Qatar Commentary
As part of its effort to diversify its economy away from a reliance on petroleum, the State of Qatar has initiated numerous market liberalisation programmes to make foreign investment into the country more attractive. While these programmes were at various stages of implementation, the imposition of the blockade by some neighbouring countries has ultimately driven home the importance of creating more opportunities for foreign investment and put these programmes on the fast track. Additionally, with construction on the infrastructure for the FIFA World Cup 2022 continuing apace, most of the roads, metro and stadia infrastructure is nearing completion. As a result, Qatar’s economy has largely recovered from the blockade’s effects thanks to a number of recent developments.
The cornerstone of Qatar’s foreign investment legislation is Law No. 1 of 2019 (‘Foreign Investment Law’). Previously, the amount of permissible foreign shareholding was 49% of the shares in a limited liability company (unless permission for a higher shareholding has been granted by the Ministry of Commerce and Industry). The Foreign Investment Law no longer limits such higher share ownership to companies operating in a limited number of sectors. A foreign shareholder may now own more than 49% in a commercial company operating in any sector (with the exception that an LLC may not engage in banking or insurance business, and foreigners are prohibited from acting as commercial agents). However, we expect that obtaining special dispensation for a higher shareholding by foreigners will be easier under the new law. Further, participating in real estate trading is no longer prohibited to foreigners.
