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Qatar

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ACKNOWLEDGEMENTS

We would like to express our deep thanks and gratitude to all the Qatar Embassy in Austria for their support and dedication, especially to His Excellency, H. E. Ali Khalfan Al Mansouri, Ambassador of the State of Qatar in the Republic of Austria,

and the Authorities Chairmen and all the contributors to this exceptional edition.

We would like to express our deep gratitude to our editor-in- chief, Mr. Abdelouadoud El Omrani and all the editorial team for their valuable assistance, patience and efforts provided to make this Qatar Austria Gateway 2017 possible.

The Economic book is edited, designed and published by AL Safeer Group, a branch of AL Ahmadi Group of Companies (P.O.Box37977, Doha), Qatari enterprise in cooperation with GEOC Group International.

We would also like to address special thank Mr. Souod Bin Mohamed Al Ahmadi, Al Safeer Group, Chairman, Ms. Ghada Barabeh, Mr. Eric Ohayon (Head of Project) for their contribution and participation in this unique project.

We would like also to thank Mr. Abdulrahman AL Tamari, our designer in chief for his patience and efforts.

We highly appreciate the support of the sponsors, without their involvement, this Book would not have been issued. We wish them involvement this Book would not have been success in their future projects and initiatives.

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His Highness Sheikh Hamad Bin Khalifa Al ThaniThe Father Emir

His Highness Sheikh Tamim Bin Hamad Bin Khalifa Al ThaniEmir of the State of Qatar

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In the Name of Allah, the Most Gracious and the Most Merciful

AL SAFEERThe Qatar Austria Gateway 2017 is published by the Qatar Embassy in the Republic of Austria in cooperation with the Al Safeer Company Qatar & GEOC Group International.AL Safeer Company, P.O.Box 37977, Doha State of Qatar , Tel. +974 55 01 30 22 email: [email protected] views expressed in these articles are not necessarily those of the publishers who accept no responsibility for the accuracy of information therein,including errors, omissions or statements made in the publication. The publishers reject any claims arising out of any action which a company or individual may take on the basis of the information contained herein. Main Publisher: Al Safeer Qatar - Adverstising services : GEOC Group International, ATS Global, 3 Charlton Lodge, Temple Fortune Lane, London NWII7 TY, UK - email: [email protected] & Conception by: Abdulrahman Tamari / Credit photos : QNA / Redaction: Abdelouadoud El Omrani -International Cultural Expert (Ar, Eng, Fr, It, Ger) Senior Adviser.

Contents Editorial H. E. Ali Khalfan AL-Mansouri Ambassador of the State of Qatar

in the Republic of Austria 5

Foreword H.E. Dr. Ibrahim Alibrahim Economic Adviser at the Amiri Diwan 7

Historical and Geographical Background 11 : Qatar Population and Language 23 Qatar Macroeconomic Outlook 25

Investing in Qatar 33 Investment Incentives 45

QatarOutlook at a Glance 47 Outlook for 20162018 51 -

Prospects for energy and commodity markets 63 Performance in 2015 69

Qatar eyes investment opportunities in Austria 85 Relations between Austria and Qatar 87

Qatar Investment Authority 88 Hospitality Market Insights 90

Sports Infrastructure 91

Conclusion Qatar National Vision 2030 95

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H. E. Ali Khalfan AL-MansouriAmbassador of the State of Qatar in the Republic of Austria

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Undoubtedly, the State of Qatar gives great importance to its relations with the Republic of Austria that has historic ties with the Arab world and has been involved and interested in its issues. This has led the State of Qatar to strengthen its bilateral relations all along the past years to develop them effectively and gradually.

I am pleased to remind that the most important developments that enriched positively the relations between Qatar and Austria started with the official visit to Vienna of His Highness Father of the Emir, Sheikh Hamad bin Khalifa Al Thani in December 2010. An Agreement of Double Taxation Avoidance was signed. A further step was accomplished with the opening of the Embassies of the two States in Doha and Vienna, witnessing the dynamics in the size and quality of these relations, and following the encouragement of both leaderships to enlarge the horizons of cooperation in the fields of economy, trade and investment, especially in the business sector. I firmly believe that these important relations between our two countries will continue to grow and develop and will finally bear fruits for our mutual interests in the near future.

It is known that the trade volume between the two countries reached in 2014 around 100 million Euros, a figure below our mutual expectations that indicates the need for additional efforts to enlarge our commercial exchanges and open new investment opportunities by strengthening bilateral relations through the chambers of commerce and industry and bilateral visits of businessmen and businesswomen.

It is noteworthy in this regard that Austrian companies wishing to invest in Qatar may benefit from the promising potential of Qatar. In fact, Qatar is classified among the most competitive economies in the world, it has one of the best business environments in addition to open network in the Middle East. The State is continuously striving to improve the business environment by launching initiatives that support international investors and provide an attractive environment and a safe haven. Qatar Financial Center has created a business environment marked by transparency and an independent legal frame offering best services in arbitration. QFC supports foreign companies, their headquarters and holdings by providing efficient financial and professional assistance. The Ministry of Economic and Trade has a crucial role in simplifying procedures, laws and legislations related to investment in Qatar. The flexibility of Qatari laws allows foreign capitals to participate in business investments until 49% in all economic sectors.

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Considering the Agreement of Double Taxation Avoidance between Austria and Qatar, Austrian business owners may hold 100% of the capital in the fields of industry, healthcare, education and tourism, and may therefore export 100% of their profits. Personal incomes are not subject to any taxes in Qatar, and there is no Value Added Tax.

The strategy of economic diversification implemented by the State of Qatar for years has largely participated in supporting vital economic sectors, especially in the private sector. In light of the rapid changes witnessed by Qatari economy, the participation of the private sector in GDP has grown continuously, since it is the main pillar to achieve Qatar National Vision 2030. Qatar has ongoing giant projects valued at around 200 billion dollars. Works are progressing actively, thus providing additional incentives to Austrian companies to invest and settle in Qatar.

Finally, I wish that this publication would play its role as an open space for all bilateral cooperation files, by encouraging exchanges in all fields and boosting investments in order to improve the relations between the two countries. I also wish that Qatari businessmen and CEOs of large corporations would participate side by side with their Austrian counterparts in discovering new paths and presenting creative ideas for a better performance in the cooperation between Qatar and Austria, bearing fruitful results for both parties. It is also our ambition that this publication would constitute a documented window, useful for business entities and corporations that are attracted by investments in Qatar and by the sum of encouragements provided by the State in this field.

H. E. Ali Khalfan AL-MansouriAmbassador of the State of Qatar in the Republic of Austria

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H. E. Dr. Ibrahim Al IbrahimEconomic Adviser at the Amiri Diwan

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Dr Ibrahim Al-Ibrahim, in less than two decades Qatar was able to access a respectable position in international investment markets; its investments are numerous and diversified in the automotive industry, real estate, sports clubs and others. It seems a rationale approach following a specific vision and a chosen strategy What would you say to European readers in this regard?As a matter of fact, the foreign investments you refer to are altogether a response to a general goal stated in Qatar Vision 2030 through which we seek to ensure a sustainable development and to provide a decent living to Qatari citizens generation after the other. It means that the current development should not be at the expense of next generations. Past trend was to raise the productive base, that is a focus on quantities and volumes, but currently the development strategy is oriented towards the diversification of the investment portfolio. It is a multifaceted diversification: geographic because we do not concentrate investments in a single region or country, and diversification of the nature of our projects to cover different activities and sectors. This is a way to contain risks while strengthening and stabilizing investments. We may add two other goals to the strategy: technology transfer, and support to existing Qatari projects, especially in the field of the production and expert of LNG.

