law 13/2000 allows foreign investors the right to deposit revenues from their investments into Qatari banks. Law 13/2000 also allows foreign investors to transfer investment revenues, amounts generated from sale or liquidation, amounts garnered from settlements and disputes, and compensation from expropriation to financial institutions outside Qatar without undue delay.
In accordance with government regulations to combat money laundering and terrorist financing, all financial transactions in excess of QR 100,000 (USD $27,472) must be reported to the Qatar Central Bank. Any repeated cash transactions of QR 30,000 (approximately USD $8,200) or higher made by an individual or entity must also be reported. Any transfer of funds into Qatar in excess of QR 100,000 must be accompanied by valid documentation regarding the use of these funds. Qatar does not have mandatory reporting requirements for cash couriers. Customs officials are given authority under the law, in suspicious cases, to require that travelers declare in writing all cash currency or other negotiable financial instruments in their possession.
Expropriation and Compensation
Law No. 13/2000, Article 8 states: 1) Foreign investment shall neither directly nor indirectly be subject to expropriation unless such measures are for the public welfare and implemented in a non-discriminatory way, against a prompt and reasonable compensation. 2) Compensation shall be equal to the market value of the investment at time of expropriation, and shall be paid without undue delay.
There have been no cases of expropriation or sequestration of foreign investment in Qatar since the nationalization in the mid-1970s of Shell and Dukhan Services (the latter was a combination of six international oil companies handling Qatar's onshore operations on the country's west coast). The foreign interests were compensated promptly.
Qatar is not a member of the International Center for the Settlement of Investment Disputes (ICSID). In March 2003, Qatar became a signatory to the New York Convention of 1958. If investment disputes occur, Qatar accepts binding international arbitration between the government and foreign investors. However, Qatari courts do not enforce judgments of other courts in disputes emanating from investment agreements made under the jurisdiction of other nations.
In July 2006, the government issued Law No. 27 which included a chapter of 240 articles devoted to bankruptcy. However, the implementing regulations have not yet been formulated, and it is unclear when the law will come into force. Qataris generally find it unacceptable to announce publicly the bankruptcy of a Qatari citizen or a Qatari-owned company and the Government of Qatar sometimes plays the role of guarantor to keep the bankrupt business running and safeguard creditors' rights.
In order to protect their interests, U.S. firms are advised to consult with a Qatari or foreign-based law firm when executing contracts with local parties.
Performance requirements for foreign investment in Qatar, including a counter-trade offset program, do not exist. While screening investment proposals, the government may indicate preferences for locating facilities, capital investments and other matters. Disclosure of financial and employment data is required, but proprietary information is not.
Qatar levies corporate income taxes on foreign firms at rates between five to 35 percent of net profits exceeding 100,000 Qatari riyals (USD $27,473). All Qatari owned firms are exempt from corporate income taxes. Under Law No. 13 of 2002, the Ministry of Finance may grant a tax holiday of up to 10 years for new foreign investments in key sectors. Companies established in the QFC have enjoyed a tax exemption since the start of operations in 2005, though up to a 10 per cent rate may be imposed in the future. Other foreign companies may be granted tax exemptions by Amiri Decree on a case-by-case basis.
The government offers a variety of incentives to foreign investors which may include tax exemptions, property grants, energy subsidies, and low-cost financing. The following is a list of incentives sometimes offered to foreign investors:
-- Natural gas priced at 60-75 U.S. cents per MBTU (Million British Thermal Units);
-- Electricity offered at less than two U.S. cents per KWH (Kilowatt Hour);
-- Industrial land offered at 27 U.S. cents per square meter per year for a period of 50 years, including options for renewing the lease;
-- Exemption from customs duties on imports of machinery, equipment and spare parts;
-- Exemption on export duties;
-- Exemption from corporate taxes for up to ten years;
-- Exemption from income taxes;
-- Absence of quotas on imports;
-- Low cost financing through Qatar Industrial Development Bank;
-- Flexible immigration and employment rules to enable the import of foreign labor.
The same incentives are offered to Qatari investors. Qataris are exempt from payment of corporate income tax.
Qatar does not maintain measures inconsistent with the Agreement on Trade-Related Investment Measures (TRIMs).
