Legislative Foundation
Law No. 1 of 2019 on Regulating the Investment of Non-Qatari Capital in Economic Activity — commonly known as the Foreign Investment Law — represents the most significant structural reform to Qatar’s investment framework since the establishment of the Qatar Financial Centre in 2005. The law replaced the previous Foreign Capital Investment Law (Law No. 13 of 2000), which had capped foreign ownership of onshore companies at 49 percent and required Qatari majority participation in most commercial ventures.
The 2019 law permits non-Qatari investors to hold up to 100 percent of the capital of a company incorporated in Qatar, subject to Cabinet approval and compliance with applicable sector restrictions. This reform aligned Qatar with regional peers — notably the United Arab Emirates, which enacted similar changes to its Commercial Companies Law around the same period.
Scope and Application
The Foreign Investment Law applies to all forms of non-Qatari capital deployed in economic activity within Qatar, including direct investment in new enterprises, acquisition of existing businesses, participation in public-private partnerships, and portfolio investment in listed securities. The law covers both natural persons and legal entities.
Investment under the law may take several forms: establishment of a new company (wholly or partially owned by foreign capital), acquisition of shares in an existing Qatari company, participation in joint ventures, or investment through branches and representative offices.
Strategic Sector Restrictions
While the headline provision permits full foreign ownership, certain sectors remain subject to partial or full restriction. The Cabinet retains authority to designate sectors where foreign participation is limited or prohibited. Historically, these have included banking and insurance (where the Qatar Central Bank exercises supervisory discretion), real estate outside designated freehold areas, and commercial agency activities.
The precise list of restricted sectors is determined by Cabinet decision and may be updated periodically. Investors targeting sectors adjacent to strategic industries — defence, hydrocarbons upstream, and certain utilities — should expect enhanced scrutiny during the approval process.
Approval Process
Foreign investors seeking to establish or acquire a business under the law must apply to the Ministry of Commerce and Industry. The application is assessed against several criteria, including alignment with national development priorities, job creation potential, technology transfer, and contribution to the non-hydrocarbon economy.
The Ministry may refer applications to the relevant sector regulator for technical assessment. For investments in the Qatar Financial Centre or free zones administered by the Qatar Free Zones Authority, separate licensing procedures apply under those entities’ own regulatory frameworks.
Cabinet approval is required for investments seeking ownership levels above the thresholds prescribed by sector-specific regulation. Processing timelines vary, but Qatar has invested in streamlining approval workflows as part of its broader business environment reform agenda.
Incentives and Protections
The Foreign Investment Law codifies several protections and incentives for non-Qatari investors:
- Non-expropriation guarantee. Foreign investments may not be confiscated or nationalised except in the public interest, and only pursuant to due legal process with fair compensation.
- Profit repatriation. Investors are entitled to transfer profits, dividends, and capital proceeds outside Qatar without restriction, subject to applicable tax obligations.
- Tax incentives. The law empowers the relevant authorities to grant exemptions from customs duties on imported equipment and raw materials, as well as income tax holidays for qualifying projects.
- Equal treatment. Non-Qatari investors are entitled to treatment no less favourable than that accorded to Qatari investors in comparable circumstances, though certain preferential procurement provisions for national companies may apply.
Qatar is also a signatory to numerous bilateral investment treaties and is a member of the Multilateral Investment Guarantee Agency (MIGA), providing additional layers of investor protection.
Interaction with Other Frameworks
The Foreign Investment Law operates alongside — rather than replacing — the regulatory frameworks of the Qatar Financial Centre and the Qatar Free Zones Authority. Investors entering Qatar through the QFC or QFZA benefit from their own ownership, tax, and governance regimes, which in some cases provide more favourable terms than the onshore framework.
For onshore companies, the Foreign Investment Law must be read in conjunction with the Commercial Companies Law (Law No. 11 of 2015), which governs corporate formation, governance, and dissolution.
Strategic Context
The enactment of the Foreign Investment Law was not an isolated reform. It formed part of a coordinated strategy to diversify the Qatari economy away from hydrocarbon dependence, attract foreign capital and expertise, and enhance Qatar’s competitiveness in global FDI rankings. Coming in the wake of the GCC blockade (2017-2021), the law also served as a signal of economic openness and resilience during a period of regional geopolitical tension.
Since its implementation, Qatar has recorded notable increases in foreign direct investment, particularly in technology, financial services, manufacturing, and professional services — sectors explicitly prioritised under the National Vision 2030.