Identifier
Created
Classification
Origin
06DOHA51
2006-01-10 15:11:00
UNCLASSIFIED
Embassy Doha
Cable title:  

2006 INVESTMENT CLIMATE STATEMENT: QATAR

Tags:  EINV EFIN ELAB ENRG EPET QA KTBD OPIC USTR ECON 
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UNCLAS SECTION 01 OF 12 DOHA 000051 

SIPDIS

DEPARTMENT FOR NEA/ARPi, EB/IEP, EB/CBA, EB/IFD/OIA
INR/EC, NEA/RA, E
DEPARTMENT PLEASE PASS TO USDOE FOR GEORGE PERSON, JAMES
HART AND GINA ERICKSON
DEPARTMENT PLEASE ALSO PASS TO USTR-JBUNTIN
USDOC FOR 4520/ITA/MAC/OME-CLOUSTAUNAU
USDOC FOR 4520/ITA/MAC/ONE-MTALAAT
USDOC FOR 4520/ITA/HQ/USFCS/ RKREISSL
USDOC FOR 3131/USFCS/OIO/RD/ANESA

E.O. 12958:N/A
REF: STATE 202943
TAGS: EINV EFIN ELAB ENRG EPET QA ECO KTBD OPIC USTR
SUBJECT: 2006 INVESTMENT CLIMATE STATEMENT: QATAR

UNCLAS SECTION 01 OF 12 DOHA 000051

SIPDIS

DEPARTMENT FOR NEA/ARPi, EB/IEP, EB/CBA, EB/IFD/OIA
INR/EC, NEA/RA, E
DEPARTMENT PLEASE PASS TO USDOE FOR GEORGE PERSON, JAMES
HART AND GINA ERICKSON
DEPARTMENT PLEASE ALSO PASS TO USTR-JBUNTIN
USDOC FOR 4520/ITA/MAC/OME-CLOUSTAUNAU
USDOC FOR 4520/ITA/MAC/ONE-MTALAAT
USDOC FOR 4520/ITA/HQ/USFCS/ RKREISSL
USDOC FOR 3131/USFCS/OIO/RD/ANESA

E.O. 12958:N/A
REF: STATE 202943
TAGS: EINV EFIN ELAB ENRG EPET QA ECO KTBD OPIC USTR
SUBJECT: 2006 INVESTMENT CLIMATE STATEMENT: QATAR


1. This report serves as the 2006 Investment Climate
Statement for Qatar. It will be provided to assist U.S.
investors wishing to do business in Qatar.


2. Begin text of Investment Climate Statement.

A.1 Openness to Foreign Investment:

The government of Qatar, under the leadership of the Amir
Sheikh Hamad bin Khalifa Al-Thani, strongly encourages
international investment in Qatar. Qatar has attracted
more foreign investment during the last decade than it
did throughout the first two decades following
independence from Britain in 1971. The main economic
stimulus in Qatar is the development of its huge natural
gas reserves in the North Field, the largest non-
associated natural gas reservoir in the world. Qatar's
liquefied natural gas (LNG) industry has attracted
foreign investment worth nearly $ 70 billion. The oil and
gas industry will continue to be the most attractive
sector for foreign investors, as Qatar Petroleum expects
investments in upcoming projects will exceed $ 100
billion by 2010.

Law No. 13/2000 allows up to 100 percent ownership by
foreign investors in certain sectors, including
agriculture, industry, health, education, tourism,
development and exploitation of natural resources, energy
or mining upon approval by decree from the government. In
2004, Qatar enacted Law No. 31/2004 which allows foreign
investment in the banking and insurance sectors upon a
decision of the Cabinet of Ministers. The same law
stipulates that foreign investment is not allowed in
commercial agencies and trading in real estate.

When approving majority foreign ownership in a project,
Law No. 13/2000 states that the project should fit into

the country's development plans. Law No. 13 adds that
preference should be given to projects that use raw
materials available in the local market, manufacture
products for export, produce a new product or use of
advanced technology, facilitate the transfer of
technology and know-how in Qatar, and promote the
development of national human resources.

Judicial decisions in commercial disputes are primarily
based on contractual agreements, provided these
agreements are not in conflict with applicable Qatari
laws. U.S. firms are strongly encouraged to consult a
local attorney before concluding any commercial agreement
with a local entity.

In 2004, Qatar passed Law 17 which allows foreigners to
own residential property in select projects.
International firms interested in obtaining commercial
registration under the provisions of laws No. 13/2000 and
17/2004 should make an application to the Department of
Commercial Affairs at the Ministry of Economy and
Commerce. U.S. firms have received commercial
registration allowing 100 percent foreign ownership in
recent years.

