The U.S. Department of State’s Investment Climate Statements provide information on the business climates of more than 170 economies and are prepared by economic officers stationed in embassies and posts around the world. They analyze a variety of economies that are or could be markets for U.S. businesses. The Investment Climate Statements are also references for working with partner governments to create enabling business environments that are not only economically sound, but address issues of labor, human rights, responsible business conduct, and steps taken to combat corruption. The reports cover topics including Openness to Investment, Legal and Regulatory Systems, Protection of Real and Intellectual Property Rights, Financial Sector, State-Owned Enterprises, Responsible Business Conduct, and Corruption.
Executive Summary
The State of Qatar is one of the world’s largest exporters of liquefied natural gas (LNG) and has one of the highest per capita incomes in the world. Qatar’s gross domestic product (GDP) neared $180 billion in 2021, increasing by 24 percent year-on-year owing to higher hydrocarbons sales and overall economic recovery from the COVID-19 pandemic. According to the International Monetary Fund’s (IMF) projections, Qatar’s real GDP is projected to increase by 2.4 percent in 2023. This positive outlook is driven mainly by QatarEnergy’s ambitious plans to expand LNG production by more than 60 percent over the next five years. Qatar’s government projects a budgetary surplus of $8 billion in 2023, based on an oil price assumption of $65 per barrel.
The government remains the dominant actor in the economy, though it encourages private investment in many sectors and continues to take steps to encourage more foreign direct investment (FDI). The primary driver of Qatar’s economy is the energy sector, which has attracted tens of billions of dollars in FDI. In line with Qatar National Vision 2030’s goal of establishing a knowledge-based and diversified economy, the Government of Qatar (GoQ) has recently introduced reforms to its foreign investment and foreign property ownership laws. This recent legislation allows up to 100 percent foreign ownership of businesses in most sectors and real estate in newly designated areas. In 2020, the government also enacted legislation to regulate and promote public-private partnerships.
Significant opportunities for foreign investment exist in infrastructure, healthcare, education, tourism, energy, information and communications technology, and the service sector. The government allocated $20 billion for major projects in these sectors in 2022. Measured by the amount of inward FDI stock, manufacturing, mining and quarrying, finance, and insurance are the primary sectors that attract foreign investors. The government provides various incentives to attract local and foreign investments, including exemptions from customs duties and certain land-use benefits. The corporate tax rate is 10 percent for most sectors, and there is no personal income tax. One notable exception is the corporate tax of 35 percent on foreign firms in the extractive industries, including but not limited to those in natural gas extraction.
The GoQ recently adopted measures to prosecute human rights violations, improve its human trafficking legislation, address forced labor, and set a minimum wage, but the country continues to face challenges that may affect foreign businesses. These challenges include restrictions on free expression and peaceful assembly, a prohibition on collective bargaining for foreign nationals, discrimination against women in law and practice, and cases of forced labor.
To curb corruption and anti-competitive practices, the GoQ created a regulatory regime consisting of various enabled government agencies, including the Transparency Authority, the National Competition Protection Authority, and the Anti-Monopoly Committee. To improve transparency, the government streamlined its procurement processes in 2016, creating an online portal for all government tenders. Nonetheless, personal connections reportedly play a significant role in concluding business deals.
In recent years, Qatar has significantly bolstered its U.S. investments through its sovereign wealth fund, the Qatar Investment Authority (QIA), and its subsidiaries, notably Qatari Diar. In 2019, QIA pledged to allocate $45 billion to U.S. investments; it opened an office in New York City in 2015 to facilitate its U.S. investments. The fifth U.S.-Qatar Strategic Dialogue took place in Doha from November 2022 to March 2023 and further strengthened strategic and economic partnerships and addressed obstacles to investment and trade.
To access the ICS, visit the U.S. Department of State Investment Climate Statements Website.