In addition to its own foreign investments worldwide, the State of Qatar works to attract direct and indirect foreign investments. There is a package of laws and regulations in this regards. What would you say to German investors (individuals or corporations)?Investments in Qatar have gone through many different stages, the laws changed as well as how Qataris look to Foreign Direct and Indirect Investments. It is noteworthy that in all these steps, investments have been encouraged in a way or another according to national and international environments. Taxes were relatively high while they stand around 10% now. Investments sectors were limited while they are completely opened now. Foreign investors may possess 49% of companies shares in all economic sectors, and such share raises until 100% in projects with high economic benefits. In addition, the economic regime is an open system built on deregulation and allowing the free transfer of benefits. The fact that the national currency (Qatari Riyal, QAR) is linked to the US Dollar provides stability to investments and protects them from sharp change fluctuations. Additionally, some projects are fully tax-free during five years, renewable in some economic sectors. There are no taxes on salaries and wages that usually impact heavily the budgets in other regions of the world. Qatar is well-known for its secure and peaceful society and the availability of goods, services, commercial malls, and entertainment offers.

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In parallel, Qatar develops economic clusters in hubs that facilitate work and production environment. These clusters are specialized in marine industries, aeronautics, appliances, and logistics services. There are showrooms, warehouses, yards and workers residences available for cost-effective prices, and sometimes just symbolic costs. Companies may use logistic areas to stock, freeze, refrigerate, and dry their products; and workshops are available also for the maintenance and repair of cars, appliances, and production equipment

Qatar Vision 2030 is a reference document. It is noteworthy that this document does not include only strategic planning in the economic field, but concerns as well the social, environmental and cultural areas Would you introduce briefly the main goals of Qatar Vision 2030?International experts talk about the Green Economy. It is legitimate to ask: which development are we talking about if it is achieved at the expense of the environment and natural resources? In Qatar, we have also asked some strategic questions such as: which society do we want? How to achieve that? Qatar Vision 2030 is born from such answers. Let us note that this Vision did not come out of the Governments offices, it is rather the reflection of the nations ambitions in consistency with its leadership.

Qatar Vision 2030 is built around four pillars: Human Development including healthcare, education and a workforce able to build a nation with capacities to respond to the requisites of sustainable development; Social Development aiming to a secure and fair community that ensures care for those who need it, provides opportunities for all, strengthens the role of family and community development and enables women to fulfill their economic and social role, it is also a society that interacts positively with regional and international organizations and countries; Economic Development is about the creation of a diversified and promising system that may compete internationally thanks to advanced management, best use of resources, economic diversification and knowledge-based economy. Finally, Qatar Vision allowed great importance to the environment considering that economic growth should not occur on behalf of the environment that will be inherited by future generations.

Several Gulf countries relied for a period of time on oil income while we see today grassroots changes towards building modern economies relying on production and services to be able to survive in the after-oil era. What are the successes and the challenges in this area?We can register first that the State of Qatar has in fact succeeded to create an advanced environment for oil and gas, and did not focus its efforts only on extraction. Despite that, economic diversification is not agile enough, and this seems a general trend in all Gulf countries with varying degrees.

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Until recent times, energy sector was able to satisfy the needs of these countries, but several factors had an impact on such capacity among which lower prices of oil and gas in international markets, a trend that seems to remain for a medium term. Government spending has raised sharply in turn and incomes cannot cover spending anymore. Our countries faced the challenge and looked for viable solutions such as reducing costs and State subsidies to some products, and encouraging the private sector. Despite that, it appeared that these choices werent enough. In the past, welfare state based on the implicit agreement between the State and the citizens was successful. It implied that national resources were distributed and produced an economic improvement in living conditions and gave a legitimacy to the State thanks to a welfare system that provided healthcare, education, housing and employment. It is evident that such scheme cannot continue in the current environment because said welfare State has led to a misbalance between the produced effort and the gained reward. As a result, there was a waste of resources and an excess of spending, budgets were inflated due to the lack of national monitoring of State expenses, in addition to the insufficiency or weakness of the private sector.

In summing up, it was evident that there was an urgent necessity to change the economic and social system and to build incentives towards a healthy economic regime, including the change from a workforce-built economy towards a knowledge-based one.

H.E. Dr. Ibrahim AlibrahimEconomic Adviser at the Amiri Diwan

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Historical imprints through centuriesThe nature of the Qatari land and its geographical, historical, and social characteristics distinguish Qatar and make it one of the most important countries in the Arab World. Qatars long history, with evidence of early settlement in the Qatar peninsula that can be traced as far back as the 7th Millennium B.C., as shown by numerous artifacts such as inscriptions, rock carvings, flint spearheads and samples of fine pottery discovered at various sites in the country. Archeological excavations have revealed that the Ubaid civilization, which flourished in southern Iraq and the northern parts of the Arabian Gulf, also reached the Qatar peninsula. In the 5th century B.C., the Greek geographer Ptolemy mentioned qatara in his map of Arabia in reference to al-Zubara, believed to be an ancient trading port in the Gulf region. Qatara is one of the possible origins of the name Qatar. Some sources believe that the source of the name of Qatar is the Arabic name for tar, a material derived from petroleum products, and refers to countrys wealth in oil and natural gas. But other sources say the name comes from qatarat, the Arabic name for raindrops, as the country was famous for frequent rainfalls.

Some sources also believe the countrys name was taken from the name of the Qatari poet Qatari Bin Fujaya.

The Qatar peninsula witnessed various cultures throughout human history, even during the early and late Stone Ages.

Recently carried out archeological excavations at the edges of one of the islands in the western area of Qatar indicate the presence of human settlement in the area during prehistoric times.

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An archeological site that dates back to 6000 B.C. in the Shagra area in the countrys south eastern region reveals the major role played by the sea (the Gulf) in the life of people who lived there. Also excavation works carried out in the Al-Khor area, in the north eastern region, as well as in Beer Zikreet and Ras Abroog have led to the discovery of a colored pottery utensil, and stone tools such as flint scrapers and punchers. This indicates that Qatar had relations with the Ubaid civilization which flourished in Mesopotamia from 5000 4000 B.C. where some barter trade systems prevailed (consisting mainly of pottery and dried fish) between peoples living in Qatar and Mesopotamia.

The Qatar Peninsula emerged as one of the richest places in the Gulf region with respect to trade during the second millennium B.C., the period which witnessed the spread of Bronze age civilizations in Mesopotamia and extended to population centers in the Indus Valley in India. Trade between Mesopotamia and the Indus Valley passed through the Gulf and the western coast of Qatar which played a vital role in the transportation of commercial commodities by ship as revealed by the discovery of pieces of Greek pottery in the Ras Abroog area. This indicates that the Qatar Peninsula attracted seasonal settlers at that time. Then the Kasatio of the Zagros Mountains took over the rule of Babylon and their influence extended to the whole Gulf Region including a small island in the Al-Khor Gulf located north of Doha. Some pottery utensils found in the Al-Khor area illustrate the close relationship between Qatar and Babylon during the period known as the Kasatian era.

