ICDT’s Member States Business Guides

QATAR

I. PROFILE Location Qatar is situated halfway along the west coast of the Arabian Gulf, east of the Arabian peninsula. It is itself a peninsula between Saudi Arabia and the United Arab Emirates. Its territory includes a number of islands in the waters around it. The most well known of these are the Hawar Islands, Halul which is the export terminal for the offshore oil fields and others. Official name State of Qatar Area 11,437 sq km Population 723,542 inhabitants in 1999 Capital Major cities Wakrah, Dukhan, Umm Said, Al-Khor and Madinat Shamal Language is Official . English is used in business Currency Qatar riyal;1 Qatar riyal = 100 dirhams; $1 = 3.64 Qatar riyals Climate There are two climatic zones: Qatar’s climate is dry and hot in summer during which temperature may reach 49°C. in coastal areas humidity is considerable. The hottest months are July- September. Rains are very light. In winter, the climate is relatively mild. The coldest months are December-March during which temperatures vary between 10 and 25°C. Main holidays February 22nd , June 27th, September 3rd (Independence), Eid-ul Fitr*, Eid-ul Adha, Mouharram 1st and Eid-ul Mouloud*. Weekly day off Thursday afternoon- Friday. Local time GMT + 3. Working hours * Administration: Saturday-Thursday: from 8.00 A.m. to 1.00 P.m. Banks: Saturday-Wednesday: From 7.30 A.m. to 11.30 A.m. Thursday from 7.30 a.m. to 11.a.m. Business: Saturday-Thursday: 7.30.A.m. to 12.00.A.m And from: 2.30. P.m. to 6.00 P.m. Banks (Ramadan): Saturday-Wednesday: from 8.00 A.m. to 12.00 A.m. Thursday: from 8.00 A.m. to 11.30 A.m. Principle Manufacturing and Gas Growth Sectors (*) Variable dates

II. ECONOMIC SECTORS

The main economic sectors are: oil and gas, agriculture and fisheries, industry and manufacturing.

II.1. OIL AND GAS

ICDT’s Member States Business Guides

Oil has played a significant role in Qatar's economy accounting for about 85% of export earnings and 75% of government revenues. Currently, the country boasts oil reserves of about 3.3 billion barrels. One of the smallest OPEC members, Qatar produces over 400,000 barrels per day. Monitored by the state owned Qatar General Petroleum Corporation (QGPC), oil has been pumped from the onshore Dukhan field on the west side of the peninsula and three offshore fields. Qatar jointly owns the Bundaq oil field with the United Arab Emirates. QGPC has brought two refineries into operation with a majority of production being exported. The state-run company is hoping to increase overall oil production to 500,000 bpd. Qatar boasts the third largest reserves of liquefied natural gas (LNG) in the world behind the former Soviet Union and Iran. Qatar, according to a report by the international energy consultant firm Gaffney, Cline & Associates, possesses 30% of the world's proven gas reserves, but accounts for only 5% of global consumption. The country is expected to increase annual gas exports from the present level of 120,000 million cubic feet to 2.6 trillion cubic feet by the year 2010.

II.2 AGRICULTURE AND FISHERIES

The agriculture sector is modest and contributes about 2% to GDP annually. Currently, the country is self-sufficient for 70% of its summer vegetables and 40% in winter vegetables. There is some production of grains, eggs and poultry; however, the country is still dependent on food imports. Most of the workers in the agricultural sector are foreign. The government has made an effort to strengthen the agricultural sector offering several incentives to investors. Qatar has 28,000 hectares of arable land. The government has also placed increased emphasis on the fishing industry. The Qatar Fishing Company leads the sector and has a processing plant, which handles about 7 thousand tons of shrimp per year.

II.3 INDUSTRY AND MANUFACTURING

The government has actively promoted the development of both heavy and light industry concentrating on in-country resources. Cheap energy has led to the development of a steel and iron industry and healthy gas reserves have led to the establishment of chemical, fertilizer, and petrochemical industries. Cement is also produced in Qatar. Qatar's steel industry has established itself as a regional supplier.

