Qatar is a country with a dynamically developing economy, based on the export of hydrocarbons. It has one of the world’s highest GDP per capita thanks to high oil and gas prices. Being a member of the Gulf Cooperation Council (GCC), the state has access to a market with a population of over 50 million people.
For those who want to do business in Qatar, it is essential to understand the basic principles and trends of the country’s economy. This will help them make informed decisions and successfully develop their business.
The Economy of Qatar in Figures
| Gross Domestic Product (GDP) | Nominal: $344.4 billion (2023) Purchasing Power Parity (PPP): $411.4 billion (2023) Growth Rate: 4.4% (2023) |
|---|---|
| GDP per Capita | Nominal: $127,144 (2023) PPP: $152,445 (2023) |
| GDP Structure | Oil and Gas Industry: 55% Services: 45% |
| Exports | Value: $105.4 billion (2023) Main Goods: liquefied natural gas (LNG), oil, chemical products |
| Imports | Value: $54.7 billion (2023) Main Goods: machinery and equipment, vehicles, food |
| Government Budget | Revenue: $114.3 billion (2023) Expenditure: $106.3 billion (2023) Surplus: $8 billion (2023) |
| Inflation | Rate: 2.2% (2023) |
| Unemployment | Rate: 0.4% (2023) |
| Credit Ratings | Aa2 (Moody’s) AA+ (S&P Global) AA (Fitch Ratings) |
| Membership in International Organizations | OPEC WTO IMF |
What Are the Reasons for the Success of Qatar’s Economy
Over the past few decades, the country has achieved impressive economic indicators, transforming from a poor state into a prosperous nation.
What factors have contributed to this success?
- Abundant natural resources: The country possesses the world’s third-largest reserves of natural gas and is one of the largest exporters of liquefied natural gas (LNG). Revenues from the sale of oil and gas form the basis of Qatar’s national economy.
- Wise economic policy: The government implements a forward-thinking economic policy aimed at diversifying the economy, reducing dependence on hydrocarbon exports, and developing human capital.
- Favorable business environment: The state has created an attractive climate for foreign investors by offering low taxes, political stability, and advanced infrastructure.
- Strategic location: The country is at the crossroads of trade routes between Europe, Asia, and Africa, making it an important transit hub.
- Active investment activity: Qatar actively invests funds in various sectors of the economy, both domestically and internationally. Additionally, several free economic zones offer investors favorable tax conditions.
- Hosting major international events: Qatar is a center for international events, promoting tourism and business development.
As a result of the combination of these factors, the country has achieved impressive success in economic development. It continues to develop, creating new opportunities for business and investments.
In addition to the abovementioned factors, it is also worth noting:
- Political stability: The state is a monarchy with a stable political system, providing long-term business predictability.
- High standard of living: The government ensures its citizens a high standard of living, contributing to social stability and progressive development.
Overall, Qatar is a vivid example of how sound economic policy, utilization of natural resources, and a favorable business environment can lead to sustainable and long-term growth.
Overview of Qatar’s Major Economic Sectors
Qatar’s economy is based on the extraction and export of hydrocarbons, primarily oil and natural gas. However, the country’s government has actively diversified and developed other sectors in recent years.
The main sectors of the economy are as follows:
- Oil and gas industry: It is the dominant sector, accounting for about 55% of GDP. Qatar is one of the world’s largest exporters of liquefied natural gas.
- Services: Constitute about 45% of Qatar’s GDP. They include finance, insurance, real estate, tourism, transportation, telecommunications, etc. 3. Construction is considered one of the economy’s fastest-growing sectors. It is developing due to the implementation of major infrastructure projects.
- Manufacturing: The manufacturing sector is relatively small but gradually developing. Production of chemicals, fertilizers, steel, aluminum, cement, etc., is established.
- Agriculture: Plays a minor role. The country imports most of its food.
The government of Qatar is taking several measures to diversify and reduce dependence on hydrocarbon exports. These measures include:
- Development of manufacturing industry: Industrial zones are being created, and incentives are provided to foreign investors wishing to establish production in the country.
- Development of tourism: Qatar positions itself as a tourist center and invests in developing corresponding infrastructure.
In addition to the main sectors, Qatar is also developing sectors such as
- Information technology. The country aims to become a regional IT hub.
- Renewable energy: The government is investing in developing renewable energy sources to reduce dependence on fossil fuels.