The Ministry of Energy and Industry determines the amount of foreign equity and the extent of incentives for industrial projects. Industrial projects can be established only in designated industrial zones. Necessary investment approvals may be required from the Ministry of Health, Qatar Tourism Authority, Ministry of Municipal Affairs & Agriculture, Ministry of Business and Trade, Supreme Education Council, and Ministry of Environment.
The Qatar Science and Technology Park (QSTP) located in Doha's Education City complex, offers U.S. and other foreign investors an opportunity to start up a research and development facility that could also engage in commercial activity. Participating companies are allowed 100 percent foreign ownership, and a 20-year exemption from payment of income tax.
Right to Private Ownership and Establishment
The Commercial Companies Law, Law No. 5/2002, controls the establishment of all private business concerns in Qatar. The law provides for corporate mergers, corporate bonds, and the conversion of corporate partnerships into joint stock companies.
Joint ventures involving foreign partners usually take the form of limited liability partnerships. Law No. 15/1990 does not allow foreign investors to enter into a joint stock company with Qatari partners. Foreign investors may own up to 49 percent, and the Qatari partners no less than 51 percent, of a limited liability partnership. Foreign partners in ventures organized as limited liability partnerships must pay the full amount of their contribution to capital in cash, or in kind, prior to the start of operations. Usually, such firms are required to set aside 10 percent of profits each year in a statutory reserve until it equals 50 percent of the venture's authorized capital. This requirement represents the only legal restriction to a foreign company desiring to remit all of its annual profit.
Foreigners are generally not allowed to own property. However, a law enacted in 2004 allows foreigners to own residential property in select projects including the Pearl (currently the largest real estate development project in Qatar), the West Bay Lagoon, and the Al-Khor resort project. Non-Qataris may also have the right of usufruct over real estate for a term of 99 years in Cabinet-designated "investment areas." Non-Qataris can be issued residency permits without a local sponsor if they own residential or business property in the designated districts.
Several state-owned companies in Qatar, such as Qatar Postal Corporation and Qatar Airways, dominate services activities and still operate under monopoly, or hold exclusive rights in some economic sectors.
Protection of Property Rights
Within Qatar, owners of trademarks, copyrights and patents depend on Qatari laws and regulations for protection. Intellectual property rights in Qatar are protected by Law No. 7/2002 (Copyright and Neighboring Rights Law) and Law No. 9/2002 (Trademarks and Geographical Indicators Law). Qatar has adopted the GCC Patent Law and has offices for patents, industrial property rights, and copyrights within the Ministry of Business and Trade. The Ministry of Health requires registration of all pharmaceutical products imported into the country and will not register unauthorized copies of products patented in other countries.
Patents may be registered for an initial period of 10 years, with one 5-year renewal possible. A trademark may be registered for 10 years and renewed indefinitely for further 10-year periods.
The 2002 copyright law does not explicitly provide for national treatment or coverage of unpublished works and does not criminalize end-user piracy. However, Qatar became party to the Berne Convention in 2000 which provides for these protections. In 2003, Qatar authorized government officials responsible for IPR enforcement to conduct raids and seize pirated material.
The Copyright Office works with law enforcement authorities to prosecute resellers of unlicensed video and software. In 2008, the Copyright Office conducted 97 raids on suspected IPR violators, reached 28 settlements with violators, and confiscated material worth approximately 3 million QR (USD $824,000). The Ministry works with Public Prosecution and the Ministry of Interior to investigate and prosecute copyright infringement and forwarded 31 cases to the prosecutor's office for further action.
Qatar uses the GCC patent law with derogations as needed to comply with its obligations under the TRIPS Agreement. It also established a joint committee between the Ministry of Business and Trade and Ministry of Health to coordinate their efforts and ensure that only patented products or authorized copies of pharmaceutical products are registered for sale. In 2006, an Amiri Decree on patents was issued requiring that: (1) only inventions of industrial use can be registered as a patent; (2) an industrial product or means or process of production must have something innovative about it to merit patent registration; (3) inventions in health, agriculture, plants and software development are not eligible for patent; (4) only Qatari citizens or foreigners of WTO signatory countries will be allowed to register a patent; (5) the Ministry of Business and Trade will frame and implement executive regulations to help enforce the law; and (6) the Ministry of Business and Trade will set up a patent registration office. This office has not yet been established.