The Qatar Steel Company (QASCO) began production in 1978 under the management of the Japanese. In the late 1980s, management passed to the Qatari government and since 1988, QASCO has operated at a profit.

Qatar is the only Middle Eastern producer that has successfully exported a major portion of its steel production. During the last decade, 90% of the company's concrete reinforcing bars have supplied 30% of the GCC market.

2 ICDT’s Member States Business Guides

Recently QASCO became the first Arab steel producer accredited with the Japanese Industrial Standard. This could lead to further Qatari exports to Japan and other East Asian countries. State-run companies have collaborated with foreign investors in developing petrochemical and fertilizer plants. Much of the production resulting from these ventures has been exported throughout the Gulf and the Far East.

The Qatar Industrial Manufacturing Company (QIMCO) has been established to promote private sector investment in small and medium-sized ventures. QIMCO holds direct investment in eight projects around the region.

III. INFRASTRUCTURES

III.1. ROAD NETWORK

The road network links Doha to Saudi Arabia at Abu Samra and to the United Arab Emirates at Sauda Nathil.

There is a continuous land connection with Europe. There is no railway network in the State of Qatar.

III.2. AIR TRANSPORT

The national Airline Company is Gulf Air in co-ownership with Bahrain, and the United Arab Emirates. The international airport is located in Doha 6km from the city.

Other international Airlines Companies serve Doha international Airport such as Air France, Air India, Alyemda, Balkan, Binan, Bangladesh, British Airways, Egyptian Airlines, Iran Air, KLM, Airways, MEA, PIA, Royal Jordanian, Saudi, Sudan Airways, Syrian Arab, TWA and .

III.3. MARITIME TRANSPORT

The main ports of Qatar are the following: Doha port (General Cargo), Umm Said port (industrial and oil products) and Ras Laffan port. Most of them are deepwater ports and are provided with berths. Besides most of containers enter from Dubai.

III.4. TELECOMMUNICATIONS

Telephone, telex, fax and telegrams services are available in Qatar. Direct lines link Qatar to more than 170 countries in the world. Qatar is member of Intelsat for international communications.

3 ICDT’s Member States Business Guides

IV. FOREIGN TRADE REGULATIONS

IV.1. THE LEGAL FRAMEWORK OF TRADE RELATIONS:

Qatar is member of the following international organisations: • World Trade Organisation (WTO); • United Nations Organisation (UNO) and its specialised organs; • League of Arab States; • Organisation of the Islamic Conference (OIC); • The Gulf Co-operation Council (GCC); • non-aligned Movement; • Oil Producing and Exporting Countries (OPEC); • The Group of 77; Economic and commercial agreements were signed between Qatar and the Gulf Co-operation Council Countries but also with the Countries of the League of Arab States.

IV.2. TRADE STRUCTURE:

IV.2-1. Main exported products:

• Oil products; • Steel; • Fertilisers.

IV.2-2. Main imported products: • Machinery and transport equipment; • Foodstuffs; • Chemicals.

IV.2-3. Main trading partners:

Main suppliers Main customers - Japan - France - Korea - United States - Singapore - Italy - United States - Japan - United Arab Emirates - Germany

IV.3. FOREIGN TRADE CONTROL:

IV.3-1. Imports regulations: * Pork and products are prohibited, while the imports of alcoholic beverages, firearms, ammunition and certain drugs are subject to licensing. Import licenses may be obtained from the Ministry of Finance, Economy and trade.