The government of Qatar has embarked on a privatization
program designed to encourage and strengthen the Qatari
private sector. To date, this effort has focused on the
privatization of state-owned industries and corporations.
For example, in early 2003, 15 percent of the
government's shares in Qatar Petrochemical Company, Qatar
Fertilizer Company, Qatar Fuel Additives Company and
Qatar Steel Company were made available to Qatari
investors through an initial public offering. There are
no fully privatized companies in Qatar, but the
government does allow foreigners to own up-to 25 percent
of the capital of companies listed on the Doha Securities
Market. Foreign Investors are not allowed to participate
in any Initial Public Offering (IPO),only Qatari and
sometimes Gulf Co-Operation Council citizens have that
privilege. The privatization program has been conducted
through IPOs only.

In general, foreign investment is limited at 49 percent,
with the Qatari partner(s) holding at least 51 percent.
Noteworthy is that foreign firms continue to be required
to use a local agent for matters related to immigration
(sponsorship and residence of employees). Although there
is no income tax on salaries in Qatar, foreign investors
are subject to taxation on their income from investment.
Conversely, Qataris are not subject to any kind of
taxation, be it corporate or income. Only Qatari entities
can be issued an import license.

Certain sectors are not open for domestic or foreign
competition, including: public transportation, steel,
cement, fuel distribution, and telecommunications. In
these sectors, a single semi-public company has complete
or predominant control, and enjoys a de facto monopoly by
force of law.

Qatar has the fastest growing economy in the world.
Qatar's Gross Domestic Product (GDP) is expected to grow
by 29 percent in 2005, up from a very healthy 20.5
percent in 2004. High oil prices have increased the
country's cash flow and offered alternative options for
foreign investment. Foreign investment is highly
encouraged in sectors like high technology, where know-
how is paramount. The government of Qatar has adopted a
prudent policy, in its view, when it comes to investment
liberalization. This policy is based upon its desire to
protect the local public and private companies from the
arduous competition of wealthy and experienced foreign
companies.

A2. Conversion and transfer policies:

Qatar's official currency, the Qatari riyal (QR),is a
floating currency. Due to little demand for the riyal
outside Qatar and national economy's dependence on oil
and gas revenues, the government has pegged its exchange
rate to the U.S. dollar. The official rate is QR 1.00 for
$ 0.27 or $ 1.00 for QR 3.64, as set by the government in
June 1980. This was reaffirmed by an Amiri decree issued
July 9, 2001, as a step towards establishing a common
currency for the Gulf Cooperation Council (GCC)
countries, a decision agreed upon at a GCC Summit held in
Bahrain in December 2000 and expected to take effect in

2010. The government maintains a floating rate against
all other currencies, with the exception of four GCC
countries - Saudi Arabia, Oman, United Arab Emirates and
Bahrain - whose currencies are similarly pegged to the
dollar.

Qatar does not delay remittance of foreign investment
returns nor does it restrict transfer of funds associated
with an investment such as return on dividends, return of
capital, interest and principal payments on private
foreign debt, lease payments, royalties and management
fees. Similarly, there are no limitations on the inflow
or outflow of funds for remittances of profits, debt
services, capital, capital gains and other returns.
However, local as well as foreign contractors may
confront a delay of over three months in receiving their
amount due without interest. Normally, such a delay is
attributed to bureaucratic red tape. Foreign exchange is
available at all times through banks and branches and
exchange companies.

Article 9 of Law 13-2000 states the following: Foreign
Investors shall have the right to bank for all amounts
relevant to their investment from one to any external
destination without any delay. Transfers shall include:

- Investment revenues.
- Amounts generated from partial or entire sale or
liquidation investment.
- Amounts resulting from settlements of investments
disputes
- Compensation from expropriation


In accordance with government regulations to combat money
laundering and terrorist financing, all financial
transactions in excess of QR 100,000 ($ 27,472) must be
reported to Qatar Central Bank. Any repeated cash
transactions of QR 30,000 (approximately $10,000) or
higher made by an individual or entity must be
reported.Any transfer of funds into Qatar in excess of QR
100,000 must have valid documentation regarding the use
of these funds.

A3. Expropriation and compensation:

Law number 13-2000, Article 8 states: "1- Foreign
Investment shall either directly or indirectly be subject
to expropriation or any other similar procedures unless
such measures are for public welfare and implements in a
non-discriminating way, against a prompt and reasonable
compensation in accordance with legal procedures and
general principles stated in item 2 of this article."

