HSBC Treasury Management Profiles 2018 -

Current section, Introduction

Introduction

Qatar's plentiful natural resources have made it the wealthiest country in the world with one of the highest per capita GDPs (USD124,927). Already the world's top exporter of liquefied natural gas, the country plans to increase liquefied natural gas production capacity by about 30 per cent over the next five to seven years, which will, according to the IMF, underpin the country's goal of 2.7 per cent GDP growth during 2019-23. As an energy dependent economy – petroleum and liquefied natural gas contribute about 55 per cent to GDP and account for 85 per cent of the emirate's exports – the sustained slump in oil prices has impacted on Qatar's economy. In 2016, the country posted a budget deficit of 9.2 per cent, this had narrowed to 6 per cent of GDP in 2017, and real GDP growth of 2.2 per cent (down from 3.6 per cent in 2015). GDP growth of 2.2 per cent is expected in 2017. In response, Qatar is pursuing a programme to bolster economic diversity, particularly through the construction and finance sectors, and deliver long-term economic stability. In its 2018 budget, for example, the government announced it expected to award QAR29 billion of contracts to support growth in the private sector. Special economic zones are also planned, which are expected to further stimulate diversification efforts and encourage foreign direct investment. Focus on the non-hydrocarbon part of the economy is also key to this strategy. This sector expanded 4 per cent in Q4 2017 and is forecast to grow 4.5 per cent in 2018, a figure that would make Qatar one of the region's best-performing economies.

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Legal and regulatory

  • Foreign exchange accounts can be held by residents both domestically and abroad. Resident domestic currency (QAR) accounts cannot be held abroad, but are freely convertible
  • Non-resident bank accounts are permitted in both foreign and domestic currency. Non-resident domestic currency accounts are freely convertible
  • All transactions between residents and non-residents must be reported to the central bank on a monthly basis
  • Qatar does not apply exchange controls

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Taxation

  • Wholly Qatari- or GCC-owned companies resident in Qatar are not required to pay tax
  • Non-residents are taxed on Qatari-sourced income only
  • A flat tax rate of 10 per cent applies, except for oil and gas companies, where a rate of 35 per cent applies
  • Qatar is part of the GCC VAT framework and a 5 per cent VAT is expected to be implemented in the near future

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Payment instruments and systems

  • Cash is an important payment medium in Qatar, particularly for low-value transactions. The cheque is commonly used for retail and commercial payments, although the use of electronic payment methods is increasing. The Wage Protection System mandates that the payment of all salaries in Qatar must be made directly into bank accounts. According to the government, an estimated 1.8 million people now receive their salaries electronically
  • Qatar operates three national payment systems: QPS, an RTGS system; the Electronic Cheque Clearing system; and QATCH, the deposit and direct debit system

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Cash management

  • Domestic and cross-border notional pooling and cash concentration is permitted between resident and non-resident accounts
  • Cash and account receivables collection services are available

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Electronic banking

  • Electronic banking is commonplace in Qatar. There is no bank-independent electronic banking standard
  • Internet and mobile banking services are provided by all of the country’s banks for both corporate and retail purposes. Adoption figures are high
  • The Ooredoo Mobile Money service is a popular mobile wallet service in Qatar
  • QPAY, the national payment gateway, facilitates secure online payments to various government and private institutions

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To read the full report on Qatar and to discover more on these and other topics, including banking and trade, please click on the Download PDF option.

Sources:

  • International Monetary Fund
  • Organisation for Economic Co-operation and Development
  • Ministry of Development Planning and Statistics
  • World Bank

The materials contained on this page were assembled in June 2017 (unless otherwise dated).

 

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