Learn about barriers to market entry and local requirements, i.e., things to be aware of when entering the market for this country.
Economic Overreliance on the Hydrocarbon
Scams: The U.S. Commercial Service and the U.S. Embassy receive constant reports of scams directed at U.S.-based firms. These scams often involve a nefarious person or entity posing as a legitimate Qatar-based entity or investor. U.S. firms that are approached by entities claiming to be Qatari representatives or investors, particularly if they request any sort of private information and/or advance fees, should contact the U.S. Commercial Service in Doha to confirm the veracity of the opportunity before proceeding.
Foreign Ownership: Qatar generally encourages foreign investment and has enacted some key reforms in recent years to foster FDI. Qatar’s former foreign investment law (Law 12/2000) generally limited foreign investment and ownership of local entities to 49% of capital. As part of the government’s efforts to attract more foreign companies and investors to the Qatari market, a new foreign investment law was approved in January 2019 (Law 1/2019), allowing 100% foreign ownership in most sectors, with full repatriation of profits, protection from expropriation, and several other benefits. However, these new laws remain largely unproven and the processes to start a business remains sluggish and laden with red tape. In its 2020 Ease of Doing Business report, the World Bank ranked Qatar 108th of 190 economies in the world for its ease of starting a business.
Additionally, with regard to foreign ownership of real estate investments, the government enacted a law (Law 16/2018) to allow foreign individuals, companies, and real estate developers freehold ownership of real estate in ten designated zones and usufructuary rights up to 99 years in 16 other zones. This law also allows foreign real estate investors and owners to request residency in Qatar for as long as they own their property.
Government Procurement: Procurement Law 24/2015 aims to promote a fair, transparent, simple and speedy tendering process. The law removed the Central Tendering Committee and created a Government Procurement Department within the Ministry of Finance which has oversight responsibility over the majority of government tenders. The law also called for the forming of committees for tender disputes resolution, allowing two-stage tendering, and providing performance bond waivers for SMEs. Nonetheless, there are some persistent concerns regarding transparency in procurement by government entities, particularly due to a lack of clarity in the conditions and criteria of tenders, improper notification or explanation to non-qualifying companies, and the inability of bidders to formally challenge awards. Qatar gives preferential treatment to suppliers using local content in bids for government procurement. Bids for government contracts that contain goods with Qatari content are discounted by 10%. Participation in tenders with a value of QAR 5,000,000 ($1.37 million) or less is limited to locally registered contractors, suppliers and merchants. The Government Procurement Department also created a website Government Procurement Services, to consolidate all tenders with the goal of providing relevant information to interested bidders; unfortunately, not all government tenders are included in this portal. Qatar is not a signatory to the WTO Agreement on government procurement.
Import Duties: While this doesn’t present a major barrier, it is important for U.S. companies to make sure their products are not subject to import restrictions and that proper import duties are paid. The import duty for most processed food products is a flat 5% ad valorem. There are no import duties for live animals, fresh fruits and vegetables, seafood, grains, flours, tea, sugar, spices, and seeds for planting. As a GCC country, Qatar applies the Unified Customs Law. This includes the imposition of a 5% tariff on the cost, insurance, and freight values of products such as textiles, apparel, and travel goods. An excise tax of 50% was introduced on energy and sugary drinks on January 1, 2019. A 100% excise tax was also introduced on alcohol and “specialty” products, including tobacco and pork.
Import Restrictions: Qatar has no import quotas. Non-tariff barriers, however, arise occasionally. For instance, unlicensed military and security items are not allowed. Furthermore, prior to 2012, the government maintained a ban on pork imports. The sale of pork remains heavily regulated and sales are restricted to only one distribution point in all of Qatar, which is managed by the Qatar Distribution Company (QDC).
Standards and Labeling: As part of the GCC Customs Union, Qatar works with other member states toward unifying custom standards and conformity assessment regimes. Nonetheless, each member state is applying its own existing standards until a uniform GCC standard is set. The Embassy commercial team has received periodic complaints of European standards being favored over U.S. standards.
Food Labeling and Packaging: Labeling and marking requirements are compulsory for any products exported to Qatar. Labels must either be in Arabic only, or bilingual with Arabic as the second language. Labels must be applied prior to transportation. Production and expiration dates are required to be on all “original” food labels.
Personal Connections: Corruption in Qatar does not generally affect business. Qatar ranks 30th in the world on Transparency International’s 2019 Corruption Perceptions Index, a position it shares with Spain, Portugal, and Barbados, with a score of 62/100 (with 100 being very transparent and 0 being very corrupt). While Qatar’s score reflects less transparency than businesses can expect to find in the United States (69/100), Qatar has the second-most transparent score in the Middle East/North Africa region. However, with a very small population of Qatari nationals, the power of personal connections in Qatar plays a major role in the local business culture. Companies need to be very cognizant in selecting the right local partner. If companies opt not to open a local office, they should travel regularly to the market to ensure they maintain the necessary connections to succeed.
Travel Advisories: Stringent Covid-19 travel restrictions have been in place since March 2020, halting business travel to/from Qatar. U.S. citizens visiting Qatar are advised to check the U.S. Embassy’s website for the latest information on travel to Qatar.