It further states: "2- Compensation shall be equal to an
actual economic value expropriated investment at time of
expropriation or announcement of the same. Compensation
should be estimated in accordance with a normal economic
situation or precedent to any notification on
expropriation of investment. Compensation should be paid
with immediate effect and shall be transferable at any
time. Up to settlement of compensation, an interest shall
be calculated for the same in accordance with interest
rate prevailing in the State."

There have been no cases of expropriation or
sequestration of foreign investment in Qatar since the
nationalization in the mid-1970s of Shell and Dukhan
Services (the latter was a combination of six
international oil companies handling Qatar's onshore
operations on the country's West Coast.) The foreign
interests were compensated promptly and fairly, in an act
the government refers to as "negotiation," not
"nationalization" or "sequestration."

Ownership of real estate is limited to Qatari nationals,
except in designated real-estate development projects
such as The Pearl, West Bay Lagoon, and Al-Khor Resort.

A4. Dispute settlement:

Qatar is not a member of the International Center for the
Settlement of Investment Disputes (ICSID). In March 2003
Qatar became a signatory to the New York Convention of

1958. If and when investment disputes do occur, Qatar
accepts binding international arbitration between the
government and foreign investors. However, Qatari courts
do not enforce judgments of other courts in disputes
emanating from investment agreements made under the
jurisdiction of other nations. Since 2000, Qatar has
produced written laws covering a variety of investment
and commercial matters. However, Qatar does not have a
bankruptcy law - cultural norms prevent it. Currently
Qatari society finds it unacceptable to publicly announce
the bankruptcy of a Qatari citizen and/or a Qatari-owned
company. Such an act is considered to be a disgrace to
the person, his family, and the tribe to which he
belongs. Noteworthy is that the government of Qatar
sometimes plays the role of guarantor to keep the
bankrupt business running, and safeguard creditors'
rights.

U.S. firms are advised to consult with a Qatari or
foreign-based law firm when executing contracts with
local parties, in order to protect their own interests.
Contracts between local and foreign parties serve as the
basis for resolving any future commercial disputes. The
process of resolving disputes in the Qatari legal system
can be time-consuming.

A5. Performance requirements/incentives:

Performance requirements for foreign investment in Qatar,
including a counter-trade offset program, do not exist.
While screening investment proposals, the government may
indicate preferences for locating facilities, capital
investments and other matters. Disclosure of financial
and employment data is required but proprietary
information is not.
The government offers a variety of incentives to foreign
investors, which may include tax exemptions, property
grants, energy subsidies, and low-cost financing. The
following is a list of possible incentives offered to
foreign investors:

--Natural gas priced at $ 60-75 cents per MBTU (Million
British Thermal Units);
--Electricity offered at less than $ two cents per KWH
(Kilowatt Hour);
--Industrial land offered at $ 27 cents per square
meter per year for a period of 50 years including
options for renewing the lease;
--Exemption from customs duties on imports of
machinery, equipment and spare parts;
--Exemption on export duties;
--Exemption from corporate earnings taxes for five
years extendable to ten years;
--Exemption from income taxes;
--Absence of quotas on imports;
--Low cost financing through Qatar Industrial
Development Bank; and,
--Flexible immigration and employment rules to enable
import of foreign labor.

The same incentives are offered to Qatari investors.
Qataris are exempt from payment of corporate income tax.

Qatar does not maintain measures inconsistent with the
Agreement on Trade-Related Investment Measures (TRIMs).

The Ministry of Energy and Industry is the authority that
determines the amount of foreign equity and the extent of
the incentives for industrial projects. For logistical
reasons, industrial projects should be set-up in
designated industrial zones. For other types of
investments, there is no limitation on location.
Necessary investment approvals should be obtained from
the Public Health Authority, Qatar Tourism Authority,
Ministry of Municipal Affairs & Agriculture, Ministry o
Economy and Commerce, Supreme Education Council, and The
Supreme Council for Environment and Natural Reserves.

The Qatar Science and Technology Park, located in Doha's
modern Education City complex, offers U.S. and other
foreign investors a unique opportunity to start up a
research and development facility. Participating
companies are allowed 100 percent foreign ownership
commercial registration, and a 20-year exemption from
payment of income tax.

A6. Right to private ownership and establishment

The Commercial Companies Law, Law No. 5/2002 (replacing
Law No. 11/1981) controls the establishment of all
private business concerns in Qatar. The updated law
provides for corporate mergers, corporate bonds, and the
conversion of corporate partnerships into joint stock
companies.

