Country Report Qatar

Economic Overview

The economy demonstrated strong resilience in the final quarter of 2017 despite the ongoing economic blockade, with output expanding 1.8% in annual terms, just shy of the third quarter’s 1.9% rise.
The fourth-quarter print reflected a solid performance from the non-hydrocarbon sector, particularly in construction-related activity which more than offset a drop in production in extractive industries.

Industrial production continued to improve in annual terms in January while exports increased markedly in February on the back of higher hydrocarbon shipments, leading the trade surplus to expand at a rate of over 20% year-on-year.
In addition, the banking system remains in good shape, reflected in healthy capitalization levels, stable private sector credit growth and the gradual return of non-resident deposits.

Qatar’s economic freedom score is 72.6, making its economy the 29th freest in the 2018 Index.
Its overall score has decreased by 0.5 point, with steep drops in the government spending and monetary freedom indicators outweighing higher scores for government integrity and investment freedom.

Qatar is ranked 2nd among 14 countries in the Middle East and North Africa region, and its overall score is above the regional and world averages.

Key sectors in Qatar

Industrial Sector

The industrial sector in Qatar is one of the most important strategic pillars of sustainable development.
It is considered to be one of the major players in diversifying national income, and subsequently, reducing dependence on oil and gas as the main component of GDP.

Investment and Banking Sector

The sector provides a well-organized workspace for concluding financials deals and agreements and satisfying demand on money when it arises. Among these institutions are banks, saving funds, investment houses, insurance and re-insurance companies and securities markets.

Trade Sector

The Trade sector stands for the mutual exchange of goods, services or both.

Construction Sector

The state of Qatar boasts a thriving construction and real estate sector that caters effectively to the enormous infrastructure and urban planning projects in the country.
Its huge contribution has assisted in the global positioning of Qatar as a rapidly developing forward thinking nation, and a seat of architectural excellence.

Cultivation Sector

It caters for the food needs and requirements of the whole community. It is capable of achieving self-sufficiency of food products and food security which is one of the most crucial issues relating to community welfare and prosperity, as well as satisfying its basic needs.

Service Sector

This sector is considered to be one of the fast growing economic sectors in Qatar, a key example being the telecommunications sector.

Taxes in Qatar

Personal Tax

There is no tax on personal per capita income.
This means that employees take home their wages and salaries without any tax deducted.

However, an individual who exercises any type of commercial activity with the intention of gaining income is required to pay tax according to the Companies Tax law.

The total income of Qatari and GCC nationals resident in Qatar is exempted from paying tax. Resident is defined as anyone who owns a permanent accommodation in the State of Qatar, or stayed in for more than 183 days continuously or intermittently during (12) months, or his vital interests are linked to Qatar.

Company Taxation

The rate of tax is 10% of a company’s Total State Income, paid annually.

This fixed rate is only applicable on businesses and not on individuals’ incomes.
Typical business costs are deductible and losses can be rolled over for a period no longer than 3 years from the original accounting declaration.

“Commercial Activity” means any profession, vocation, service, trade, industry, speculation, contractual work or any profit & income making business. Rental income is subject also to a fixed tax rate of 10 %.

Tax exemptions

Tax exemptions apply to the following:

– Profits and revenues on Public Treasury Bonds, Development Bonds and Public Corporation Bonds.
– Dividends and other income from shares that comply with conditions set out in Article 4, Law No. 21 of the year 2009. – Small handcraft businesses (three employees or less).
– Income of companies working in agriculture, fisheries, aerial and maritime transportation, on condition of reciprocity.
– Qatari legal persons residing in the State.

Tax on Capital Gains

Capital gains on the disposal of real estate and/or securities derived by an individual are exempt from Capital Gains Tax provided the asset is not part of a taxable activity.

Other Taxes

There are no more taxes as Qatar is one of a number of low taxation countries around the world, which makes it attractive to expats (individuals and companies).

Investing in Qatar

Foreign investment in Qatar is governed by Law 13 of the Year 2000 on the Organization of Foreign Capital Investment in Economic Activity, as amended (the Foreign Investment Law).

It allows non – Qatari investors to invest in all sectors of the Qatar economy, subject to the requirement that 51 percent of the share capital in the venture be held by a Qatari person, legal or natural.

Foreign investment is generally not permitted in banking and insurance activities (unless by Ministerial Resolution or if such activities fall under an applicable Free Zone) nor commercial agency or real estate activities. There are, however, certain exceptions with respect to real estate which allow for the provision of land necessary for government approved investment projects.

A concession is made when the foreign component of the ownership in the new venture is made up of a GCC national or wholly-owned GCC legal entity. In this case, the GCC national or legal entity may own up to 50 percent of the share capital in the new Qatar venture with a Qatari counterpart holding the remaining share capital.

For the purpose of this law, a Qatari legal person is restricted to an entity owned wholly by a Qatari national. An exception to the foreign ownership rules may be granted to foreign companies or individuals who obtain a decision from the Minister of Business and Trade for carrying on business in Qatar as a 100 percent foreign-owned entity.

The exception may be granted provided that the field of business falls within one of the following sectors of the economy:

– Agriculture;
– Industry;
– Health;
– Education;
– Tourism;
– Development and exploitation of natural resources;
– Businesses of technical and information consultancy;
– Cultural, sports and entertainment services;
– Distribution services; and
– Energy or mining, provided that such projects match the development plan of the State of Qatar.

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