Archeological evidence has been found indicating that also Greek-Roman trade between Europe and India passed through the Arabian Gulf around 140 B.C. like the trade of the Mesopotamian civilization before. Artifacts found in Qatar, especially in the Ras Abroog area, give evidence of a Greek- Roman influence in the Qatar Peninsula. The archaeological excavations revealed include a house, a stone landmark and a low mound consisting of a large quantity of fish bones.

The Arabian Gulf region as a whole emerged as the most important trade center connecting East and West during the Sassanian Persian Empire in the third century C.E. Goods coming from the Orient such as different types of wood (sandal, teak and mahogany), copper and spices were objects of trade: there were shiploads of dyes, fabrics, pearls, dates, gold and silver. Qatar played a prominent role in this Sasanian era trade to which it contributed at least two goods: purple dyes and precious pearls.

The coastline of Qatar made it a nautical point of contact for the neighboring urban areas and the presence of ports conducive to the pearl industry made it a beacon for the Gulf Region.

Qatar played an important role in Islamic history as it formed the first naval fleet for the transport of armies during the Islamic conquests in southern Persia and the Sind region. The people of Qatar played a leading role in defending their adherence to Islam and maintaining loyalty to their belief. Islam spread across the whole of Arabia in the 7th century C.E. With the spread of Islam in the area,

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the Prophet Mohammed, peace and blessings of Allah be upon him, sent his first envoy, Abu al-Ala al-Hadhrami, to Al Munthir Ibn Sawi Altimimi, ruler of Bahrain (the coastal area extending from Kuwait in the north to Qatar in the south including Al Ihsa and Bahrain Island), in 628 C.E.calling him to Islam. The ruler responded and declared his embrace of Islam, followed by the entire population of Qatar which was mainly Arab and included some Persians living among them. Through this, the Islamic era started in Qatar.

In this early period of Islamic history, Qatar was famous for textiles and well-known garments and loincloths.

During the Umayyad and Abbasid rules in Damascus and Bagdad respectively, Qatar experienced further development in trade. Yaqut al-Hamawi, a renowned Arab geographer and historian, considered Qatar a center for camel and horse breeding. During the period of the Abbasid ascent in Bagdad, the pearl industry experienced considerable development in the Bahrain region, including Qatar. In this period there was an increase in the demand for pearls from the East all the way to China.

British Influence on QatarBritains relations with the Gulf region, including Qatar, started in 1635 with the establishment of the Basra commercial station, which was owned by the East India Company. Initially the purpose of these relations with the Gulf was the exploration of trade in Arabia but over time these purely commercial activities developed into a kind of official political relationship. Eventually, the British Empire tightened its control over the Gulf area under the pretext of protecting its naval lines in the Gulf and its roads to India.

On September 12, 1868 the first official relations between Qatar and Britain were established in the form of an agreement with Sheikh Mohammed bin Thani. This served as British recognition of a ruler representing Qatar. Sheikh Jassim bin Mohammed Al Thani, the founder of independent Qatar (1868 1913), assumed power after his father.

The Al Thani family has been ruling Qatar for over one and a half century. The name Al Thani is derived from that of the familys ancestor Thani bin Mohammed, father of Mohammed bin Thani.

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The Al Thani family was a tribal group that settled for a long time in the Jebrin oasis in southern Najd before coming to Qatar during the 18th century. Initially it stayed in the north of the peninsula before moving to Doha in the mid-19th century under the leadership of Mohammed bin Thani. The family is a branch of the Arab tribe Tamim whose descent can be traced back to Mudar bin Nizar, who inhabited the eastern parts of the Arabian Peninsula.

In 1878, Sheikh Mohammed bin Thani was succeeded by his son Sheikh Jassim Bin Mohammed Al Thani, after whom Sheikh Mohammed bin Jassim Al Thani took power. His short reign of 10 months was followed by his brother Sheikh Abdullah bin Jassim Al Thani. During his reign, the first oil discovery was made and he ruled until 1949.

In 1949, Sheikh Ali bin Abdullah Al Thani assumed power until 1960 when Sheikh Ahmad bin Ali Al Thani came to rule until 1972. Then Sheikh Khalifa bin Hamad bin Abdullah bin Jassim bin Mohammed Al Thani assumed power during the time that Qatar gained its independence on September 13, 1971.

The independence of Qatar was declared after the UKs decision to terminate the British Protection Treaty and recognize Qatar as a sovereign independent state under the rule of the Al Thani family. In the morning of Monday, February 22,1972, Radio Qatar broadcast a declaration that Sheikh Khalifa Bin Hamad Al Thani, the Heir apparent and Prime Minister at the time had taken power peacefully at 09:00 oclock that morning and was recognized by the ruling family, the Armed Forces and the people.

Qatari tribes recognized the leadership of the Al Thani family, which served their need for someone able to unite them, solve their differences, and lead them in the defense of their land, people, and wealth from attacks by raiders on the Qatar Peninsula. The Al Thani family met these requirements through their advantages of quick movement, internal unity, wise leadership, and wealth.

H.H. Sheikh Hamad Bin Khalifa Al Thani who assumed power on June 27, 1995 shaped Qatar into the modern country we know today. During his reign Qatar became the richest country in the world per capita. To invest this fortune wisely he founded the Qatar Investment Authority that has investments over $100 billion around the globe.

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Qatar became host to many political and sports events as the 2006 Asian Games, the 2012 UN Climate Change Conference or the Doha Agreement. In the future this path will be continued by his son H.H. Sheikh Tamim bin Hamad Al Thani who took over in 2013 as the youngest reigning monarch among the GCC countries and the youngest current sovereign worldwide.

Each year the country holds a celebration on the 18th of December, to celebrate National Day and to commemorate the late Sheikh Jassem Bin Mohamed Al Thani, the founder of the State of Qatar. This is the date on which Sheikh Jassem Bin Mohamed Al Thani assumed power in 1878.

Qatar the pearl of the Gulf countriesQatar one of the smaller countries in the Arab region and is situated on a peninsula in the Arabian Gulf. Its capital Doha is located on the east coast facing the United Arab Emirates. The official

religion of Qatar is Islam reflected in a rich history and through the many historic mosques spread throughout the cities and villages. The Qatar peninsula is a prominent beacon in the Arabian Gulf and it has a strategic location with a wonderful view of the sea and an extensive coastal line, which is shaped like a palm projecting into the middle of the sea. Qatars climatic and geographic characteristics are part of what makes it the most beautiful pearl among the Gulf countries.

The State of Qatar is bordered on the west by Salwa Bay and the Kingdom of Bahrain, by the Kingdom of Saudi Arabia to the south, and Abu Dhabi, UAE on the southeast. Its coasts are open to the Gulf from all directions except the southern part, where from the east coast (south of Khoor Al-Odaid) it joins the land of Arabia. It is known as Dohat Al-Dawahin.

Qatar has made enormous strides in various fields of development in recent years under the rule of Sheikh Hamad Bin Khalifa Al Thani and his son Sheikh Tamim bin

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Hamad Al Thani. The economic and social fields enjoyed unprecedented development.

Basic facilities such as schools, administrations, universities, hospitals and commercial centers are available in abundance, making the life of citizens and residents easy and enjoyable. Infrastructures such as roads, bridges, seaports and airports are among the most advanced facilities worldwide.