As part of the GCC Customs Union, the six Member States are working toward unifying their intellectual property regimes. In this respect, the GCC has recently approved a common trademark law. All six Member States are expected to adopt this law as national legislation in order to implement it. However, the new law raises questions about consistency with GCC Member State obligations under the TRIPS Agreement and U.S. free trade agreements with Bahrain and Oman.
Qatar is a member of the World Trade Organization (WTO) and the World Intellectual Property Organization (WIPO), and is a signatory to the following WIPO Treaties:
-- WIPO Convention, since September 1976;
-- Paris Convention (Industrial Property), since July 2000;
-- Berne Convention (Literary and Artistic Works), since July 2000;
-- Nairobi Treaty (Olympic Symbol), since July 1983;
-- WCT (WIPO Copyright Treaty), since October 2005;
-- WPPT (WIPO Performances and Phonograms Treaty), since October 2005.
-- Qatar has also been a member and signatory to the TRIPS Agreement since January 1996.
Transparency of the Regulatory System
There are four regulatory bodies in Qatar, though plans are underway to create a unified regulatory authority for the country. It remains unclear when the necessary legislation and oversight board will be in place. Current regulatory entities include:
1) The Qatar Financial Market Authority regulates the Doha Securities Market.
2) The Central Bank regulates locally registered banks.
3) The QFC Regulatory Authority has a separate, independent regulatory authority for QFC-registered firms.
4) The Ministry of Business and Trade regulates the local insurance sector.
In Qatar, the government is the major buyer and end-user of a wide range of products and services. Government procurement regulations provide a ten-percent preference for Qatari bidders and five-percent for GCC bidders.
The Central Tenders Committee (CTC) of the Ministry of Finance is responsible for processing the majority of public sector tenders. The CTC applies standard tendering procedures and adheres to established performance norms. It also sets the standards for rules and regulations for bidding procedures.
Information on CTC tenders may be obtained from the CTC office in Doha or on the Internet at http://www.ctc.gov.qa. In tenders valued in excess of QR 100 million (USD $27 million), the CTC may invite and prequalify international firms to bid for a specific product or service. Technical bids submitted to the CTC are referred to the appropriate government end-user for short-listing. The CTC then opens the commercial bids and recommends the lowest priced, technically qualified bidder to the entity concerned, which will make the final award decision. Inquiries about specific award decisions should be directed to the CTC.
Some governmental entities have established internal tender committees. The Ministry of Energy and Industry, Qatar Petroleum, Urban Planning and Development Authority, and Public Works Authority process all tenders independently. Qatar Armed Forces and the Ministry of Interior are responsible for issuing tenders for classified materials and services.
Foreign firms wishing to participate in government procurement programs may be required to have a local agent and provide bid and performance bonds. International bidders should contact end-users directly for information on local agent requirements.
Other regulatory policies do not significantly affect foreign investment decisions.
Some U.S. companies have expressed concerns about the lack of transparency in government procurement.
Efficient Capital Markets and Portfolio Investment
In Qatar, there are no restrictions on the free flow of capital.
The Qatar Central Bank (QCB) adheres to conservative policies aimed at maintaining steady economic growth and a stable banking sector.
Loans are allocated on market terms, and foreign companies are essentially treated the same as local companies.
Qatar's banking sector assets were estimated at USD $79.86 billion at the end of 2007, up 56 percent from the previous year. 91 percent of these assets were held by Qatari banks. Qatar National Bank (QNB), 50 percent state-owned, is the largest bank in the country, with total assets equal to 39 percent of the total assets of all Qatari commercial banks. Foreign banks hold around 9 percent of all assets, or USD $7.2 billion.
Almost all import transactions are controlled by standard letters of credit processed by local banks and their correspondent banks in the exporting countries. Credit facilities are provided to local and foreign investors within the framework of standard international banking practices. Foreign investors are usually required to have a guarantee from their local sponsor/local equity partner. However, in accordance with QCB guidelines, banks operating in Qatar give priority to Qataris and to public development projects in their financing operations. Moreover, QCB prohibits banks from lending an amount greater than seven percent of a bank's capital base to any single customer. In addition, the Qatar Central Bank does not allow cross-sharing and stable shareholder arrangements among banks and other business concerns that result in fewer shares of some corporations actually trading freely in the market.