Joint ventures involving foreign partners almost always
take the form of limited liability partnerships. Law No.
15/1990, which controls foreign investment in commercial
companies, does not allow foreign investors to enter into
a joint stock company with Qatari partners. Foreign
investors may own up to 49 percent, and the Qatari
partners no less than 51 percent, of a limited liability
concern. Foreign partners in ventures organized as
limited liability partnerships must pay the full amount
of their contribution to authorized capital in cash or in
kind, prior to the start of operations. Usually, such
firms are required to set aside 10 percent of profits
each year in a statutory reserve, until it equals 50
percent of the venture's authorized capital.
Foreigners are generally not allowed to own property or
invest in privatized public services. However, some
residential and commercial areas of Doha and corporate
stocks have been made available to foreign investors. On
July 4, 2004, the Amir issued Law No. 17/2004, allowing
foreigners to own some residential property in select
projects of the Pearl, the West Bay Lagoon and Al-Khor
resort.

Several state-owned companies in Qatar, such as Qatar
Telecom, Qatar Postal Corporation, and Qatar Airways,
dominate services activities, and still operate under
monopoly, or hold exclusive rights in some economic
sectors.

A7. Protection of property rights:

Within Qatar, owners of trademarks and copyrights and
holders of patents depend on Qatari laws and regulations
for protection. Intellectual property rights in Qatar are
protected by Law No. 7/2002 (Copyright and Neighboring
Rights Law) and Law No. 9/2002 (Trademarks and
Geographical Indicators Law). Qatar has adopted the GCC
Patent Law and created a GCC Patent Office. The Ministry
of Economy and Commerce is responsible for enforcing
these laws and other intellectual property rights
matters.

The Ministry of Public Health requires registration of
all pharmaceutical products imported into the country and
will not register unauthorized copies of products
patented in other countries.
Qatar is member of the World Trade Organization (WTO) and
the World Intellectual Property Organization (WIPO).
Qatar is a member of the following WIPO Treaties:

-- WIPO Convention, since September 1976.
-- Paris Convention (Industrial Property),since July

2000.
-- Berne Convention (Literary and Artistic Works),since
July 2000.
-- Nairobi Treaty (Olympic Symbol),since July 1983.
-- WCT (WIPO Copyright Treaty),since October 2005.
-- WPPT (WIPO Performances and Phonograms Treaty),since
October 2005.

Qatar is also Member and Signatory to the TRIPS
Agreement, since January 1996.

A8. Transparency of the regulatory system:

In Qatar, the government is the major buyer and end-user
of a wide range of products and services. Government
procurement regulations provide a ten percent preference
for Qatari bidders and five percent for GCC bidders.

The Central Tenders Committee (CTC) of the Ministry of
Finance is responsible for processing the majority of
public sector tenders. The CTC applies standard tendering
procedures and adheres to established performance norms.
It also sets the standards for rules and regulations for
bidding procedures.

Information on CTC tenders may be obtained from the CTC
office in Doha or on the Internet at
http://www.ctc.gov.qa. In tenders valued in excess of QR
100 million ($ 27 million),the CTC may invite and pre-
qualify international firms to bid for a specific product
or service. Technical bids submitted to the CTC are
referred to the appropriate government end-user for short-
listing. The CTC then opens the commercial bids and
recommends the lowest priced, technically qualified
bidder to the entity concerned, which will make the final
award decision. Inquiries about specific award decisions
should be directed to the CTC.

Some governmental entities have internal tender
committees. The Ministry of Energy and Industry, Qatar
Petroleum, Urban Planning and Development Authority, and
Public Woks Authority process all tenders independently.
Qatar Armed Forces and the Ministry of Interior are
responsible for issuing tenders for classified materials
and services.

Foreign firms wishing to participate in government
procurement programs may be required to have a local
agent and provide bid and performance bonds.
International bidders should contact end-users directly
for information on local agent requirements.

Other regulatory policies do not significantly affect
foreign investment decisions. The government continues to
strive to facilitate private investment (foreign and
national) in the Qatari economy.

The lack of transparency in Qatari government procurement
has become a growing issue. Some U.S. companies have
expressed concerns about the lack of transparency in
government procurement. The government of Qatar is aware
of these concerns and the United States will continue to
engage Qatar on this issue.

A9. Efficient capital markets and portfolio investment

In Qatar, there are no restrictions on the free flow of
capital.

Qatar Central Bank (QCB) adheres to conservative policies
aimed at maintaining steady economic growth and prudent
and responsible banking sector.

Loans are allocated on market terms, and foreign
companies are essentially treated the same as local
companies.