GeographyThe Arabian Gulf is an arm of the Arabian Sea extending from the Gulf at Oman to the south and north to Shatt Al Arab with a length of 965 km. up to the Strait of Hormuz.

The size of the Arabian Gulf is about 233,100 sq. km. Its maximum width is about 370 km with a minimum width of 55km at the Strait of Hormuz. The Gulfs depth only exceeds 90 meters in a few places. It is mostly shallow and has many islands, of which Quesm is the largest. The Gulf is bordered by Oman and the United Arab Emirates to the south, to the west by Qatar and Saudi Arabia, to the north by Kuwait and Iraq, and along the entire east coast by Iran. It was generally thought that the Gulf had previously extended farther north and that sediment dropped by the Tigris, Euphrates, Karun, and Karkheh rivers filled the northern part of the Gulf to create a great delta. But geological investigations now indicate that the coastline has not moved and that the marshlands of the delta represent a sinking of the earths crust as the Arabian land block pushes under Iran. The Gulf waters have very slow currents and a limited tidal range.

The Arabian Gulf has great economic importance since most of the worlds oil imports are transported through the oil ports at its coasts, and since most Gulf countries are oil exporting countries. In addition to this, there are many oil and gas fields in the depths of the Arabian Gulf.

The area of the western coasts of the Arabian Gulf generally consists of plains, with the exception of the base of the Qatar Peninsula and the far south of the Strait of Hormuz where the Ras Mussandam formation is located. Most of the shores of the Arabian Gulf are sandy with many small shore islands, some of them consisting of internal lakes.

The topography of the eastern shore of the Gulf is different, in that it consists mainly of a range of rocky hills with numerous slopes.

Wherever there are shores of plains, these are very narrow and merely form a narrow coastal strip, which widens a little where they meet mountain bases. The coastal plain widens northwards in the Bushehr area in Iran after which it joins the wide plains of the Tigris and Euphrates, and Karun river deltas. The water of the Arabian Gulf is not deep with a maximum depth of around 90 meters. Waves are not high and in spite of the high temperatures and humidity, storms and tornadoes are rare in the Arabian Gulf. For this reason its marine environment is suitable for navigation.

There are more than 130 islands in the Arabian Gulf, the biggest of them being the Iranian Qeshm Island populated by Iranian Arabs, followed by the Kuwaiti Bubiyan Island

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with a size of 863sq. km., and Bahrain Island with a size of 620 sq. km.

The Arabian Gulf is an important resource for the coastal cities at its two shores. It has long been a maritime trade route between the Middle East and South Asia. This Gulf has many good fishing grounds, extensive coral reefs, and abundant pearl oysters in addition to oil and gas fields shared by the surrounding countries with the exception of Iraq.

The climate of the Arabian Gulf has a high diversity throughout the seasons. While the temperatures are comfortable in Winter, the temperatures in summer can reach very high levels. The sparse rainfall occurs mainly in the form of sharp downpours between November and April, a higher rainfall occurring in the northeast.

Due to high temperatures and evaporation from the sea Humidity is often high. The small amount of cloud cover is more prevalent in winter than in summer.

In summer dust storms and haze can occur -the shamal, a wind that blows predominantly from a north northwest direction during the summer, is seldom strong and rarely reaches gale force. Squalls and waterspouts are common in autumn, due to winds at that time of year.

The Flag of the State of QatarThe flag of the State of Qatar is a maroon with a broad white serrated band with nine points on the hoist side. The nine points signify Qatars inclusion as the 9th member of the reconciled Emirates of the Arabian Gulf at the conclusion of the Qatari-British treaty of 1916.

National Anthem of the State of QatarThe national anthem of the State of Qatar was endorsed with the emergence of the new era of Sheikh Hamad Bin Khalifa Al Thani. The present national anthem was played for the first time on Saturday, 7 December 1996.

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The anthem starts with a swearing to the Almighty Allah that Qatar shall always be free, sublimed by the soul of the sincere. It urges Qatari people to proceed in the manner of the ascendants, the people of pride, dignity, religion, and science. The anthem also urges the people of Qatar to advance in the Prophets guidance and through what they bring from truth, goodness and beauty. It asserts that the present men of Qatar are extensions of those who defended the country courageously in the past.

The anthem was written by the poet Sheikh Mubarak Bin Saif Al Thani, and composed by Abddulaziz Nasser Al Obaidan. The National anthem reads as follows:

Swearing by Allah who erected the sky,

Swearing by Allah who spread the light,

Qatar will always be free

Sublimed by the soul of the sincere.

Proceed thou on the manners of the ascendants

And advance on the Prophets guidance.

In my heart,

Qatar is an epic of glory and dignity.

Qatar is the land of early men,

Who protect us at time of distress

Doves they can be at times of peace.

Warriors they are at times of sacrifice.

Main CitiesDoha:Doha is the capital city, the seat of government, and the location of the main commercial and financial institutions.

Situated halfway along the eastern coast of the peninsula, the city is an important cultural and commercial center with a vast trading seaport and a modern international airport connecting the country with the rest of the world.

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More than half of the population lives in Doha, which is full of public parks, grand hotels, and vast shopping malls. Architecturally, Doha is famous for its mosques and its modern buildings.

The city also has well-stocked libraries, the most important library of the country being the Qatari Public Library (Dar al-Kutub) and the National Library of Qatar. Doha is also the seat of Aljazeera TV Channel.

Dohas name comes from the fact that it was built on a bay. The Al Sudan tribe established the town of Al Bidda in 1686, and it was the most important town in old Qatar. Al Bidda is located on the eastern side of Qatar Peninsula, 63 miles from the southern edge of Ras Rakan, 45 miles north of Khor Adaid. It is located on the southern side of a deep bay at the southwest corner of a natural port with a length of 3 miles. It is protected on the northeastern and southeastern sides by natural rocks. The width of the entrance is less than one mile from the eastern side, but since it is shallow and in the middle of rock heads, it is somewhat difficult to navigate, and boats with a draft of more than 15ft. cannot pass through it. The depth of the bottom of the harbor is between 3 to 5 fathoms. The bottom is white mud or calcareous.

The most important suburbs of Doha City today are Al Dafna - which is considered to be among the most attractive areas through the presence of high buildings and towers - then Al Rayyan, Madinat Khalifa and the Pearl Project.

Al GhuwariyahThe town of Al Ghuwariyah is located on the northern center of the Qatar peninsula. Towns in the vicinity include Madinat ash-Shamal on the north side by and the town of Al Zubarah in the north-west, Al Jemailiya in the south, and Madinat Al Kaaban in the east. Most of the population of the town of Al Ghuwariyah belongs to members of the Al Noaim tribe living in Qatar, who migrated there in the early 1920s.

The town of Al Ghuwariyah features a sports and health center, a number of schools, and a private park for women, 60% of which is planted, while 40% is allocated to playgrounds, roads and buildings.

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Al JumailiaAl Jumailia is about 70km. from Doha, while Dukhan is the nearest town to it, at a distance of about 35km. Its population consists of various Qatari tribes including: Al Naeem, Bani Hajir, and Gahtan. Some people from Al Atoria also live among them. Some surveys indicate that 98% of the Al Jumailia population are Qataries and have guest houses (Majalis) where they gather and enjoy their social and family relations.

