THERE IS more to Qatar than the 2022 World Cup, but it’s impact is evident everywhere by the massive infrastructure projects underway.
Doha is an interesting city, in a country of just two million people and blessed with the phenomenal wealth thrown off from the second-largest gas reserves in the world. As Dubai has the intention of becoming the Middle East’s financial services hub, so Doha wishes to fulfil this role for natural resources.
Qatar is the world’s wealthiest country as measured by GDP per capita of greater than $110,000. A country able to throw $100bn of infrastructure ahead of the 2022 World Cup can probably afford to do just about anything, but nine brand new football stadia?
In my three days there I experienced a lavish new downtown, stunning new buildings, an airport only 20 minutes away (I missed the opening of a new one by only one month!). Being a dry state, most meals and alcohol are consumed in what are quite sterile hotel restaurants. There are many Arab gentlemen in their dishdasha robes but few Muslim women are seen. It was hot, very hot, at over 40 degrees most days; far too hot for football.
UKTI shows Qatar as a growing market for UK companies, exports have doubled recently with bilateral trade exceeding £7bn. Qatar was a British protectorate until 1971 at which point it was granted independence, so English is very widely spoken.
There are many opportunities for UK businesses. In terms of construction, even after a decade of substantial investment, there is still more needed and luxury retail will continue to flourish with such a high rate of disposable income. The question is, will it become a holiday and investment destination for the world’s high net worths, I’m not sure.
The natural resources sector and gas, in particular, will surely deliver many supply chain opportunities. On my flight out I sat next to an Australian healthcare consultant who explained how significant an area of investment this was for the Qatar government.
But is doing business there easy? Visas for short visits can easily be obtained but make sure you leave time to arrange them. Work permits for extended stays have to be secured through local sponsors and at a cost. With the need for migrant workers and to entice foreign business into Qatar, work permits are becoming easier to secure. Foreign expatriates can own property in Qatar and the value of real estate is rising fast. The Pearl of the Gulf development, where I stayed, has been built offering 7,500 dwellings. As well as the Australian on the plane, I met with a young executive from a south east Asian airline setting up in Doha, and they both commented that getting things done can come down to who you know and an improper or misconstrued comment in the wrong company can bring the shutters down.
There are little things to be mindful off too; the airline executive commented on a member of staff spending a night in the police cells because he was spotted by passing police kissing his girlfriend at an ATM. Cross-gender contact is just not done in public, but you will see the Arab gentlemen in deep embraces.
Foreign direct investment is encouraged by the Qatar government through their Investment Promotion Department at the Ministry of Business & Trade. Other than a minor rule by which a company has to maintain reserves up to 50% of its share capital, companies can remit profits earned and there are no foreign exchange restrictions. The government encourages JVs and can offer incentives to do so, including very cheap energy, no customs or import duties on plant and equipment, no export duties and importantly, no corporation taxes on profits for negotiated periods.
The “Law of the Land” is ostensibly Sharia (Islamic) law, but the legal system is evolving and companies are governed by the Commercial Companies Law. Tax is quite easy; income tax is levied on partnerships and companies whether domestic or foreign owned and the general tax rate is 10%. Petroleum related operations are taxed at 35%. There are no personal taxes, social security costs or other deductions from payrolls.
I used to work in Milton Keynes; back then it was new, unfinished and soulless. So is Doha. It will undoubtedly thrive, but will it ever be a fun place to be?
Kim Hayward is a partner at BDO