Qatar's banking sector assets were estimated at QR 117
billion ($ 32.2 billion) at the end of September 2005, up
43.11 percent from the prior year. Qatar National Bank
(QND),which is 50 percent state-owned, is the largest
bank in the country, with total assets of QR 39.4 billion
($ 10.82 billion) in 2004, up 96.7 percent from the prior
year. QNB assets continue to represent over 50 percent of
the total assets of all Qatari commercial banks. The QNB
Return on Average Equity increased from 12.6 percent in
2000 to 18.6 percent in 2004, while the efficiency ratio
improved from 28.3 percent in 2000 to 26.5 percent in

2004.

Almost all import transactions are controlled by standard
letters of credit (L/Cs) processed by local banks and
their correspondent banks in the exporting countries.
Credit facilities are provided to local and foreign
investors within the framework of standard international
banking practices. Foreign investors are usually required
to have a guarantee from their local sponsor/local equity
partner. However, in accordance with QCB guidelines,
banks operating in Qatar give priority to Qataris and to
public development projects in their financing
operations. Moreover, QCB prohibits banks from lending an
amount greater than seven percent of a bank's capital
base to any single customer.

In addition, the Qatar Central Bank does not allow "cross-
sharing" and "stable shareholder" arrangements among
banks and other business concerns that result in fewer
shares of some corporations actually trading freely in
the market.

The Doha Securities Market (DSM) is considered the second
most active stock market in the Middle East and North
Africa. The DSM index has grown from 6493 points in 2004
to 11,053 at the end of 2005, an increase of over 70.22
percent. In 2005, the DSM has attracted approximately $
28.25 billion in investment. DSM has benefited from
Qatar's current economic boom, low remuneration of bank
deposits, an excess of liquidity in the economy and
policies that foster an open economy attractive to the
private sector and foreign investment.

Qatar's current regulations allow foreigners to invest in
all DSM listed companies stock options. The total of
foreign investments cannot exceed 25 percent of the
capital of any listed company except Qatar Telecom and
Salam International Investment, where foreign investment
share may be higher. In May 2004, the Ministry of Economy
and Commerce issued the implementing regulations for the
Mutual Fund Law (Law. No 25/2002),which allows
expatriates to invest indirectly the stock market. No
bond loans have been traded on the DSM.

International credit rating companies have recognized
Qatar's management of its economy, banking and finance
sectors, and rewarded it with top grades. For example, in
2005, Standard and Poor's rated Qatar an "A+," credit
rating, Capital Intelligence rated Qatar an "A+," and
Moody's rated it an "A1."

A10. Political violence:

Qatar is politically stable. The crime rate is low. There
are no political parties, labor unions or trade
associations. There is no known organized domestic
political opposition. These facts combine to minimize
organized dissent.

With regard to possible terrorist attacks, the U.S.
government considers the potential for acts of
transnational terrorism to occur in Qatar as high.
Potential investors and U.S. citizens are encouraged to
stay in close contact with the Embassy for up-to-date
threat information.

A11. A. Corruption:

A bribe to an official or a foreign official in Qatar is
viewed as a crime. Law No. 14/1971 stipulates that a
government official who is convicted of corruption may
receive up to seven years' imprisonment. According to
Law No. 14, corruption should be investigated by the
Office of the Attorney General and Ministry of Interior's
Criminal Investigation Department. Final judgments are
made by the criminal court, which falls under the
Ministry of Justice. While normal punishment for
giving/taking a bribe is imprisonment of up to seven
years, the minimum is one year's imprisonment and/or a
fine worth QR 1,000 ($ 275).

The government of Qatar has begun a major initiative to
combat corruption in government procurement. Several
cases of alleged corruption at a variety of government
entities are currently under investigation or
adjudication. State-owned entities are increasingly
sensitive to appearances of corruption and are working to
establish more open and transparent processes.

Qatar is not a party to Organization for Economic
Cooperation and Development (OECD) Convention on
Combating Bribery of Foreign Public Officials.

Qatar is not a participant in regional anti-corruption
initiatives. No regional or local watchdog organization
operates in this country.

Corruption is often present in government procurement.
Lack of transparency, favoritism and political
connections are the major cause of the problem.

The Amir, the Heir Apparent, and Second Deputy Prime
Minister and Minister of Energy and Industry are the most
determined government officials in the battle against
corruption.

In 2005, Qatar is ranked 32 in Transparency
International's Corruption Perceptions Index and scores
5.9

U.S. investors are subject to the provisions of the U.S.
Foreign Corrupt Practices Act.
b. Bilateral Investment Agreements:
Over the past ten years, Qatar has signed bilateral
investment protection agreements with several countries,
including Belarus (2001),Bosnia and Herzegovina (1998),
China (1999),Croatia (2001),Cuba (2001),Finland
(2001),France (1996),Germany (1996),India (1999),Iran
(1999),South Korea (1999),Morocco(1999),Pakistan
(1999),Romania (1996),Senegal (1998),Sudan (1998),
Switzerland (2001),Turkey (2001).