Al-KhorSituated about 57 km. from Doha, al-Khor is a coastal town well known for its fine beaches, old mosques and towers, and a harbor for small fishing boats. It has a local museum displaying archeological and historical antiquities.

The city of Al-Khor includes residential neighborhoods, new commercial centers, and a food center. The Shati Al Sultan Hotel there is also considered to be one of the most beautiful hotels. There is also Al-Khor Corniche and a new hospital, the Al-Khor Hospital, built between Al-Khor and Al Zakhiral. Ras Laffan Industrial City is located north of Al-Khor.

Ras LaffanThis 40 sq. km. estate, which lies 85 km north of Doha, is the second largest industrial city in Qatar. With the largest gas exportation seaport in the Arabian Gulf region and natural gas liquefaction plants, Ras Laffan is considered to be one of largest industrial cities in the world.

Al-WakraAl-Wakra is situated half way between Doha and Mesaieed and 15 km from Doha. It is a booming town with a number of archeological sites such as houses and mosques reflecting traditional architecture, a harbor for fishing boats, and a museum displaying archeological and environmental antiquities.

The urban plan for developing Al-Wakra City was issued in 2008 and includes a new concept for the development of the town in the coming 30 years. The most prominent feature of the plan is developing the shores, the town center, extending the town to the south and increased building so that in the future the town will be able to accommodate over six hundred thousand people. Building a sports city is also planned.

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Al RayyanAl Rayyan is one of the suburbs of Doha. With the continued urban development in Qatar, Al Rayyan was transformed from a residential area for Qatari families into an area that includes vital projects such as the Educational City and other facilities, since the area is close to Doha City.

Sheikh Hassan Bin Abdullah Bin Jassem Bin Mohamed Al Thani founded Al Rayyan city. It is near Al Wajba City, where a major battle took place between the people of Qatar and the Turkish army.

Madinat Al-ShamalSituated about 107 km. from Doha on the northernmost coast of the peninsula, this town is built to function as an administrative center for a number of coastal villages north of Qatar.

Um SalalUm Salal City is divided into two sections: Um Salal Ali and Um Salal Mohamed. The city is characterized by old historical features such as Um Salal Fort and Burj Barazan. A football team bears the name of the city.

MesaieedMesaieed, the main industrial city in Qatar, emerged following the discovery of oil in the country. It is situated on the southeastern coast about 45 km. south of Doha and has a major seaport for oil exportation and a commercial seaport. It houses iron and steel, gas liquefaction, petrochemical, fertilizer, and oil refining industries. Its splendid beaches and sand dunes are also among the most charming tourist attractions in Qatar.

DukhanSituated on the western coast of Qatar about 84 km. from the capital, this town was developed following the discovery of oil in the surrounding fields. It is known for its popular fine beaches.

Al ShahaniaLocated 60km. north of Doha, famous for camel races that are organized there on a special track, and established for this type of racing.

The IslandsThe most important of the Qatari islands are: Haloul, Sharao, Safilia, Asehat and others. The land of these islands consists mostly of plain rocky surfaces with some limestone hills in the Dukhan area in the west and Jebel Fuwairit in the north. The topography of these islands is characterized by such features as coves, inlets, depressions, and surface rainwater-draining basins known as al-riyad (gardens) found mainly in the northern and central parts of the peninsula, which are considered the most fertile land where vegetation grows in abundance.

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Arabic is the official language. English is widely used as expatriate laborers constitute a high percent of the countrys work force.

Islam is the official religion of the State of Qatar.

The currency of Qatar is the Qatari Riyal, which is divided into 100 Dirhams.1 US Dollar equals 3.65 Qatari Riyals (fixed rate).

The population of Qatar is estimated to be about 1.6 million according to the 2010 Census. 76% of the population lives in the capital city of Doha and its main suburb, Al Rayyan.

The census results revealed a great increase and development in population, and numbers of families, buildings, residential units and establishments compared to the figures of the 2004 census.

The rates are consistent with the economic boom which the country has enjoyed in recent years.

Qatar Population and Language

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25


Real GDP growth is expected to accelerate from 3.3% in 2016 to 3.9% in 2017 and 4.2% in 2018 with the ramp up in investment spending and initial gas production from the Barzan project

Inflation is expected to raise to 3.2% in 2016 and 3.4% in 2017 in line with the pick-up in global inflation and higher international food and energy prices before moderating slightly to 3.0% in 2018

The current account surplus is forecast to fall to 2.0% of GDP in 2016 before rising to 5.0% in 2017 and 5.2% in 2018 reflecting the projected movement in oil prices and export revenue

Lower hydrocarbon revenue and continued capital spending by the government should tip the fiscal balance into a deficit of 5.4% of GDP in 2016; but the fiscal balance should gradually return to near balance by 2018

Bank credit is expected to grow by 11.0% in 2016 and 9.0% in each of 2017 and 2018 on lending to projects and consumption

The Qatari economy grew by 3.7% in 2015 driven by large investment spending in the non-hydrocarbon sector, which grew by 7.8%, while hydrocarbon production fell slightly (-0.2%)

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Outlook

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BackgroundQatars oil and gas wealth per capita is the highest in the worldQatar is endowed with major oil and gas reserves, especially in relation to the size of its population. It has the third largest gas reserves in the world after Iran and Russia, estimated at 866tn cubic feet (cf). Qatar has also significant reserves of crude oil and condensates amounting to 1.5% of total proven world reserves. Proven gas, crude oil and condensate reserves totaled 188bn barrels of oil equivalent (BOE) in 2014. This corresponds to 84.6k BOE per capita, comfortably the highest in the world. At current extraction rates, Qatars proven gas reserves would last for another 137 years and oil reserves for 35 years.

The development of Qatars natural gas reserves drove rising per capita income up Qatar invested heavily in liquefied natural gas (LNG) from the early 1990s. The sector experienced a rapid growth phase, particularly in the second half of the 2000s. Qatar has pioneered LNG production technology and, as a result, it became the worlds top LNG exporter (31% of market share in 2015). The country is the worlds third largest gas exporter after Russia and the USA once pipeline exports are included. The development of the hydrocarbon sector has made Qatar the richest country in the world with GDP per capita at USD118k in purchasing power parity (PPP) terms in 2015. However, the hydrocarbon phase of economic growth plateaued in 2011 as the authorities implemented a moratorium on further gas export developments in the North Field. Since then, Qatar has entered a new phase of growth driven by the development of the non-hydrocarbon sector and the creation of a more diversified economy.

Hydrocarbon revenues are invested in major infrastructure projects, helping to diversify the economyQatars National Vision 2030 (QNV 2030) aims to transform the country into a knowledge-based economy.

To that end, Qatar has used its significant hydrocarbon surpluses to undertake a major program of infrastructure investments. Project spending, needed for the long-term development of the country and also to meet the deadlines ahead of the FIFA World Cup in 2022, is attracting a large influx of expatriate workers.

Together, investment spending and population growth provide a major boost to domestic demand, leading to rapid growth in the nonhydrocarbon sector and diversification of the economy away from dependence on oil and gas.

Beyond 2022, Qatar is expected to enter a new human capital phase of growth based on attracting, developing and retaining talent.

In line with QNV 2030, Qatar aims to transform itself into a knowledge-based economy.