Although most of the shares on the DSM are owned by Qatari citizens, Qatar's current regulations allow foreigners to invest in all DSM listed companies. The total of foreign investments cannot exceed 25 percent of the capital of any listed company except Qatar Telecom and Salam International Investment, where foreign investment share may be higher. Foreign ownership of shares usually hovers around 8 percent, with most owned by other GCC citizens or local expatriates. The Mutual Fund Law (Law. No 25/2002) allows expatriates to invest indirectly in the stock market. No bonds have been traded on the DSM.
Qatar is politically stable. The crime rate is low. There are no political parties, labor unions or trade associations. There is no known organized domestic political opposition.
The U.S. Government believes the potential exists for acts of transnational terrorism to occur in Qatar. Potential investors and U.S. citizens are encouraged to stay in close contact with the Embassy for up-to-date threat information.
Bribery is a crime in Qatar and the law imposes penalties for public officials convicted of taking action in return for monetary or personal gain, or for other parties who take actions to influence or attempt to influence a public official through monetary or personal gain. The current Penal Code (Law No. 11/2004) governs corruption law and stipulates that individuals convicted of corruption may receive up to ten years' imprisonment and/or a fine of 5,000 Qatari riyals (about $1,374). Corruption investigations are handled by the Qatar State Security Bureau (QSS) and Public Prosecution. Final judgments are made by the criminal court.
Qatari officials say they would like to eliminate corruption in government procurement, and are working to establish a more open and transparent system.
By Amiri Decree No. 17/2007, Qatar ratified the UN Convention for Combating Corruption, and Amiri Decree No. 84/2007 established a National Committee for Integrity and Transparency. The permanent committee is headed by the Heir Apparent and is tasked with combating corruption in Qatar. Qatar is not a party to the Organization for Economic Cooperation and Development (OECD) Convention on Combating Bribery of Foreign Public Officials. Qatar is not a participant in regional anti-corruption initiatives. No regional or local watchdog organization operates in this country. In 2008, Qatar moved up to 28th from 32nd in 2007, out of 180 countries rated in Transparency International's Corruption Perceptions Index. Qatar also scored a respectable 6.5, the top spot for a Middle Eastern country. U.S. investors and Qatari nationals are subject to the provisions of the U.S. Foreign Corrupt Practices Act.
Bilateral Investment Agreements
Over the past ten years, Qatar has signed bilateral investment protection agreements with numerous countries, including Belarus (2001), Bosnia and Herzegovina (1998), China (1999), Croatia (2001), Cuba (2001), Finland (2001), France (1996), Germany (1996), India (1999), Iran (1999), South Korea (1999), Morocco (1999), Pakistan (1999), Romania (1996), Senegal (1998), Sudan (1998), Switzerland (2001), and Turkey (2001).
On November 5, 2005, Qatar and Singapore signed a free trade agreement. Both countries continue to work to finalize the text of the agreement. Qatar has signed many agreements with other countries on the avoidance of double taxation.
Qatar has not entered into a bilateral investment, trade, or taxation treaty with the U.S. However, Qatar and the U.S. did sign a Trade and Investment Framework Agreement (TIFA) in April 2004.
OPIC and Other Investment Insurance Programs
Due to concerns about labor practices in Qatar, OPIC suspended its operations in Qatar in 1995. However, Qatar is working to improve its labor standards in order to reinstate OPIC coverage.
Qatar has no plans to become a member of the Multilateral Investment Guarantee Agency (MIGA).
Qatar's labor force consists primarily of expatriate workers. Qatar's current population is estimated at 1.7 million, a doubling in the last four years. Qatari citizens are estimated to number only 225,000 - less than one-sixth of the total population. The largest group of foreign workers comes from the Indian sub-continent. The Ministry of Interior and the Ministry of Labor and Social Affairs regulate recruitment of expatriate labor, but Qatar's plan to develop its own manpower resources continues to receive attention at all government levels.
A 2004 labor law and subsequent regulations provide for the right of workers' association for citizens over 18 years of age in private enterprises with more than 100 Qatari citizen workers. Non-citizens are not eligible to form worker committees. Foreign workers can only be members of joint labor-management committees. Those working in the government sector are prohibited from joining unions. Further, the law and regulations permit only a single national trade union structure and forbid affiliation with groups outside the country.
