Asset management is emerging from the severe shock of the global financial crisis. But the indebtedness of individuals and banks in some parts of the developed world has now turned into sovereign debt challenges and economic growth has stagnated.
Accordingly, investment managers in mature markets are increasingly interested in investing in – and gaining greater proximity to – emerging markets such as the GCC as a way of augmenting yield and diversifying away from traditional geographies.
As a location, Qatar has several powerful advantages and there has never been a better time for asset managers to take advantage of direct and easy access to the compelling Qatar growth story.
Crucially, Qatar has a world-class tax, regulatory, legal and business environment offering investors a legal system based on English common law. The independent QFC Regulatory Authority provides a principles-based regime following international best practice.
The QFC Tribunal, another independent entity, hears appeals against decisions on QFC entities such as the QFC Regulatory Authority. Qatar’s tax regime is attractive. The tax rate for QFC licensed firms is 10% on profits made in Qatar and there are no capital, personal or social taxes. And the recent World Economic Forum World Competitiveness Report ranked Qatar eleventh in the world – the highest in the MENA region.
All this provides clarity and certainty, highly valuable commodities in these turbulent times. A business looking to establish itself within the QFC environment – whether it is Qatari or foreign – knows exactly where it stands.
Qatar itself is the fastest growing economy in a fast-growing region. It enjoyed on average double-digit growth rates for a decade up to 2011 and has a savings rates of about 49% - well above the Gulf average and around twice the world average. The country also has one of the highest per capita incomes in the world and one of the highest proportions of millionaire households.
“We are aiming for a fertile mix of international, regional and local firms which will cement the QFC Authority’s standing as an international financial centre.”
The QFC has a mandate to help the development of the whole of Qatar’s financial sector. It provides firms with a platform to access local and regional investment opportunities and conduct business in the region. Qatar is strategically well positioned between the mature markets of the west and the fast-growing economies of the east and has Africa almost on its doorstep.
Our priority is to increase the volume of business conducted in Qatar. This includes increasing the amount of business done both by Qatari firms and attracting more international firms to the country. The key measure of our progress will be the total amount and quality of business transacted by firms on the ground.
Earlier this year Barclays Natural Resource Investments announced that it would run its global portfolio from the QFC. Credit Suisse has announced that it is relocating investment banking jobs from Dubai to Doha. And Q-Invest is set to merge with EFG-Hermes and expand its asset management business out of Qatar.
Financial services help the diversification away from excessive dependence on hydrocarbons which the National Vision 2030 maps out. The financial services sector is expanding rapidly in size and sophistication. The finance, insurance, real estate and business services sector now contributes about 10% of Qatar’s GDP – one of the biggest sectors after hydrocarbons.
And our financial services sector is supporting the considerable scale and pace of change throughout the country, providing a conduit for wealth to be efficiently and effectively allocated to the many projects requiring capital.
Development of the financial services sector and asset management industry in Qatar is being stimulated by clear and certain regulation to stay at the leading edge of global best practice; by opening up business channels with other leading financial centres around the world; through Qatar Exchange continuing to work hard to improve the Qatari stock market’s liquidity, accessibility and efficiency; by greater retail investor education; and by continually communicating the attractions of Qatar through conferences and other marketing initiatives.
Opportunities for asset managers are also arising from Qatar’s massive investment in infrastructure. Projects worth over $200bn are due to be completed in the next ten years. The government would like to see private sector involvement in these projects.
We are aiming for a fertile mix of international, regional and local firms which will cement the QFC Authority’s standing as an international financial centre and will also stimulate the further development of Qatari firms and the Qatari economy.