4 ICDT’s Member States Business Guides

Import documentary requirements are as follows: • Commercial invoice: Two original commercial invoices and at least one copy must be submitted, The exporter should check with the customer for the specific number of copies required. The invoice should contain full description of the packing along with the name of the supplier and the consignee, quantity, marks and numbers of goods, origin of goods, accurate description of the merchandise, value of the goods, CIF or otherwise itemising all expenses and the name of the vessel and the date of departure. The commercial invoice should be signed by the exporter or an authorised representative and certified by the appropriate chamber of commerce. • Certificate of origin: The original and one copy of the certificate of origin. The latter should indicate the name and address of the manufacturer or the producer of goods and the name of the vessel are required for shipment to Qatar. Shippers also must include a notarised statement certifying the document is true and correct. Exporters should contact their importers to ascertain the number of copies of this document that are required. The appropriate chamber of commerce must certify this certificate of origin, which must also be legalised by a consular service. • Bill of lading: There are no regulations specifying the form or number of bills of lading required for shipments. Bills of lading should show the name of the shipper, the name and address of the consignee, port of destination, description of the goods, the listing of freight and other charges, the number of the bills of lading in the full set, the date and signature of the carrier’s official acknowledging receipt on board of the goods for shipment. The information should correspond with that shown on the invoices and the packages. Expenses are generally paid in advance. The airway bill replaces the bill of lading on air cargo shipment. • Pro forma invoice: If required, a pro forma invoice stamped and signed by the supplying company or the exporter must be submitted. The delivery period and validity of the quotations must be indicated. The serial numbers of the goods mentioned in the invoice must conform to the numbering system of the Qatari government order sheet.

IV.3-2 Exports regulations:

Exports documentary requirements are as follows: • Insurance certificate: The insurance companies supply the insurance certificate. When the exporter carries out the shipment, the insurance certificate must state that the insurance company is not included on the so-called black list. This insurance must be certified by the appropriate chamber of commerce and presented to the consular section of the embassy for legalisation. Qatari offices require the original and one copy, then the original will be returned to the shipper. • Steamship company certificate: The Steamship Company supplies the steamship certificate. It must state that the ship is not an Israeli vessel and will not call at any Israeli port. The appropriate chamber of commerce must certify this certificate, which must be presented to the embassy for legalisation. Qatari offices require the original and one copy, then the original will be returned to the shipper. • Health certificate: Shipments of frozen foods must be covered by an inspection certificate in duplicate issued by the health authorities of the country of the origin. Imports of plants and plant materials must be 5 ICDT’s Member States Business Guides coupled with a official health certificate stating that they are free from diseases. The legalisation of the certificate is compulsory, the original is returned to the shipper.

Phytosanitary certificate: Two phytosanitary certificates are required for the shipments of flour, rice, wheat seeds and other agricultural seeds. The legalisation of the phytosanitary certificate is compulsory and the original will be returned to the shipper.

IV.3.3. Other formalities and documents:

• The legalisation of the certificate of origin costs $42. As concerns values exceeding $274,725, the legalisation is 0,4% of the merchandise value while the legalisation of the commercial contract costs $ 28. • Labelling Labelling in Arabic and English is recommended for products entering Qatar. Food containers must show the country of origin, the name and address of the exporter, the name and kind of commodity, the net weight of contents, date of packing (day, month and year), and the name and address of the consignee. ♦ Marking: All identifying marks including the consignee’s marks and port’s marks must be clearly inscribed on the packages to facilitate arrival of the shipment. Packages should be marked legibly. ♦ Packing: Goods should be packed securely to withstand rough handling and pilferage.

IV.4-FINANCIAL REGULATIONS OF FOREIGN TRADE OPERATIONS:

IV.4.1 Banking system:

As to December 31st, 1995, the Qatari banking system was composed of 14 branches: Qatari National Bank (QNB), 8 branches of Doha Bank Ltd, 6 branches of Qatar Islamic Bank, 7 branches of the Commercial Bank of Qatar Ltd, 3 branches of Al Ahli Bank of Qatar, 2 branches of the Qatar International Islamic Bank, 2 branches of the Arab Bank Ltd, 1 Branch of Bank Al Mashreq, 1 branch of Grindley Bank Ltd, I branch of the Standard Chartered Bank, 2 branches of the British Bank of the Middle East, I branch of Banque Paribas, I branch of Bank Saderat Iran, and branch of the United Bank Ltd. The Central Bank is called Qatar Central Bank.