- Sports: Qatar positions itself as a sports center and actively invests in sports development.
Considering the above, it can be stated that in the long term, the country will be one of the leading economic centers in the Middle East.
Qatar’s Role in the Global Economy
Despite its relatively small territory, Qatar plays a significant role in the global economy due to its abundant energy resources, strategic location, and active investment attraction policy.
Energy Sector
Thanks to its vast natural resource reserves, Qatar plays a vital role in the global energy market, ensuring energy security for many countries. For example, in 2023, LNG exports increased by 10%, making Qatar the leader in gas supplies to Europe. This, in turn, helped the EU diversify its energy sources.
Infrastructure and Transport Corridors
Qatar actively invests in developing its infrastructure, including ports, airports, and transportation networks. Due to its strategically advantageous location in the Persian Gulf, the country has become an important transportation hub, providing access to markets in Asia, Europe, and Africa.
Investments and Diversification
The state actively invests in various sectors of the global economy (real estate, finance, tourism, and technology). Therefore, while Qatar’s economy traditionally relies on the energy sector, the nation is now forging pathways for fresh avenues of growth and advancement.
Geopolitical Significance
In the geopolitical architecture of the region and global politics, the country also occupies a prominent place. Qatar actively seeks to develop diplomatic relations and participates actively in international projects and initiatives. For example, Qatar played a crucial role in the peace talks between the US and the Taliban, leading to the withdrawal of US troops from Afghanistan in 2021. In 2022, while maintaining neutrality, the state acted as a mediator in exchanging prisoners between Ukraine and Russia, providing an aircraft and ensuring security.
We forecast that Qatar’s influence on the global economy will continue to grow due to its essential role as an LNG exporter, an investment hub, and a mediator in resolving international conflicts. Thanks to its active foreign policy, the country will play an increasingly active role in addressing international issues, enhancing its influence on the world stage.
Attracting New Foreign Investments in Qatar
Qatar actively seeks new foreign investments to diversify its economy, reduce dependence on hydrocarbon exports, and create new job opportunities.
To achieve this, the government:
- Creates a favorable investment environment by reducing taxes. 2023, the corporate income tax was lowered from 10% to 8%.
- Simplifies business regulations. Qatar ranked 77th in the Doing Business 2023 report, rising 2 spots compared to 2022.
- Provides investment incentives: the Qatar Financial Centre (QFC) offers favorable tax regimes and a simple registration system and attracts a highly skilled workforce.
- the state also participates in various international economic forums, such as the World Economic Forum in Davos, to promote its investment opportunities.
As a result of these measures, Qatar attracted $33.8 billion in foreign direct investments in 2023, ranking 29th in the Global Competitiveness Index 2023.
Where to Begin Creating Your Business in Qatar
Starting your business in Qatar may seem daunting. Still, it can become manageable with careful preparation and knowledgeable guidance.
Here are several steps to consider:
- Choose the legal structure: Limited Liability Company (LLC) is the most common form for foreigners.
- Register your company: Submit an application to the Ministry of Economy and Commerce through the Qatari Business Portal and provide necessary documents (articles of association, memorandum of association, copy of passport, business plan). Then, proceed with the payment of registration fees.
- Obtain licenses for regulated activities from the Ministry of Economy and Commerce.
- Open a bank account.
- Choose an office space: Renting an office is mandatory for conducting business.
- Hire employees: There may be quotas for Qatari employees in specific industries.
We recommend thoroughly studying the legislation and business practices or entrusting professionals. Dynasty Business Adviser is a team of experienced specialists ready to provide comprehensive support in opening and running a business in Qatar.
Advantages of Collaborating with Dynasty Business Adviser
The experts at Dynasty Business Adviser possess extensive experience in the local Qatar market, enabling us to offer the most influential business development strategies and provide top-notch business consulting services.
We have in-depth knowledge of all the intricacies and nuances of local legislation and business requirements.
In our work, we focus on the needs and goals of each client, offering personalized solutions.
The company has broad business connections and partnership relations in Qatar, facilitating rapid resource acquisition and establishing business contacts.
We guarantee the confidentiality of your information and have an impeccable reputation, as evidenced by numerous testimonials from satisfied clients.
Important Note: The information in this article is not legal advice. For professional clarifications regarding the opening and operation of a business in Qatar, we recommend consulting with the managers of Dynasty Business Adviser.
