Qatar offshore banking and tax shelter center open

By Lena Liew

DOHA (Qatar), May 3 (Bernama) -- The Qatar Financial Centre (QFC) is now open for business, promising 100 percent foreign ownership of companies under its shelter, full repatriation of profits, and attractive tax breaks under regulations that supercede existing Qatari business laws.

The vision of the QFC is to become a vibrant hub of financial and professional services in a low-cost, low-risk environment, with minimal bureaucracy, said Minister of Economy and Commerce Sheikh Mohamed Ahmed Al Thani at the inauguration of the QFC by Prime Minister Sheikh Abdullah Khalifa Al Thani on May 1.

"We welcome international financial institutions and multinational corporations who have both the passion and commitment to realise the benefits of a long-term investment in a spirit of partnership with a forward-looking Qatar, which is developing and diversifying its economy from a position of strength," the minister said.

"We are one of the few countries to enjoy a fiscal surplus, an A+ stable sovereign risk rating and extremely high gross domestic product (GDP) growth. By aligning our goals with the international firms we seek to attract, we aim to create progressive partnerships whereby we enable firms to operate profitably in Qatar, in turn benefiting the country," he added.

Firms engaged in project financing, private wealth management, insurance of all types, Islamic finance and other investment, corporate and private banking activities are the target of the QFC.

They will get to enjoy a three-year tax holiday, after which a corporate tax rate of 10 percent will apply.

Although transactions between non-QFC companies in Qatar and QFC companies will still be subject to Qatari business laws, where QFC laws and local business laws conflict, the QFC laws will prevail.

The QFC will operate under two apex bodies - the QFC Regulatory Authority (QFCRA) and the QFC Authority (QFCA). There will be also be an Arbitration Body to adjudicate on disputes and appeals.

The QFCRA will grant licences to operate in the centre and oversee business conduct while the QFCA runs the centre and drives its commercial strategy.

Respected New Zealand-born regulator Philip Thorpe is the chairman and chief executive of the QFCRA.

Thorpe, who reports directly to the Qatari Cabinet, was less than a year ago sacked from the same position in the Dubai International Financial Centre (DIFC) following his objection to a controversial land deal involving key officials of the DIFC.

Unlike the Dubai International Financial Centre, which aims to be the regional hub for offshore financial professionals, and the Bahrain Financial Centre, which touts its credentials as a haven for Islamic banking and finance, the QFC appears to be less a new revenue source for Qatar and more an institution to enhance the operational efficiency of the tiny Gulf state's booming economy.

-- BERNAMA