These restrictions mean that in practice no labor unions currently exist. Under the labor law, workers are granted the right to bargain collectively and to sign joint agreements, i.e., agreements reached between employer and worker regarding a work-related issue. The right is circumscribed by the government's control over the rules and procedures of the bargaining and agreement processes. Collective bargaining is not freely practiced, and there are no workers employed under collective bargaining contracts. The law also grants workers the right to strike, but the restrictive conditions imposed by the statute make the likelihood of an approved strike extremely remote. Unapproved and spontaneous strikes are a frequent occurrence, though they are typically confined to the industrial areas, and resolved with intervention by the embassies or communities of the involved workers and/or shows of force by Qatari security forces. Leaders of such disturbances are routinely deported.
Employers set wages unilaterally without government involvement. Local courts handle disputes between workers and employers; however, foreign workers avoid drawing attention to problems with their employers for fear of repatriation. According to source country embassies and some migrant workers, the Labor Department was widely perceived to be objective within its narrow mandate when dealing with the nonpayment of wages. The Labor Department claimed that it resolves the vast majority of worker complaints amicably, with a very small percentage referred to the labor courts for judgment.
A new secretariat for labor relations was recently established and charged with overseeing collective bargaining and labor relations. The Labor Inspection Section has been restructured and staffed with sufficient numbers of trained inspectors who are provided with the power of law enforcement. Labor camps have been closed and forced to comply with minimum standards by the labor inspectors.
All expatriate labor must have a Qatari sponsor. Therefore, foreign investors are urged to negotiate labor visa issues with their sponsors/local agents/partners in the early stages of contract negotiation. The Ministry of Interior and the current sponsor must approve all transfers of sponsorship of an expatriate from one individual or firm to another. With the approval of the Ministry of Interior, sponsorship of employees who filed valid complaints of abuse by employers can be transferred without the current employer's agreement. By law, an expatriate hired locally is only entitled to two sponsorship transfers during their residence in Qatar, provided they are below 60 years of age. Expatriates hired abroad are not allowed to change sponsorship, though in practice there may be exceptions. If for any reason a residence permit is canceled, the expatriate is not allowed to return to Qatar on a work visa for a period of two years.
It is common practice in Qatar for expatriate workers to be provided accommodation, end of service benefits and homeward passage allowance, in addition to salaries. Qatar does not have a minimum wage regulation. However, the Labor Department has set some minimum wages for domestic helpers, drivers and construction workers in coordination with sending countries. While salaries and wages are negotiable, end of service benefits are subject to three different laws.
Qatar is a member of the International Labor Organization (ILO). Generally, labor experts believe that Qatar's labor law does not meet ILO minimum requirements.
Foreign Trade Zones/Free Ports
Companies operating at the Qatar Science and Technology Park (QSTP) can import goods and services duty free. Foreign entities wishing to invest in the QSTP apply for a license with the Park's managing board. No other licensing rules prevalent in the country will apply to the above businesses, although individuals will be subject to the criminal and civil laws of the state. Licensed foreign companies can enjoy 100 percent ownership and full capital and income repatriation benefits.
Businesses in the QSTP are exempt from all taxes, including income tax. The property of such a business is not to be seized under any circumstance, but capital and other cash can be seized on the orders of a local court. Equipment, machinery, or any other goods being imported for use by an entity doing business in QSTP are exempt from customs duty, and goods produced in the Park are not subject to export tax. Goods being sold within Qatar, but outside the QSTP, will be subject to the normal customs duty applicable to imported products. Flammable and radioactive materials, drugs, weapons, and explosives are banned from import by any of the licensed businesses.
Qatar has a 2005 law regulating the establishment of free trade zones. Qatar is planning to establish three free-trade zones, but no definite time frame has been announced for their establishment. One zone would be established near the New Doha International Airport (currently under construction with an estimated opening of mid-2011) and house light industries, financial services, and legal, trade and engineering consultancies. A second zone for the industrial area of Doha would cater to manufacturing and transport companies. The third zone, near Mesaieed Industrial City, would house petrochemical and other downstream-related businesses in the energy sector.
Priority in employment at the zones will be given to Qatari nationals. Resident expatriates will be allowed to join a licensed company if there is no objection from the Ministry of Interior. Conditions governing sponsorship change, including nationality quotas, will not apply to expatriates being recruited by a licensed company provided there is no objection from the Ministry of Interior.