On November 5th 2005, Qatar and Singapore signed a free
trade agreement (QSFTA). Both countries are still working
on finalizing the text of the agreement.

Qatar has not entered into a bilateral investment, trade
or taxation treaty with the U.S. However, Qatar and the
U.S. did sign a Trade and Investment Framework Agreement
(TIFA) in April 2004.

c. OPIC and other investment insurance programs:

Due to concerns about labor practices in Qatar, OPIC
suspended its operations in Qatar in 1995. However, Qatar
is working diligently to improve its labor standards in
order to reinstate OPIC coverage. In May 2004, Qatar
passed a new labor law which provides more rights and
protections for Qataris and non-Qataris.

Qatar has no plans to become a member of the Multilateral
Investment Guarantee Agency (MIGA).

d. Labor:

Qatar's labor force consists primarily of expatriate
workers, and their role in the economy is very important.
Qatar's current population is estimated at 860,000.
Qatari citizens are estimated to number only 180,000 -
less than a quarter of the total population. The largest
group of foreign workers comes from the Indian sub-
continent. Recently, the government has begun to
diversify the sources of expatriate labor, increasing the
percentage of workers from outside this region. The
Ministry of Interior and the Ministry of Civil Service
and Housing Affairs' Department of Labor regulate
recruitment of expatriate labor, but Qatar's plan to
develop its own manpower resources continues to receive
attention at all government levels.

In May 2004, Qatar passed a new labor law which allows
Qatari workers to right to strike, to form worker's
committees and to join international labor organizations
with ministerial approval. Strikes are forbidden in vital
industries including oil and gas, water and power,
transport, communications and hospitals. Under the new
law, all workers have the right to conduct collective
negotiations over all work-related issues through the
formation of joint committees with employers. Where
workers' committees exist, they will represent the
interest of all employees; in other cases, provided there
are 30 or more employees, they may directly elect
representatives.

Where joint committees cannot resolve disputes, they must
be submitted to the Labor Department in the Ministry of
Civil Service Affairs and Housing for mediation. If still
unresolved, they go to a "Committee of Settlement"
composed of representatives of the Ministry, employer and
employees. If still unresolved, disputes will then be
brought before an Arbitration Committee headed by a
judge, and composed of representatives of the Minister,
the Qatar Chamber of Commerce and Industry, and the Qatar
General Union of Workers.

All expatriate labor must have a Qatari sponsor.
Therefore, foreign investors are urged to negotiate labor
visa issues with their sponsors/local agents/partners in
the early stages of contract negotiation. The Ministry of
Interior and the current sponsor must approve all
transfers of sponsorship of an expatriate from one Qatari
national or firm to another. With the approval of the
Ministry of Interior, sponsorship of employees who filed
valid complaints of abuse by employers can be transferred
without the current employer's agreement. By law, an
expatriate hired locally is only entitled to two
sponsorship transfers during his/her residence in Qatar,
provided he/she is below 60 years of age. Expatriates
hired abroad are not allowed to change sponsorship. If
for any reason a residence permit is canceled, the
expatriate is not allowed to return to Qatar on a work
visa for a period of two years.

It is common practice in Qatar for expatriate workers to
be provided accommodation, end of service benefits and
homeward passage allowance, in addition to salaries.
Qatar does not have a minimum wage regulation. However,
the Labor Department has set minimum wages for domestic
helpers, drivers and construction workers. While salaries
and wages are negotiable, end of service benefits are
subject to three different laws.

Qatar is a member of the International Labor Organization
(ILO). Generally, labor experts believe that Qatar's
labor law does not meet ILO minimum requirements.

e. Foreign trade zones/Free ports:
In September 2005, Qatar issued Law No.36 that seeks to
permit the setting up of a duty-free Science and
Technology Park. Foreign individuals and companies will
be allowed to set up projects to do with research and
development (R&D) work, product development, technical
training and consultancy services in this free zone.

