Qatar: Trade & Investment
The Law Regulating the Investment of Non-Qatari Capital in Economic Activities No. 25 of 1990 governs the area of foreign investment in Qatar. Under this law, non-Qataris are allowed to engage in trade, industry, agriculture and services under the condition that the non-Qatari investor must have one or more Qatari partners whose share in the business capital is at least 51 percent and that the business relationship with the Qatari partner must be carried on through a commercial company incorporated according to the Companies Law No.11 of 1986 (see section on Business Structures and Forms). The law does not permit non-Qataris to own shares in a joint stock company unless the shareholder is a national of an Arab country that has reciprocal agreements with Qatar or if there is a need for foreign capital or experience, and a license to that effect is obtained from the Minister of Finance, Economy and Commerce.
Non-Qataris meeting the above requirements may also carry on contracting business upon fulfillment of additional conditions. A special license from the Minister of Finance, Economy and Commerce must be issued following consultation with relevant government authorities. This requires that an application be submitted to the Minister, supported by all relevant documents. If 30 days elapse without a reply from the Minister, the application is presumed to have been rejected. Applicants whose applications were rejected may appeal to the Minister within 30 days. The decision in the appeal is final.
In determining applications, one of the factors considered is the demand for the type of business for which an application is made. Businesses engaging in fields for which there is a high demand in Qatar include businesses with high technology expertise.
In 1997, Qatar finalized legislation to abolish the requirement of 51 percent Qatari ownership. This step is aimed at attracting foreign investment in small and medium scale businesses. The new legislation will come into effect pending Emiri approval. As of 1999, this has yet to happen.
Qatar became a member of the General Agreement on Tariffs and Trade (GATT) in 1996. Prior to that time, it participated in GATT as an observer. As a member of the Gulf Cooperation Council (GCC), Qatar participates in the GCC's free trade arrangements. Qatar also became a member of the World Trade Organization (WTO) in 1995.
Qatar has been engaged, through the GCC, in trade and investment negotiations with the United States, the European Community and Japan. The dialogue initiated among them is ongoing. In addition to the GCC Economic Agreement (1983) signed among member states of the GCC, Qatar has also signed economic/commercial agreements with Egypt and Tunisia.
Import and Export Restrictions
Goods and commodities imported into Qatar are subject to customs tariffs as follows:
General goods and commodities 4%
Reinforced Iron Bars, Steel and Cement (similar to local manufacture or equivalent) 20%
Ammonia (similar to local manufacture or equivalent) 30%
Cigarettes and Tobacco Products 50%
Essentials and Personal Items (such as foodstuffs, machinery and raw materials for industrial projects)
Imports into Qatar require an import license, which may only be issued to Qatari citizens. Agents and agency agreements are subject to the Law Concerning the Regulation of Activities of Local Commercial Agencies and Their Foreign Principals 4/1986, as discussed in the above section on Commercial Agencies.
In accordance with Islamic tradition, the importation of pork and pork products is prohibited. Also prohibited are firearms, ammunition, immodest prints and pictures, narcotics and artificial pearls. Alcohol and alcohol products are discouraged by the imposition of heavy customs duties.
Goods from other Gulf Cooperation Council countries are given preferential tariff rates. According to a reciprocity agreement among the GCC states, products of GCC origin are exempted from customs duties. Except for steel, along with tobacco and cigarettes, all general merchandise is subject to 4 percent customs duties. The current rate of customs duty for steel is 20 percent, 10 percent for hi-fi equipment and 100 percent for tobacco and cigarettes.
There are no export charges on goods or commodities exported from Qatar.
Public Sector Procurement
In Qatar, the government is the main end-user of a wide range of products and services. The government's procurement policy is based on standard tender procedures. In order for foreign firms to participate in those tenders, they must obtain a local agent.
In general, The Qatari government does not award turnkey contracts, preferring to award separate contracts to consultants. The government announces invitations to pre-qualify in local and/or foreign papers and periodically through Qatari embassies abroad. Law No. 8 of 1979 also provide for classification of contractors by a committee operating under the Central Tenders Committee (CTC). This process is based upon the firm's financial standing, business reputation and experience. Preference is usually accorded to the lowest bidder that meets all specifications.
Labor Law No. 3 of 1962 (as amended) governs industrial relations in Qatar. Under the Labor Law, priority in employment is granted to Qataris, then to nationals of Arab countries and, finally, to other non-Qataris. Non-Qataris can be employed only if they obtain a work-permit from the Department of Labor in the Ministry of Labor and Social Affairs. The applicant must have a valid passport and a resident permit and must be of good conduct and reputation. Generally, permits are valid for two years.
There are no fixed minimum wages in Qatar, and no pension schemes are available for non-Qataris. There are no labor unions in Qatar, and strikes, lockouts and slowdowns are prohibited. Workers are entitled to one day off per week and to other benefits such as holiday on the occasion of Ramadan, annual paid leave of fourteen days, illness pay and severance pay. The Department of Labor in the Ministry of Labor and Social Affairs resolves all industrial disputes, after which the matter may be referred to the Labor Court for a final decision.
Qatar is a signatory to a number of international environmental conventions, including: The Convention of the Prohibition of the Development, Production and Stockpiling of Bacteriological (Biological) and Toxin Weapons, and their Destruction; International Convention for the Prevention of Pollution of the Sea by Oil, 1954 Concerning the Protection of the Great Barrier Reef of Australia (and amendments thereto); Agreement for the Establishment of a Commission for Controlling the Desert Locust in the Near East; Kuwait Regional Convention for Cooperation on the Protection of the Marine Environment from Pollution; and the Treaty on the Prohibition of the Emplacement of Nuclear Weapons and other Weapons of Mass Destruction on the Sea Bed and the Ocean Floor and in the Subsoil Thereof.
© 2000 Mena Report (www.menareport.com)