Qatar to create 3 special economic zones

Qatar to create 3 special economic zones

In summer 2016, Qatar announced that it is planning to create three special economic zones aimed at attracting inward investment. The authorities have approved the bill, which is expected to become law at the start of 2017.

According to the IMF, foreign direct investment (FDI) inflows amounted to $1 billion in 2015. This took Qatar's FDI reserves to $30 billion, which is 14.8% of the country's GDP. The creation of three new economic zones over the next year is aimed at increasing and diversifying foreign investments and attracting new investors.

The sectors which attracted the most foreign investment in 2015 were, unsurprisingly, oil & gas, but also building & construction and financial services. Among the main countries which invested the most in Qatar in 2015 were the U.S., Japan, South Korea and Singapore. With this new law, Qatar is seeking to attract new investors from Europe, and in particular France, which is the second main recipient of investments by the Qatar Investment Authority.

In line with Qatar National Vision 2030 (QNV 2030) goals and the 2011-2016 National Development Strategy, the Qatari government has put tourism top of the agenda as one of the key sectors for boosting and diversifying the country's economic growth, with a development budget allocation of $45 billion. The Qatar Tourism Authority (QTA) intends to promote Qatar as "a world-class hub, with deep cultural roots".

Qatar's favorable fiscal regime has long been a major source of attraction for foreign investors. The corporate tax rate is just 11.3% (of locally sourced profits), compared with an average of 32.1% in the Middle East and North Africa. Simplified procedures are added attraction, making it possible to set up a new business in just 8.5 days, compared with an average of 18 days in the Middle East and North Africa.

For more information, see Doing Business 2016; Oxford Business Group; BNP Paribas - Trade solutions: S'implanter au Qatar (Setting up business in Qatar)