76. Foreign entities wishing to invest in this free zone
should apply for a license to the Park's managing board.
No other licensing rules prevalent in the country will
apply to the above businesses, although individuals will
be subject to the criminal and civil laws of the state.
Licensed foreign companies can enjoy 100 percent
ownership and full capital and income repatriation
benefits.
Law No. 36 also states that any business in the Science
and Technology Park will be exempt from all taxes,
including income tax. The property of such a business is
not to be seized under any circumstance, but capital and
other cash can be seized on the orders of a local court.
Equipment, machineries or any other goods being imported
for use by an entity doing business in the Science and
Technology Park will be exempt from customs duty, and
goods produced in the Park will not be subject to export
tax.
Goods being sold within the Qatar, but outside the Park,
will attract the normal customs duty that is applicable
to imported products.
Inflammable materials and those to do with radiation,
drugs and weapons as well as explosives are banned from
import by any of the licensed businesses.
Priority in employment would be given to Qatari
nationals. Resident expatriates will be able to join a
licensed company if there is no objection from the
Ministry of Interior. Conditions governing sponsorship
change, including nationality quotas, will not apply to
expatriates being recruited by a licensed company
provided there is no objection from the Ministry of
Interior.
The Ministry of Economy and Commerce conducted a study in
view of the establishment of Free Investment Zone (FIZ)
in Qatar. Those zones will be managed by a FIZ Regulatory
Authority. A tax holiday of 20 years is expected to be
given to all investors in the FIZ. All projects within
the FIZ will allow 100 percent foreign ownership. The
results of this study have not been made public yet, but
are expected early 2006.
f. Foreign direct investments statistics:

The government of Qatar does not publish detailed
statistics for foreign direct investment in Qatar or the
government's direct investments overseas.
In recent years, Qatar has attracted sizeable investments
in the areas of enhanced oil recovery and production, as
well as the development of Qatar's gas industry. During
the past ten years, QP and its partners have invested an
estimated $ 100 billion in upstream and downstream
operations. The development of Qatar's offshore natural
gas reserves in the North Field will continue to dominate
all other sectors in attracting foreign investors.
Qatar's gas industry has attracted investors/creditors
from the around the world. The U.S. firm ExxonMobil alone
has invested approximately $ 40 billion, in part as
equity shareholder in Qatar Liquefied Natural Gas Company
(Qatargas) (10 percent) and Ras Laffan Liquefied Natural
Gas Co. (RasGas) (26.5 percent).

Leading U.S. oil companies such as Occidental and
Anadarko are currently operating under production sharing
agreements for enhanced oil recovery/production. U.S.
investment in Qatar (mainly in the oil and gas sector) is
estimated to be $ 60-70 billion. Government officials
expect an additional approximately $ 70 billion will be
invested in Qatar's energy sector by 2010.

The following is a list of foreign equity participation
investors, U.S. firms included, in some major state-owned
industrial/petroleum related industries:

Petrochemicals

Qatar Fertilizer Company (QAFCO) is jointly owned
by Industries Qatar (IQ) (75percent),Yara Nederland BV
(15percent) and Fertilizer Holdings AS (10percent) - Year
established: 1969. Commencement of commercial production:

1974. Total Shareholders Equity end 2004 is $ 791.5
million.

Qatar Petrochemical Company (QAPCO) is jointly owned by
Industries Qatar (IQ) (80percent),Total Petrochemicals
(20percent) - Equity share capital: QR 360 million ($ 99
million) - Year established: 1975. Commencement of
commercial production: 1981- Total Shareholders Equity:
$777.5 million

Qatar Fuel Additives Company Ltd. (QAFAC) is jointly
owned by Industries Qatar (IQ) (50percent),Chinese
Petroleum Corporation (CPC) 20percent, Lee Chang Yung
Chemical Industry Corporation (LCYCIC) 15percent and
International Octane Limited 15percent.- Total capital QR
2.5 billion ($ 687 million. Year established: 1992. End-
users: Far East, India, Europe and Arabian Gulf.
Commencement of commercial production: 2001. Total
Shareholders Equity: Unknown

Qatar Vinyl Company (QVC) is jointly owned by
Shareholders are Qatar Petroleum (25.5percent),QAPCO
(31.9percent),Norsk Hydro (Norway) (29.7percent) and
Total Petrochemicals (formally Atofina) (France)
(12.9percent). Year established: 1996. End-users: Asian
countries. Commencement of commercial production: Mid-
2001Total Shareholders Equity: Unknown

Qatar Chemical Company (Q-Chem): Equity Share Capital:
Unknown. Shareholders: Qatar Petroleum (QP) 51 percent;
Chevron-Phillips Chemical Company (USA) 49 percent. Year
established: 1997. End-users: Asia, Europe, Middle East
and Africa. Commencement of commercial production: 2003.
Current value of foreign equity: Unknown.

Qatar Chemical Company II (Q-Chem II): Equity Share
Capital: Unknown. Shareholders: Qatar Petroleum 51
percent and ChevronPhillips 49 percent. Year Established:

2002. End-users: Local and international. Commencement of
commercial production: 2007. Current value of foreign
equity: Unknown.

