Foreign Direct Investment

Global foreign direct investment (FDI) flows showed a strong rebound in 2021, up 77% to an estimated USD 1.65 trillion, from 929 billion in 2020, surpassing their pre-COVID19 level. FDI flows in developing countries increased by 30% but almost three quarters of the total increase in global FDI (USD 500 billion) was recorder in developed economies, with developing economies showing a more modest recovery growth. FDI inflows to West Asia and the middle East increased by more than 49% in 2021 to 90 billion USD (UNCTAD, January 2022).

Foreign direct investment flows into Qatar have generally followed an upward trend in the past several years, thanks to the country's political stability, a stable currency pegged to the U.S. dollar, high-quality infrastructure and one of the lowest corporate tax rates in the world (10%). However, following the diplomatic crisis with countries such as Saudi Arabia, the UAE and Kuwait, the Qatari economy experienced a negative impact. This was compounded by the global economic crisis triggered by the Covid-19 pandemic. According to UNCTAD 2021 World Investment Report, FDI flows were negative by a total of USD - 2.4 billion in 2020, up slightly from USD -2.8 billion in 2019. The total stock of FDI stood at USD 28.6 billion in 2020. However, Qatar is also a key international investor, thanks to its large foreign exchange reserves. The largest contributors to FDI inflows are the US, Japan, South Korea and Singapore, while the main sectors attracting foreign investment are oil and gas, construction, public works and financial services.

Qatar Foreign Direct Investment (FDI) increased by 8.2 MILLION USD in The September 2021 quarter, compared with a drop of 57.1 million USD in the previous quarter (CEIC, 2022).

Qatar aims to become a leading country in terms of its business and foreign investment environment. In May 2018, the government approved a draft law that allows non-Qatari investors to own 100% capital in all sectors, while many Qatar Stock Exchange listed companies have increased their foreign ownership limit to 49%. The organisation of the 2022 World Cup in Qatar is expected to attract large amounts of foreign investors in the coming years. However, one element that limits the expansion of FDI flows into Qatar concerns its policies governing the private sector, especially due to the long amount of time it took to establish a privatisation programme. Other elements that hinder FDI are the country's relatively small domestic market, a lack of a skilled workforce and high cost of living, and the current diplomatic and commercial relations with other Arab countries. The public-private partnership programme launched recently is expected to improve the situation. Qatar ranked 77th out of 190 economies in the last World Bank's 2020 Doing Business report, up by six spots compared with a year earlier. The rise was mainly due to a significant improvement with regards to registering property. The close relations between Qatar and Turkey have resulted in strong Foreign Direct Investment (FDI) flows between the two countries.