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Recent Developments (2015-2016)Oil prices fell for 18 months but have recently rebounded Oil prices fell sharply in 2015 to an average of USD53.6 compared to USD99.5 in 2014.

The decline was mainly due to large additional supply from the US in the early part of 2015 and from OPEC throughout the year.

The new supply exceeded demand growth, which rose to a five-year high.

As a result, the oil market was over-supplied by around 1.8m b/d in 2015. The decline in oil prices continued in the beginning of 2016 to a low of USD28/barrel on concerns about slowing global growth and currency devaluation risk in China.

Since then, oil prices have recovered to nearly USD50/b currently. The pickup in crude oil prices was mainly due to stronger oil demand, supported by easier global monetary policy and better economic activity data, especially from the US and China.

These developments have offset the drag from higher supply, coming largely from increased Iranian production, which has risen 0.6m b/d since the lifting of sanctions.

Despite lower oil prices, the economy continued to grow driven by the non-hydrocarbon sector Qatars real GDP

grew by 3.7% in 2015.

The nonhydrocarbon sector continues to be the engine of growth as it accounted for 63.8% of total GDP in 2015. It expanded by 7.8%, driven by the large investment spending program.

The building and construction sector remains the main direct beneficiary of this program, contributing an estimated 2.2 percentage points (PPS) to non-hydrocarbon GDP growth.

The large influx of expatriate workers has generated strong demand for services such as finance, insurance and real estate; trade, restaurants and hotels; and government services. Indeed, services were the largest contributor to non-hydrocarbon GDP growth, adding an estimated 5.0pps. Manufacturing was also one of the main growth sectors with a contribution of 0.7pps, benefiting from Qatars movement up the hydrocarbon value chain.

Meanwhile, hydrocarbon production fell slightly by around 0.2% in 2015. The decline was mostly due to maturing crude oil fields as natural gas production remained flat.

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CPI inflation experienced a broad-based decline in 2015 Inflation fell from 3.4% in 2014 to 1.6% in 2015. The decline was partially due to the fall in global inflation on the back of weak global growth, the decline in oil prices and the fall in international food prices.

Domestic inflationary pressures also eased due to higher supply capacity in the economy, which helped absorb the additional demand from the rising population (9.8% growth in 2015). This was most evident in the housing and utilities component (accounting for 21.9% of the CPI basket), where inflation fell from 7.8% in 2014 to 2.9% in 2015.

The current account surplus narrowed on lower oil prices.

The current account registered a surplus of 8.2% of GDP in 2015, down from 23.5% in 2014. Lower oil prices and the decline in hydrocarbon production reduced export revenue from 66.7% of GDP in 2014 to 55.3% in 2015.

Meanwhile, strong domestic demand driven by investment spending and population growth resulted in a higher share of imports to GDP. Capital outflows, mainly representing foreign investments by Qatar Investment Authority continued, leading to a capital and financial deficit of 11.8%.

The overall balance of payments registered a deficit of 3.3% of GDP in 2015, down from a small surplus of 0.6% in 2014.

As a result, international reserves fell from USD43.0bn at the end of 2014 to USD37.1bn at the end of 2015.

However, reserves are still sufficient to cover 7.6 months of prospective imports, well above the recommended level of three months of import cover for fixed exchange rate systems.

The budget balance continued to be in surplus in 2015, despite lower oil prices.

The governments budget surplus declined from 13.3% of GDP in the calendar year 2014 to 3.7% in 2015. The decline was mainly due to lower oil prices which, together with lower hydrocarbon output, reduced the governments revenue from 45.4% of GDP in 2014 to 39.3% in 2015.

At the same time, expenditure increased from 32.0% of GDP in 2014 to 35.6% in 2015, reflecting increased capital spending which continued despite lower oil prices. However, current expenditure fell on the governments

29


attempts to rationalize public spending and improve efficiency.

Public debt remains low by international standards, estimated to be at 39.8% of GDP in 2015.

This has allowed the government to borrow from international markets. Qatar secured a USD5.5bn syndicated loan in January 2016, and then sold USD9.0bn of bonds in May (the largest ever bond issuance from a Middle East government).

The government intends to use these funds to finance potential future deficits.

Banking assets continued to expand at a double-digit rate on strong lending growth. Banking assets grew by 10.8% in 2015, underpinned by strong credit growth of 15.2%.

This was mainly driven by loans to the domestic private sector as the implementation of the investment program boosted credit growth to real estate and contractors.

The rapid population growth generated strong demand for loans in consumption and general trade. Loans to the public sector grew by 2.0% following a small decline in 2014. Meanwhile, deposit growth slowed to 8.2% in 2015 from 9.6% in 2014, largely due to the decline in public sector deposits. This was offset by the growth in private sector and non-resident deposits.

Overall, the banking sector remains healthy. Non-performing loans are low at 1.6% of total loans in 2015. Banks are well-capitalized and have fully complied with Basel III capital adequacy standards, with a capital adequacy ratio of 15.6%. This has supported profitability in the banking system with return on assets of 2.0% and return on equity of 16.2% in 2015.

Macroeconomic Outlook (2016-2018)Oil prices are expected to recover over the medium term Oil prices are forecast to continue their recovery as excess supply is reduced. Part of this reduction will be due to higher demand, mainly from emerging markets.

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We also expect production cuts in the US, whose output has been in steady decline since it peaked in April 2015. However, this is likely to be offset by additional production from Iran and the rest of OPEC. The overall reduction in excess supply should result in oil prices averaging USD40.8/b in 2016. In 2017, excess supply should fall further as the market continues rebalancing.

Demand growth is expected to remain steady, while additional OPEC production is expected to be offset by lower US supply. This should push prices to average USD51.3/b. In the medium term, oil prices are determined by the cost of the marginal producers, in this case US shale oil companies, which is currently estimated to be USD60/b. We therefore expect a gradual convergence of oil prices to this level, leading to an average oil price of USD56.0/b in 2018.

Growth is expected to accelerate from 2017, driven by large investment spending and gas production from Barzan Real GDP is expected to grow by 3.3% in 2016, 3.9% in 2017 and 4.2% in 2018.

The non-hydrocarbon sector is forecast to remain the main driver of growth due to the ramp up in investment spending, which is expected to peak towards the end of this decade. In addition, services are projected to benefit from the resulting population growth, which is expected to average 7.0% over the next three years. As a result, non-hydrocarbon GDP growth is expected to reach 6.5% in 2016 before picking up to 6.9% in 2017 and 7.0% in 2018 with the ramp up in investment spending.

Meanwhile, hydrocarbon production is expected to be flat in 2016 as declining oil production is offset by initial gas production from the Barzan (a USD10.3bn project to provide gas to meet the rising domestic demand).

Additional gas and condensates production from Barzan should lift hydrocarbon growth to 0.7% in 2017 and 1.0% in 2018, notwithstanding the decline in crude oil production.

Inflation is expected to pick up on international and domestic factors Inflation is expected to rise to 3.2% in 2016 and 3.4% in 2017, before moderating slightly to 3.0% in 2018.

Inflation in Qatar is determined by two major factors:First, global inflationary trends, since a large part of the Qatari consumer basket is imported.

Second, the rate of migration into Qatar, as it represents the additional demand that needs to be absorbed by the existing supply capacity.

