What Every Investor Should Know About Qatar
Senior Editor, CNBC
Business opportunities may be better
Some of the better investing opportunities may lie on the business side, analysts say.
"Qatar wants to diversify its economy as its oil reserves won't last forever," says Arti Sangar. "For that reason, the country is offering various business opportunities and incentives for foreign investment."
To create a better business atmosphere, Qatar has relaxed some of its more confining laws. Restrictions on non-citizens owning land in the country were eased in 2004 to spur real estate investing. Qatar also allows up to 100 percent of foreign ownership in agriculture, manufacturing, health and power projects—with approval from the Qatari government.
Those doing business in Qatar, analysts say, must understand the culture—with a legal system that combines both Islamic law and civil law codes.
"Contracts need to be in Arabic otherwise they are inadmissible in the courts of Qatar," says Sangar. "Religious holidays also have to be taken into account. Patience is also needed language barriers can delay completion of a deal."
Up to now, Qatar has managed to escape the political upheaval that's engulfed other parts of the Middle East. Experts say that's because the Emir has done a better job of using the huge economic wealth to help the country's poor.
But Qatari leaders are aware of the changing tide.
"So far the Emir has done okay with the population," says lawyer Timothy Pfister. "But a month ago, they announced that an international bank is no longer permitted to write business in both Islamic law for customers requiring that and commercial law for others. Was this a pre-emptive measure to stem violence? Who knows, but it could hurt business going forward."
In the end, say analysts, once investors find Qatar on the map, due diligence is essential.
"Qatar is unlikely to see disputes on the scale of other countries in the region," says Sangar. "But we are advising our clients in the area to be mindful of the need to protect their investments."
"Obviously, do your homework before investing," says Born. "If you can't find a local brokerage firm that you want to work with, I'd stick with ETFs. Investments in Qatar based firms should be just one part of a portfolio, not the whole thing."