Qatar outlines new legislation for setting up Financial Centre
Mohammed A. Althani, Qatar's Minister of Economy & Commerce has outlined new legislation designed to attract international financial institutions and multi-national corporates to set up in the new Qatar Financial Centre.
Speaking in Doha at a conference sponsored by the Middle East Economic Digest (MEED), the Minister stated that the Qatar government is committed to forging closer partnerships with international business to enable them to share in the country's vibrant economy. The Minister explained that Qatar has developed a different model to other financial centres in the GCC region. Key differences are:
• Qatar has created a new regulatory environment where businesses can set up in Doha with minimal cost, minimal risk and minimal bureaucracy. Firms will enjoy a three year tax holiday after which a relatively low tax rate applies on profits
• Qatar is not offering an offshore centre because it believes in a taxed environment. This also necessitates high quality accounting and reporting which is viewed favourably by international organisations, such as the OECD
• Qatar wants to share in the value created by international firms in the medium to long term, rather than charging upfront fees, commissions or per capita charges
• Qatar's financial centre is not a property play. Qatar recognises that international firms will require state-of-the-art offices and is leasing a purpose built tower in Doha to provide such facilities at relatively low cost. However, Qatar is motivated in building successful partnerships with profitable companies, rather than big real estate projects.
• Qatar has the fastest growing economy in the world and by 2012 Qatar will be the largest LNG supplier in the world. Furthermore, Qatar is committed to spending $108 billion on infrastructure and hydrocarbon projects over the next five years. These projects, combined with the rapid growth of the economy, present significant opportunities in project finance, bond issuance, insurance, reinsurance, asset management, private banking and general business support services. For those international firms based in the QFC there will be clear advantages.
• Qatar has developed a modern infrastructure-including schools and universities, hospitals, hotels, resorts, shopping malls and sports facilities-while retaining its distinctive culture. Qatar has a modern, progressive outlook and strong international ties across the world. The quality of lifestyle is high.
The Minister explained that the commercial and regulatory laws are in place for the financial centre. The centre will include the Qatar Financial Centre Authority who will run the centre and drive the commercial strategy, reporting to the Council of Ministers. Secondly, a fully independent Qatar Financial Centre Regulatory Authority will oversee business conduct, and grant licences to operate in the centre. Importantly, the Regulatory Authority will also report to the Council of Ministers. Thirdly, an Arbitration body will adjudicate on appeals. All three bodies have been established to meet international best practice, based on consultation with the international financial community. The legislation also allows full repatriation of profits and 100 per cent foreign ownership.
An international recruitment firm is currently vetting candidates for the roles of CEO of the Qatar Financial Centre Authority and the Chairman and CEO of the Qatar Financial Centre Regulatory Authority, respectively.
The Minister concluded: "Qatar is developing its financial centre from a position of strength. We are one of the few countries to enjoy a fiscal surplus, an A+ stable Sovereign risk rating and extremely high GDP growth. By aligning our goals with the international firms we seek to attract, we aim to create progressive partnerships whereby we enable firms to operate profitably in Qatar – this, in turn, benefits the country. I am confident that the new financial centre marks another significant step in the transformation of our economy."