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Both of these variables point to rising, but still contained inflation in Qatar over the medium term. Global inflation is expected to pick up with rising oil and food prices, and continued above trend growth in advanced economies.

Furthermore, strong population growth in Qatar is expected to generate inflation from domestic sources as the additional demand creates upwards pressures on prices.

The current account surplus is expected to fall before picking up from 2017, reflecting the movement in oil prices.

The current account surplus is expected to fall to 2.0% of GDP in 2016 before rising to 5.0% in 2017 and 5.2% in 2018. The profile mirrors the projected movement in oil prices, given that hydrocarbons account for more than two-thirds of Qatari exports. Meanwhile, imports are expected to continue growing (in Qatari riyal terms) due to strong domestic demand from large investment spending and rising population.

The capital and financial account is projected to remain in deficit over the next three years on continued Qatari investments abroad.

International reserves are expected to be maintained at just below USD40bn, or around seven months of prospective import cover.

Lower hydrocarbon revenue and continued capital spending by the government should tip the budget balance into a deficit.

The governments budget balance is expected to register a deficit of 5.4% of GDP in 2016, before gradually recovering to near balance by 2018.

The governments revenue is expected to recover in 2017 with rising oil prices. Furthermore, the introduction of a value-added tax (expected at 5% rate) should boost the governments revenue in 2018 by about 1% of GDP.

On the expenditure side, the rationalization of current expenditure and the recovery in nominal GDP should lower the public spending share of GDP between 2016 and 2018, notwithstanding the ramp up in public investments.

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The government has signalled its intention to finance the deficit with debt issuance. As a result, public debt is expected to rise to 49.7% of GDP in 2016, before moderating to 42.3% in 2018 with the projected recovery in oil prices and nominal GDP

Bank credit is expected to continue expanding on lending to projects and consumption.

Bank lending is expected to grow by 11.0% in 2016 and 9.0% in each of 2017 and 2018, driven by project lending and higher consumption from the rising population. This is expected to lead to a strong asset growth averaging 9.0% a year during 2016-18.

Lending is likely to be underpinned by the growth in deposits, expected to average 8.2% over the next three years, reflecting continued population growth, higher policy rates and the recovery in oil prices.

The loan to-deposit ratio is expected to stabilise at around 120%. NPLs are forecast to remain low over the medium term reflecting the robust macroeconomic environment.

Efficient cost bases and strong capitalisation will continue to support banks profitability and health in the future.

Key Macroeconomic Indicators Sources: BP, IMF, MDPS, QCB, Haver Analytics and QNB Economics forecasts .

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With the discovery of the third largest gas reserves in the world, Qatar has become one of the fastest growing economies. This abundance of natural resources and favorable demographics, has allowed Qatar to boast one of the highest per capita income in the world.

In recent times, Qatar has streamlined its regulations to attract foreign capital and is making a concerted effort to diversify into non- hydro-carbon sectors.

The Government of Qatar through its investment arm, Qatar Investment Authority, has also been making strategic investments both in Qatar, and overseas to reduce its dependency on oil and gas.

These opportunities to do business have grown with Qatar winning the bid to host the FIFA World Cup in 2022.

Ease of starting a business in QatarQatar is ranked 48th for the year 2014 in the Ease of Doing Business ratings (out of 189 economies) maintained by The World Bank. The table below is an extract from The World Bank report which covers some of the basic procedures to be completed to start a business in Qatar.

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Investing in Qatar

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Foreign investment policy in QatarLegal FrameworkThe main legal framework for companies doing business in Qatar is the Commercial Companies Law No. 5 of 2002, which deals with companies and partnerships.

The Commercial Companies Law, read with the Foreign Investment Law No. 13 of 2000, govern the general principles of foreign investment in Qatar. Foreign participation in business activities in Qatar is allowed in all sectors of the national economy except in banking and insurance (unless authorized by a Decision of the Cabinet of Ministers), commercial agency and real estate trading sectors.

The general rule under Article 2(1) of the Foreign Investment Law is that non-Qataris, whether natural or juristic persons, may invest in all sectors of the national economy only through the medium of a company incorporated in Qatar in which one or more Qatari persons and/or 100% Qatari entities hold not less than 51% of the share capital.

Foreign investors can, with a ministerial approval, increase their investment from 49% to 100% if the entity operates in the fields of agriculture, industry, health, education, tourism, development and use of natural resources, energy, mining, consultancy services, technical works services, information technology, cultural, sports, entertainment and distribution services.

Also, where projects are in-line with Qatars development plan (other than in the fields mentioned above), foreign investors may be authorized to hold 100% of an entitys capital. Such authorizations are assessed on a case-by-case basis, are not automatic and have been granted in a limited number of cases, in our experience.

Limited Liability CompanyThe Limited Liability Company (LLC) is the most commonly used investment vehicle. It is akin to the private company in other jurisdictions.

Common features are: Liability of shareholders is limited to the amount of

issued capital An LLC is not permitted to issue shares to the public Minimum capital of QAR 200,000

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100

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Requires at least two shareholders. Subject to approvals, if the share capital is entirely held by the foreign investor, it would be termed as a One Person Company

It is very common for the profit share attributable to the foreign investor to exceed their legal shareholding through shareholders agreements.

Branch OfficeA foreign entity carrying out a project in Qatar may be permitted to establish a Branch Office with 100% foreign ownership provided the contract is entered into with a government or quasi government entity. The project should facilitate the delivery of a certain service or should be in the public interest.

Generally, a branchs existence is co-terminus with the projects duration. It is sometimes possible to extend the duration of the branch with the approval of the Ministry of Economy and Commerce. However, contracts with private parties do not typically qualify for Branch Office status.

Representative Trade Office (RTO) RTO allows a foreign company to market its services and products in Qatar. The RTO cannot undertake any commercial activities or contractual work of its parent company in Qatar. Registration of the RTO is renewable on a yearly basis.

Commercial Agency relationship As discussed above, foreign nationals or juristic persons cannot undertake agency activities in Qatar. Those foreign investors who do not wish to establish a formal presence in Qatar may appoint a Qatari national or a company wholly owned by Qataris as commercial agents. The Commercial Agents Law No. 8 of 2002, in conjunction with the Foreign Investment Law, governs commercial agency agreements. Commercial agents must be on the Commercial Agents Register, kept by the Commercial Affairs Department at the Ministry of Economy and Commerce in Qatar.

The Qatari agent may be authorized to distribute goods or carry out services on behalf of the foreign principal in return for a fee or commission.

The agency agreements may be for a fixed duration or for an unlimited period. It is important to note that, where the agency agreement does not specify the time period, termination can occur only with the mutual consent of both parties.

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Further, Articles 8 and 9 of the Commercial Agents Law provide that, notwithstanding any other contradictory agreement and on the expiry of the agency agreement, the agent has the right to claim compensation from the principal if, in the belief of the agent, his activities have brought about substantial success in the promotion of the principals products, and refusal to renew the agency agreement has deprived the agent from gaining the remuneration arising from that success.

Registering with the Qatar Financial Centre (QFC)The QFC was established in 2005 with the aim of providing a world-class platform, the right legal and business environment to the financial services sector to realize Qatars ambition to become a prominent financial hub in the region. The main focus of the QFC was asset management, reinsurance and captive insurance. The QFC provides a robust regulatory regime and business friendly administration. The legal system in the QFC is based on English Common Law.

