Population: 2.8 million

Wealth in domestic bank deposits: 271 billion USD (December 2023)

Offshore expatriated wealth: 27.3 billion USD

Main offshore banking locations: N/A

Number of individual brokerage accounts: N/A

Crypto adoption (% of population): 24,000 (0.9%)

TLDR

Qatar maintains a tightly regulated but open investment climate characterized by pegged exchange rates, free capital flows, and unrestricted profit repatriation. Strict financial controls aim to prevent illicit activities. Rules require licensing for investment banking activities and mandate disclosures to protect various investor categories. The country continues working to attract foreign capital through incentives while also supporting national economic priorities and local partners. Regulators like the Qatar Financial Markets Authority and Qatar Central Bank enforce robust oversight across banking, finance and securities sectors. Overall, Qatar strives for stability and transparency while encouraging foreign participation in its economy.

Exchange controls

Qatar has allowed free flow of foreign capital without restrictions since 2005, adhering to IMF Article VIII commitments. The Qatari Riyal maintains a fixed peg to the US Dollar instituted in 1980, currently at a rate of QAR 1.00 per $0.27. This reflects limited external demand for the Riyal and Qatar’s dependence on US dollar-denominated hydrocarbon revenues.

The Qatar Central Bank respects policies upholding banking sector stability. Foreign ownership limits exist for locally listed companies, currently at 49%, although pending legislation could enable full foreign ownership. Foreign investors may require local sponsorships or partnerships to access bank financing, which focuses on Qatari and development projects.

Qatar imposes no restrictions on payments and transfers for international transactions or foreign investment returns. Investment funds face no delays in remittances of returns from dividends, capital gains, debt payments, royalties, management fees or expropriation compensation.

However, to enable compliance with anti-money laundering and counterterrorism financing regulations, the Qatar Central Bank mandates that financial institutions apply due diligence measures around wire transfers above defined thresholds. While maintaining openness, these prudential restrictions uphold Qatar’s commitments to financial transparency and integrity.

Distribution rules for foreign investment products

The Qatar Financial Markets Authority (QFMA) regulates investment banking under the QFMA Law No. 8 of 2012. This includes oversight of securities listings, trading, clearing and settlement via the Qatar Stock Exchange. Companies publicly offering shares must obtain QFMA approval, submit a detailed securities prospectus and distribute this to investors in advance. Foreign products soliciting investments from Qatar-based investors require compliance as well.

While strictly regulated, licensing requirements for locally promoting foreign securities provides exemptions allowing offshore distribution and servicing of Qatari institutional and individual investors without needing an onshore presence. Rules intend to uphold market integrity for a robust investment ecosystem attractive to foreign capital.

The Qatar Central Bank (QCB) separately regulates the banking sector under the QCB Law No. 13 of 2012 and the Commercial Companies Law No. 11 of 2015. QCB licensing applies to locally undertaking financial activities. Foreign bank branches require local incorporation while Qatari banks listed on the stock exchange must float shares publicly.

Qualified investors

Qualified investors in Qatar’s capital markets are classified by financial sophistication and capability to assess complex securities independently, as per Qatar Financial Markets Authority (QFMA) regulations and Qatar Financial Centre (QFC) schemes.

These include licensed financial institutions like banks, insurers, asset managers and advisors. Government entities, sovereign wealth funds and their subsidiaries also qualify. Corporations with significant capital and unincorporated associations may participate in qualified investor schemes offered under the QFC.

Natural individuals requires three years of professional experience under QFMA or QFC jurisdiction. Other criteria include minimum 12-month securities trading volume of QAR 50 million or approved domestic or international financial certification. Wealth levels do not feature in definitions, which focus on expertise.

The rationale serves to distinguish retail investors with less information or capability to evaluate risks. Qualified investors can purchase units in schemes reserved only for informed institutions and individuals capable of making investment decisions. Retail participation would require additional consumer protections, disclosures and intermediation – avoided by segregating markets.

Cryptocurrency regulation

As of December 26th, 2020, the Qatar Financial Centre Regulatory Authority (QFCRA) banned all virtual asset services in the Qatar Financial Centre (QFC) except for digital asset services related to token securities. The QFC, a special jurisdiction within Qatar with its own legal, business, tax, and regulatory infrastructure, aims to attract businesses and promote financial growth. This ban specifically includes services related to the exchange or transfer of virtual assets, or the exchange between virtual assets and fiat currencies.

The rationale behind the ban stems from concerns over the use of cryptocurrencies for financing terrorism and money laundering. Exemptions to the ban include security tokens and other financial instruments regulated by the QFCRA, Qatar Central Bank, or the Qatar Financial Markets Authority, as they are subject to full Anti-Money Laundering (AML) and Know Your Customer (KYC) verification.