Foreign Direct Investment Statistics
The Government of Qatar does not publish detailed statistics for foreign direct investment (FDI) in Qatar or the government's direct investments overseas. According to the Bureau of Economic Analysis, U.S. FDI in Qatar totaled USD $7.1 billion in 2007 on an historical-cost basis, or approximately 24 percent of all reported U.S. FDI in the Middle East and second only to Israel in the region. (Note: This data does not include the reporting of specific investments which were not reported to the U.S. Government and likely does not include the full amount of U.S. investment in Qatar). According to the United Nations Conference on Trade and Development (UNCTAD), Qatar's total stock of inward FDI in 2006 was USD $7.25 billion, with a total FDI inflow in 2007 of USD $1.1 billion. (Note: The total stock of FDI would, according to these figures, represent about 8.4 percent of Qatar's GDP. These statistics are clearly incomplete, as non-U.S. firms also hold major investments in Qatar.)
In recent years, Qatar has attracted sizeable investments in the areas of enhanced oil recovery and production, as well as the development of Qatar's gas industry. During the past ten years, QP and its partners have invested an estimated USD 100 billion in upstream and downstream operations. The development of Qatar's offshore natural gas reserves in the North Field will continue to dominate all other sectors in attracting foreign investors. Qatar's gas industry has attracted investors/creditors from the around the world.
The following is a list of foreign equity participation investors, U.S. firms included, in some major state-owned industrial/petroleum related industries:
Qatar Fertilizer Company (QAFCO) is jointly owned by Industries Qatar (IQ) (75 percent), Yara Nederland BV (15 percent) and Fertilizer Holdings AS (10 percent) - Year established: 1969. Commencement of commercial production: 1974. Total Shareholders Equity end 2004 is USD $791.5 million.
Qatar Petrochemical Company (QAPCO) is jointly owned by Industries Qatar (IQ) (80 percent), Total Petrochemicals (20 percent) - Equity share capital: QR 360 million (USD $99 million) - Year established: 1975. Commencement of commercial production: 1981- Total Shareholders Equity: USD $777.5 million.
Qatar Fuel Additives Company Ltd. (QAFAC) is jointly owned by Industries Qatar (IQ) (50 percent), Chinese Petroleum Corporation (CPC) (20 percent), Lee Chang Yung Chemical Industry Corporation (LCYCIC) (15 percent) and International Octane Limited (15 percent).- Total capital QR 2.5 billion (USD $687 million. Year established: 1992. End-users: Far East, India, Europe, and Arabian Gulf. Commencement of commercial production: 2001. Total Shareholders Equity: Unknown.
Qatar Vinyl Company (QVC) is jointly owned by Qatar Petroleum (25.5 percent), QAPCO (31.9 percent), Norsk Hydro (Norway) (29.7 percent) and Total Petrochemicals (formally Atofina) (France) (12.9 percent). Year established: 1996. End-users: Asian countries. Commencement of commercial production: Mid-2001. Total Shareholders Equity: Unknown.
Qatar Chemical Company (Q-Chem): Equity Share Capital: Unknown. Shareholders: Qatar Petroleum (QP) 51 percent; Chevron-Phillips Chemical Company (USA) 49 percent. Year established: 1997. End-users: Asia, Europe, Middle East, and Africa. Commencement of commercial production: 2003. Current value of foreign equity: Unknown.
Qatar Chemical Company II (Q-Chem II): Equity Share Capital: Unknown. Shareholders: Qatar Petroleum 51 percent and ChevronPhillips 49 percent. Year Established: 2002. End-users: Local and international. Commencement of commercial production: 2007. Current value of foreign equity: Unknown.
Qatofin: Equity Share Capital: Unknown. Shareholders: QAPCO 63 percent, Total Petrochemicals (formally Atofina) 36 percent and QP 1 percent. Year Established: 2002. End-users: Asia and Europe. Commencement of commercial production: 2007. Current value of foreign equity: Unknown.
Ras Laffan Ethylene Cracker: Equity Share Capital: Unknown. Shareholders: Q-Chem II 53.31 percent, Qatofin 45.69 percent and QP 1 percent. Year Established: 2002. End-users: Domestic. Commencement of commercial production: 2007. Current value of foreign equity: Unknown.