The QFC prescribes a range of activities (termed as Permitted Activities) which may be conducted in or from the QFC. Within the range of Permitted Activities are two sub-classifications: Non-Regulated Activities and Regulated Activities.

The ambit of Non-Regulated Activities covers providing professional services (such as audit, tax, legal and consulting services); ship broking and shipping agents; formation, operation, administration of companies; investment grading; activities of holding companies.

Regulated Activities are those financial services that require continuing scrutiny for proper conduct of a business, such as deposit taking, dealing in, advising on and managing investments, arranging credit facilities and effecting insurance.

Carrying out Permitted Activities in or from the QFC can only be done by entities with a legal presence (and obtaining a license) in the QFC.

Legal presence can only be established by incorporating a Limited Liability Company (LLC) or Limited Liability Partnership (LLP) with the Companies Registration Office (CRO), or by registering a branch of a non-QFC legal entity with the CRO.

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Recent changes in the QFCIn a bid to diversify and attract investment, the QFC amended its regulations and laws to allow for the establishment of Single Family Offices, Holding Companies and Special Purpose Companies.

Key benefits of the QFC Allows for 100% foreign participation Can set up a branch, an LLC or LLP The recent changes now allow for a wider range of

activities to be offered in or from the QFC The regulations do not impose any restriction on the types

of activities or business carried out by the subsidiaries of a QFC Holding Company, subject to necessary approvals

The QFC has its own immigration department that can fast track visa and immigration approvals.

Registering with the Qatar Science and Technology Park (QSTP)The QSTP is a free zone in Qatar, which was started with the vision of being recognized as an international hub for applied research, innovation and entrepreneurship. It is seen as a step towards building Qatar as a knowledge economy.

The QSTP is primarily a technology park rather than a business park. Any entity whose main activity relates to the advancement of technology can apply for a license in the QSTP. Projects that are one-off and which are unlikely to create intellectual property would generally not qualify for a license. Entities must be physically located within the boundaries of the QSTP and can only perform those activities which are in accordance with their license.

There is no standard application form and the applicant would typically have to demonstrate that a majority of its activities will be dedicated to research and development. Once a license is issued, a foreign entity may either register as a branch or a LLC in the QSTP.

While a standard license holder is entitled to all free zone benefits, a restricted license provides limited free zone benefits as designated by that license.

Key benefits of the QSTP Allows for 100% foreign participation Exemption from tax in respect of licensed activities Duty-free import of goods, equipment and tools into the

free zone Can trade directly in Qatar without a local agent The rents at the QSTP are highly subsidized

Foreign exchange controlsQatar generally does not have any foreign exchange controls or restrictions on the remittance of funds out of Qatar. Foreign investors in Qatar are free to remit profits, capital and cash, without any restrictions. Qatar, however, criminalizes money laundering and imposes sanctions against those committing this crime.

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Other commercial law aspectsProxy lawLaw No. 25 of 2004, commonly known as the Proxy Law or the Cover-up Law, prohibits non-Qatari nationals from being engaged in any commercial, economic or professional activity except those which are in accordance with applicable laws. The Proxy Law also makes it unlawful for any natural person or legal entity from harboring the non-Qatari in any manner whatsoever, enabling him/her to carry-out their activities.

Breach of the Proxy Law could result in heavy penalties or imprisonment or both. Penalties could also include cancellation of the commercial license and annulment of the commercial registration. Additionally, the amount of tax, if any, and penalties thereof could also be recovered.

Legal reserve requirements.The Commercial Companies Law mandates LLCs to transfer at least 10% of its annual profits (Articles of Association can specify a higher percentage) to a legal reserve. Such transferscan cease when the balance in the legal reserve reaches 50% of the share capital. The legal reserve is not available for distribution. The reserve may be used to cover the LLCs losses or to increase its capital. Therefore, it follows that heavily capitalized companies may have to set aside a larger portion of profits towards the legal reserve, which is not available for distribution.

Unincorporated joint venture (UJV) UJV is an unincorporated entity which is formed between two or more partners, which has no legal personality of its own and is not subject to any registration procedures in the commercial register. Therefore, third parties only have a right of action against individual partners in the UJV. However, if that partner held that a separate company existed, then the joint venture will be treated as a general partnership in order not to prejudice the third partys rights. This could lead to difficulties in effecting commercial or contractual rights and dispute resolution.

It is expected that the capital contributed by the foreign partner is restricted to 49% and the joint venture may not carry on any business which is reserved by law for Qataris.

An UJV is also not recognized by the Tax Legislation nor the Tax Authorities, but rather the individual parties to the UJV register as separate legal entities for tax purposes.

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Approvals and licensesAlthough, in general, all applications to establish a presence in Qatar are made to the Ministry of Economy and Commerce, certain approvals and licenses may be required from other government departments depending upon the proposed activity. A few examples are described below:

Manufacturing or industrial company requires clearance from the Supreme Council of Environment and Natural Reserves

Tourism Company requires clearance from the licensing department at the Qatar Tourism Authority

Pharmaceutical companies should register drugs with and obtain clearance from the Supreme Council of Health

Education institutions requires approval from Supreme Education Council.

Engineering Consultancy OfficeForeign engineering firms may be allowed to establish an Engineering Consultancy Office in Qatar as a 100% branch. An application must be made to the Acceptance Committee at the Ministry of Municipality - Urban Planning and Development Authority for a license. The main office should be licensed to practice the engineering profession in the foreign state in which the license is issued and at least 10 years must have elapsed since the issuance, during which time the main office has practiced continually in the engineering profession.

The engineer appointed by the branch must be entered in the International Register of Engineers maintained at the Ministry. The engineer must hold prescribed educational qualifications and practical experience of at least 10 years.

The process for registration could be lengthy and substantial documentation may be required. Approvals for joint ventures with a Qatari Engineer partner through the medium of a 51%-49% LLC is often an easier option.

Investment protectionThe Foreign Capital Investment Law states that foreign investments will not be expropriated unless it is in the national interest and that in the event of expropriation, compensation will be paid equal to the value of the investment before the expropriation.

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The foreign investor can transfer the equity ownership of the investment to another foreign or Qatari investor, or to the Qatari partner in the project, in accordance with other applicable laws and regulations in Qatar. The investment will continue to be treated in the same way under the foreign capital investment law, provided that the new investor continues the operations of the project and assumes the rights and obligations of the original investor. Compensation received on expropriation may also be freely remitted overseas.

Corporate tax overview Qatar tax resident companies wholly owned by Qataris and citizens of the other Gulf Cooperation Council (GCC) countries (Bahrain, Kuwait, Oman, Saudi Arabia and United Arab Emirates) are exempt from tax. Qatar tax resident companies that are not wholly owned by Qataris and other GCC citizens, are taxable up to the level of profits ultimately attributable to the non-GCC shareholders. Such companies are subject to tax at a flat rate of 10% on their taxable income (being gross business income minus allowable deductions). Only income derived from sources in Qatar is taxable.

Qatar does not impose income taxes on individuals salaries, wages, allowances or fringe benefits. Individuals other than Qatari or GCC nationals carrying out business activities in Qatar would be taxed under the rules for companies. When deemed a non-resident, tax will be withheld at either 5% or 7% withhold