IV.4.2. Exchange system:

The Qatar Monetary Agency (QMA) is the exchange authority. The value of Qatari Ryial is linked to the American dollar at a fixed rate of US$1= 3.6415 QR control since mid-1980.

6 ICDT’s Member States Business Guides

IV.4.3. Methods and means for international settlement:

There are no payments restrictions for authorised imports, and foreign exchange may be obtained freely from authorised banks. There are no maximum or minimum credit terms on import payments.

IV.5- CUSTOMS TAXATION:

IV.5.1 Applicable duties and taxes:

* Customs duties: the government maintains lists of goods subject to higher taxes to protect local industries and of goods exempted from duties. Steel imports are dutiable at 20 percent, those of alcohol and tobacco vary between 30 and 50%. Fifteen products are exempted from customs duties: live animals, poultry and birds, fresh fruit and vegetables, trees and roots, sowing seeds, food for cattle, natural fertilisers, Portland cement, raw sand, stones and clay, basic food products (rice, wheat, sugar, milk, flour, oil), printed matters, school books, propaganda and advertising articles, unworked gold and silver, natural pearls not originating in the Persian Gulf.

* Ad valorem duties: Qatar applies an ad valorem of about 4% on most imported products. * Preferential duties: Qatar is member of the Arab League Trade and Payments Agreement, which apply preferential tariffs among Member States. Preferential tariffs are also applied between Qatar and the GCC countries and the Commonwealth.

IV.5.2.Special provisions: Samples of no commercial value are imported duty-free. Customs inspectors are not required to accept the value of merchandise as declared on documents presented by the importer for assessing customs duties.

V. FOREIGN INVESTMENT

V.1 OPENNESS TO FOREIGN INVESTMENT

Prompted by declining rates of both production and price of oil, Qatar has resorted in recent years to various options to maintain an acceptable economic performance.

The Government of Qatar encourages foreign investment, particularly in joint ventures with Qatari partners. Wholly foreign owned firms are permitted to operate in Qatar, provided they have a local agent or a sponsor. However, there is a clear local hierarchy of privileges and preferences that favour Qatari firms and joint ventures with Qatari participation. Foreign-owned firms and the foreign owned portions of joint ventures are subject to corporate income tax, ranging from 5 percent to 35 percent of net profits. Qatari and Gulf Cooperation Council (GCC) nationals and business concerns are exempted from the income tax provisions. Qatar has yet to establish a personal income tax system.

7 ICDT’s Member States Business Guides

Foreign investors entering into a joint venture with Qatari partners are allowed to have only up to 49 percent of the business. The Qatari partner/s should have no less than 51 percent (Law No. 25 for the year 1990). Taken together, the above represents a formidable array of privileges and preferences, which can put a foreign investor at a severe disadvantage in the Qatari market. Despite stated fines and penalties, the practice of a Qatari illegally lending his name to a foreign-owned/operated business has been common, but on a reduced scale in recent years.

V.2 INCENTIVES OFFERED TO FOREIGN INVESTORS

Qatar offers up to ten to twelve years in tax holidays for foreign investors. Wholly foreign-owned firms are permitted to operate in the country. Companies that invest in Qatar's industries enjoy exemptions from taxes on income, electricity, water, and power facilities. Joint ventures involving foreign partners always take the form of limited liability partnerships.

The 1990 Law No. 25 makes it clear that foreign investors are not allowed to enter into a partnership in a joint stock company with Qatari firms. Foreign investors can have up own up to 49% ownership but the Qatari partner should have no less than 51%. Common practice has excluded foreigners from owning property or investing in privatised public services, but foreign investors have been allowed to own up to 25% stake in steel, fertilizers, and petrochemical industries.

Law No. 4 requires that a local agent or representative act as a sales channel for promoting products and services in the local market.

Foreign-owned firms and the foreign joint venture partners are subject to corporate income tax, ranging from 5% to 35%. Tariffs for the most part are relatively low; about 4% for a wide range of products. Exceptions include cigarettes and steel, which carry tariffs of 50% and 20% respectively.