Qatofin: Equity Share Capital: Unknown. Shareholders:
QAPCO 63 percent, Total Petrochemicals (formally Atofina)
36 percent and QP 1 percent. Year Established: 2002. End-
users: Asia and Europe. Commencement of commercial
production: 2007. Current value of foreign equity:
Unknown.

Ras Laffan Ethylene Cracker: Equity Share Capital:
Unknown. Shareholders: Q-Chem II 53.31 percent, Qatofin
45.69 percent and QP 1 percent. Year Established: 2002.
End-users: Domestic. Commencement of commercial
production: 2007. Current value of foreign equity:
Unknown.

Liquefied Natural Gas Projects

Qatar Liquefied Gas Company (Qatargas): Equity share
capital: QR 500 million ($ 137 million). Shareholders:
Upstream: Qatar Petroleum (QP) 65 percent, Total (France)
10 percent, Marubeni Corporation (Japan) and Mitsui and
Company Ltd. (Japan) 7.5 percent each and ExxonMobil Oil
(USA) 10 percent. Shareholders: Downstream: Qatar
Petroleum 65.0 percent, Totalfinaelf 20.0 percent,
Exxonmobil 10.0 percent, Mitsui 2.5 percent, Marubeni 2.5
percent. Year established: 1984. End-users of LNG:
Worldwide. Commencement of commercial production:
December 1996. Current value of foreign equity: Unknown.

Qatar Liquefied Gas Company (Qatargas) II (Qatargas II):
Equity share capital: Unknown. Shareholders: Qatar
Petroleum 70 percent and ExxonMobil 30 percent. Year
Established: 2002. End-users: U.K. Commencement of
commercial production: 2007. Current value of foreign
equity: Unknown.

Qatar Liquefied Gas Company (Qatargas) III (Qatargas
III): Equity Share Capital: $ 5 billion Shareholders:
Qatar Petroleum (QP) 70 percent and ConocoPhillips 30
percent. Year Established: 2003. End-users: USA
Commencement of commercial production: 2009. Current
value of foreign equity: Unknown.

Ras Laffan Liquefied Natural Gas Co. (RasGas): Equity
share capital: QR 7.28 billion ($ 2 billion).
Shareholders: Qatar Petroleum (QP) 63 percent, Mobil QM
Gas Inc. 25 percent, Itochu Corporation 4 percent, Nissho
Iwai Corporation 3 percent and KOGAS 5 percent. Year
established: 1993. End-users of LNG: South Korea 91
percent, Spain 6 percent and the U.S. 3 percent.
Commencement of commercial production: 1999. Current
value of foreign equity: Unknown.

Ras Laffan Liquefied Natural Gas Co. (RasGas) II (RasGas
II): Equity Share Capital: $ 550 million. Shareholders:
QP 70 percent and ExxonMobil 30 percent. Year
Established: 2001. End-users: India, Italy, Spain,
Taiwan. Commencement of commercial production: 2004
(Train 3). Current value of foreign equity: Unknown.

Ras Laffan Liquefied Natural Gas Co. (RasGas) III (RasGas
III): Equity Share: Unknown. Capital: $ 12-14 million.
Shareholders: QP 70 percent stake and ExxonMobil 30
percent. Year Established: 2003. End-users: USA
Commencement of commercial production: 2010. Current
value of foreign equity: Unknown.

Gas-To-Liquids Projects

Oryx GTL Project: Equity Share Capital: Unknown.
Shareholders: Qatar Petroleum 51 percent and Sasol 49
percent. Year Established: 2003. End-users: Singapore,
Japan and Europe. Commencement of commercial production:
2006 (revised from initial estimate of December 2006).
Current value of foreign equity: Unknown.

Other Oil and Gas-Based Industries

Gulf International Drilling: Equity Share Capital: $ 258
million. Shareholders: Qatar Petroleum 60 percent and JDC
40 percent. Year Established: 2004. End-users: TBD
Commencement of commercial operations: 2004. Current
value of foreign equity: Unknown.
Power & Utilities
Ras Laffan Independent Water and Power Project: Equity
Share Capital: $572 million. Shareholders: AES
Corporation 55 percent, Qatar Electricity and Water
Company 25 percent, Qatar Petroleum 10 percent and Gulf
Investment Corporation 10 percent. Year Established:

2001. End-users: Local. Commencement of commercial
production: 2004. Current value of foreign equity:
Unknown.

Q Power Company: Equity Share Capital: Unknown.
Shareholders: Qatar Electricity & Water Co. - 55 percent,
International Power Plc (UK) - 40 percent Chubu Electric
Power Company (Japan) 5 percent.


3. End text of Investment Climate Statement.
UNTERMEYER