Liquefied Natural Gas Projects
Qatar Liquefied Gas Company (Qatargas): Equity share capital: QR 500 million (USD $137 million). Shareholders: Upstream: Qatar Petroleum (QP) 65 percent, Total (France) 10 percent, Marubeni Corporation (Japan) and Mitsui and Company Ltd. (Japan) 7.5 percent each and ExxonMobil Oil (USA) 10 percent. Shareholders: Downstream: Qatar Petroleum 65.0 percent, Totalfinaelf 20.0 percent, ExxonMobil 10.0 percent, Mitsui 2.5 percent, Marubeni 2.5 percent. Year established: 1984. End-users of LNG: Worldwide. Commencement of commercial production: December 1996. Current value of foreign equity: Unknown.
Qatar Liquefied Gas Company (Qatargas) II (Qatargas II): Equity share capital: Unknown. Shareholders: Qatar Petroleum 70 percent and ExxonMobil 30 percent. Year Established: 2002. End-users: U.K. Commencement of commercial production: 2007. Current value of foreign equity: Unknown.
Qatar Liquefied Gas Company (Qatargas) III (Qatargas III): Equity Share Capital: USD $5 billion; Shareholders: Qatar Petroleum (QP) 70 percent and ConocoPhillips 30 percent. Year Established: 2003. End-users: USA Commencement of commercial production: 2009. Current value of foreign equity: Unknown.
Ras Laffan Liquefied Natural Gas Co. (RasGas): Equity share capital: QR 7.28 billion (USD $2 billion). Shareholders: Qatar Petroleum (QP) 63 percent, Mobil QM Gas Inc. 25 percent, Itochu Corporation 4 percent, Nissho Iwai Corporation 3 percent and KOGAS 5 percent. Year established: 1993. End-users of LNG: South Korea 91 percent, Spain 6 percent and the U.S. 3 percent. Commencement of commercial production: 1999. Current value of foreign equity: Unknown.
Ras Laffan Liquefied Natural Gas Co. (RasGas) II (RasGas II): Equity Share Capital: USD 550 million. Shareholders: QP 70 percent and ExxonMobil 30 percent. Year Established: 2001. End-users: India, Italy, Spain, Taiwan. Commencement of commercial production: 2004 (Train 3). Current value of foreign equity: Unknown.
Ras Laffan Liquefied Natural Gas Co. (RasGas) III (RasGas III): Equity Share: Unknown. Capital: USD 12-14 million. Shareholders: QP 70 percent stake and ExxonMobil 30 percent. Year Established: 2003. End-users: USA Commencement of commercial production: 2010. Current value of foreign equity: Unknown.
Oryx GTL Project: Equity Share Capital: Unknown. Shareholders: Qatar Petroleum 51 percent and Sasol 49 percent. Year Established: 2003. End-users: Singapore, Japan and Europe. Commencement of commercial production: 2006. Current value of foreign equity: Unknown.
Pearl GTL Project: Equity Share Capital: Unknown. Shareholders: Qatar Petroleum and Royal Dutch Shell Group. Year Established: 2004. Commencement of commercial production: unknown. Current value of foreign equity: Unknown.
Other Gas Projects
Dolphin Gas Project: Equity Share Capital: Unknown. Shareholders: Mubadala Development Company (Abu Dhabi) 51 percent, Occidental Petroleum 24.5 percent, Total 24.5 percent, End-users: U.A.E. and Oman. Commencement of commercial production: 2007. Current value of foreign equity: Unknown.
Al-Khaleej Gas Project: Equity Share Capital: Unknown. Shareholders: Qatar Petroleum, ExxonMobil. End-users: Qatar, Kuwait, Bahrain. Commencement of commercial production: Unknown. Current value of foreign equity: Unknown.
Other Oil and Gas-Based Industries
Gulf International Drilling: Equity Share Capital: USD 258 million. Shareholders: Qatar Petroleum 60 percent and JDC 40 percent. Year Established: 2004. End-users: TBD Commencement of commercial operations: 2004. Current value of foreign equity: Unknown.
Power & Utilities
Ras Laffan Independent Water and Power Project: Equity Share Capital: USD572 million. Shareholders: AES Corporation 55 percent, Qatar Electricity and Water Company 25 percent, Qatar Petroleum 10 percent and Gulf Investment Corporation 10 percent. Year Established: 2001. End-users: Local. Commencement of commercial production: 2004. Current value of foreign equity: Unknown.
Q Power Company: Equity Share Capital: Unknown. Shareholders: Qatar Electricity & Water Co. - 55 percent, International Power Plc (UK) - 40 percent Chubu Electric Power Company (Japan) 5 percent.