Is it Really Safe to do Business in Qatar?

Hosting the largest and most significant football festival on Earth, Qatar is a name that’s become popular amongst everyone. But the upcoming FIFA 2022 is not the only reason why Qatar is popular. It’s also popular as a hot business destination. Finance, real estate, construction, etc., are some of the booming industries in Qatar. However, it has also been in the limelight for the wrong reasons too which we can’t ignore. So the question arises – Is it really Easy or Safe to do Business in Qatar?

In the recent headlines, a member of Qatar’s ruling Al-Thani family has refused to repay a $6 billion debt that was incurred in 2008. Here are some essential facts about this case:

• Sheikh Fahad bin Ahmad bin Mohammad bin Thani Al-Thani, a member of the Qatari Royal Family, controls a company, the ‘Fast Trading Group (FTG)’ for $5,996,390,356. ( Source )
• FTG entered into an agreement with the Swifthold Foundation for monetizing a $450 million bond creating a financial obligation.
• FTG was to pay $2 million right after the bond’s delivery, and weekly payments post the first payment.
• Swifthold foundation delivered the bond, and FTG absconded post-delivery. FTG went to the UK High Court in 2010 and got a judgment without substantial results.
• The judgment was changed to incriminate Sheikh Fahad after FTG was discovered to be a shell company in 2015. ( Source )
• During negotiations in late 2015, Fahad tried to negate the interest owed.
• The anonymous Rulers Court of Qatar, usually occupied by senior members of the Royal Family, ruled in favor of Sheikh Fahad, mentioning that no interest was payable.
• The court also directed Fahad to share a written settlement offer in early 2016, which never came through.
• Seeking resolution, Swifthold moved to the Dubai courts that have both UAE and Qatar as members in an effort to begin the enforcement process. They also went to the Qatar local courts in good faith without yielding any result.
• Since then, the Qatari Government and members of the Al-Thanis family have been lingering on the matter with hollow promises of a friendly and quick resolution to the matter.

This entire fiasco has dwindled the faith of the business community in Qatar as it continues to evade the rulings of the UK High courts.

So, is Qatar safe to conduct business?

Image Coutesy: expatica

Well, no matter how rich the country and the business policies are, such incidents always raise questions, especially when the countries’ royal families are concerned.

Yes, Qatar is putting tons of money globally into various business ventures. But, its refusal to abide by international trade rules is a cause of concern for many.

To understand whether Qatar is a safe place to conduct business or not, we have to look at both sides of the story. Let’s discuss the pros and cons of conducting business in Qatar below.

What are the pros of doing business in Qatar?

Qatar, irrespective of this incident, holds high esteem on the global trade stage. This is due to numerous other factors that are listed below.

1. You don’t have to pay income tax

The access to natural gas has allowed Qatar to be very rich, with the highest per capita income in the world. Since the economy is rich on its own, the government doesn’t collect taxes from the locals. Thus making it a favorable place to conduct business.

2. World-class and cutting-edge infrastructure

The ruling family of Qatar is pro-development. With more and more businesses and established brands, the infrastructure has developed recently. Moreover, it has seven ports, four airports, and 11,000 megawatts of power capacity, making it an attractive business location.

3. 100% business ownership rights to foreigners

Qatar laws (law number 10 of 2010) allow foreigners to have complete ownership of business ventures. This feature isn’t available in most top business destinations, making it a desirable location.

4. Open trade policy

The biggest USP of Qatar is its open trade policy. There are no trade restrictions, export duties, or bilateral taxation treaties with many countries.

All these factors, along with general business and economic conditions, make it a highly desirable business location.

What are the cons of doing business in Qatar?

As discussed above, the Qatar royal family reigns with an iron fist. Their family members are free to do as they like without any accountability to international laws and relationships.

This iron fist is undoubtedly one of the most significant drawbacks of conducting business in Qatar.

However, there are some other reasons that create doubt for all the new incomers to the Qatar business stage. Let’s look at some of those factors below.

–        Royal family supremacy

Whether it’s the enforcement of the law or the creation of it, the Qatar royal family has free reign to do whatsoever. The royal family autonomously occupies even the highest legal authority. They even have significant influence over the local courts. So, in case you get in conflict with the local government or the royal family, it’ll be daunting to get an unbiased outcome.

–        High initial investments

Since Qatar has become synonymous with luxury and big money, the cost of entering the Qatar business scene is also very high. You need to pay up large initial investment upfront, which makes it almost impossible for small businesses to enter this stage. Moreover, the local banks are not keen on lending to startups and new businesses, which makes finance challenging to obtain.

–        Limited access to human resources

Multinationals dominate the business domain in Qatar. While there is already a dearth of skilled employees, this competition from multinationals also increases the cost of human resources. This is also a primary reason why a lot of large businesses prefer to recruit from different countries and support their relocation.

–        Prolonged set-up process and red-tapism

Due to the unclear functioning of the legal bodies and the delayed process, it’s almost a necessity to hire PRO services if you want to establish a business in Qatar. Moreover, you’ll have to be patient and understand that legal formalities will take some time to complete.

Even further, you might encounter more challenges while you go on conducting your business in Qatar. However, it’s on you to understand if it suits your style or not!

Conclusion: Is it worth doing business in Qatar?

It’s needless to say, like a coin, there are two sides to everything. While doing business in Qatar can be financially yielding, it might also come with its challenge.

So, it’s important that you do your homework and understand the ground conditions before investing in Qatar. It’ll be better if you talk to the locals and establish contacts before you enter Qatar.

However, you’ve to find your answer to the question of whether it’s actually easy to do business in Qatar or not.

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