Qatar was a member of GATT and is seeking entrance into the WTO.

V.3 INVESTMENT OPPORTUNITIES

Investment opportunities in Qatar are: liquefied natural gas, steel, health care projects, infrastructure (Ras Laffan industrial area), private small projects under consideration (pharmaceutical products, footwear, paper bags for cement and gypsum boards, amino resins, graphite electrodes, ceramic tiles, aluminium foil, sodium sulphate and government buildings (ministries).

VI .CONVERSION AND TRANFER POLICIES

In Qatar, there is no restriction on transfer of funds associated with an investment. Similarly, there are no limitations on the inflow or outflow of funds for remittances of profits, debt services, capital, capital gains and other returns. It is unlikely that Qatar will impose conversion or transfer

8 ICDT’s Member States Business Guides restrictions in the future. However, in case of commercial disputes, a court decision may tighten certain remittances.

Qatar's official currency, the Qatari Riyal (QR) is a floating currency. Due to little demand on the QR outside Qatar, the GOQ has pegged the QR exchange rate to the U.S. dollar (US$) but maintained a floating rate against all other currencies. The current rate is QR 1:00 for US$ 0.27 or US$ 1:00 for QR 3.65, as set by the GOQ in June 1980 and unchanged since then.

VII. FINANCIAL AND BANKING SYSTEM

Qatar's banking system is monitored by the Central Bank of Qatar (Qatar Central Bank). Fourteen banks operate in Qatar, six of which are Qatari; two are Arab (non-Qatari), and six are foreign-owned (British Bank of the Middle East, Banque of Paribas, Bank Saderat Iran, United Bank Ltd ).

The Central Bank handles redemption of the country's currency, controls monetary policy and monitors the banking system. The Central Bank is also responsible for regulating interest rates on Qatari riyal funds.

The majority of banking activity involves letters of credit and loans to private sector companies for government projects. Total assets of the banking sector are estimated to be $8 billion. Qatar's stock exchange is the smallest in the Gulf region with a capitalization under $2 million. The Qatar Monetary Agency (QMA) is the exchange authority.

VIII. INVESTMENT AGREEMENTS

Qatar recently became a member of the World Trade Organization (WTO). Earlier it participated in GATT as an observer.

It is a member of the GCC and as such, participates in the GCC's free trade arrangements, which provide duty-free access to all goods produced in the GCC states, provided that the goods meet the GCC's basic local content requirements (at least 40 percent value-added within the GCC in plants which are at least 51 percent owned by GCC nationals). The GCC states have yet to work on regional integration of matters such as external tariff, standardization of investment and industrial rules and regulations, and facilitation of intra-GCC travel.

Qatar has been engaged through the GCC in trade and investment negotiations with the United States, the European Community and Japan. Several aspects of the negotiations are yet to materialize. In addition to the GCC Economic Agreement (1983), Qatar signed economic/commercial agreements with and Tunisia in recent years.

While some slight progress has been made in carrying out the GCC economic agreement, there has been no real headway on any of the other above-mentioned agreements. Qatar has a Bilateral Investment Agreements Only with the United States.

9 ICDT’s Member States Business Guides

VIII. USEFUL ADDRESSES

Organisations and public Address Tel/Telex/Fax/ E-mail/ establishments website

Ministry of Foreign Affairs Post Office Box 250 Tel: + 974 415-000 Doha Fax: + 974 442-777 or 426 www.mofa.gov.qa Ministry of Finance, P. O. Box . 3322 Doha Tel : (974) 461444 Economy and commerce. Telex: 4488 ecom dh Economic Affairs Fax : (974) 431177 Department. Qatar Chamber of Commerce Airport Road P. O. Box. 402 Tel : (974) 621131 and Industry. Trade Doha Telex: 4078 tijara dh Information Section. Fax : (974) 622538 E-mail: [email protected] www.arab.net/qatar/business/ qr_commer.html Qatar Monetary Agency P. O. Box. 1234 Doha Tel : (974) 413456 Telex: 4335 Fax : (974) 413650

10