Q&A: Qatar is Open for Business

The business opportunities and current economic climate in Qatar are outlined for MEI readers in a Q&A with Alaa Shadid, business development manager, Grant Thornton Al Eid & Co. 
 
Please outline your role and responsibilities at Grant Thornton
 
"My primary responsibilities as a business development manager at Grant Thornton- Qatar revolve around a) identifying future business opportunities b) assessing, deconstructing, carefully studying and screening these ideas/opportunities for viability once they have been generated and executing them should they be feasible c) carefully evaluating, researching and studying current market trends and industry analysis and, d) building new and existing client relationships, while creating a platform for the client and 
shining a light on Grant Thornton's areas of expertise." 
 
What services does Grant Thornton offer in Qatar?
 
"Grant Thornton - Al Eid & Co is one of the most well-known and respected firms in Qatar offering auditing, taxation and consulting services. It provides a full range of audit and accounting services in accordance with international standards, and is committed to giving its clients value for money, providing them, whenever possible with commercially minded assistance advice in addition to meeting its obligation to its clients and to the outside world as an independent auditor. Grant Thornton - Qatar advises on tax planning compliance with tax legislation including advice on the most effective corporate structures and procedures to adopt in establishing a business in Qatar.
 
Our advisory services in the Middle East include business risk services, transaction services, corporate finance, tourism hospitality and leisure, forensic accounting, IT advisory, intellectual property right, budgeting, cash flow-projection, corporate reorganisation, cost allocation studies, financial analysis and planning, forecasts and projections, internal control reviews, liquidation and bankruptcies, management hiring, personal financial planning, return on investment planning and strategic planning etc.
 
Grant Thornton is all about serving dynamic companies - companies that are developing new products, expanding in the global marketplace, taking advantage of technology and coping with a myriad of issues. Grant Thornton is represented in more than 100 countries with a total member firm personnel of over 31,000 and a combined total revenue of roughly $4bn." 
 
What does Qatar have to offer UK-based or other overseas investors?
 
"Qatar is categorically and unequivocally a major economic force and a true magnet for concrete investment due to its outstanding economic performance given the continued global economic uncertainty. Qatar's economic GDP growth for 2011 was 14.1% and is the highest per capita income in the world expected to reach slightly above $110,000 by 2016.
 
Qatar's successful bid to host the FIFA World Cup in 2022 opens doors to tremendous investment opportunities. The government of Qatar has allocated 40% of its budget between now and 2016 to fund large mega infrastructure projects. Some of these projects include $50bn for developing new rail and metro systems, $33bn for developing Lusail City, $20bn on roads, $4bn on stadiums, $48bn will be spent to build air conditioned stadia, $77bn dollar on facilities for soccer fans, $5.5bn for a deepwater seaport, and a massive world class airport (one of the largest in the world) costing $17.5bn. 
 
According to a study by Oxford Economics and Global Construction Perspectives, the Qatari construction market is expected to grow by an average of 12.5% a year over the next decade, compared with growth in European countries averaging just 1.7% to 2020.
 
Meanwhile, Qatar's transportation sector is the biggest beneficiary of the massive investment by the government, as it plays not only a major role, but a pivotal in the development of the social infrastructure of the country. The tourism authority of Qatar has orchestrated and organised many events, conferences and exhibitions, raising Qatar's profile regionally. This has resulted in tourists paying Qatar a visit, thereby boosting the hotel sector. Qatar also provides ample opportunities for investors in the construction/real 
estate sector." 
 
What sectors are doing well at the moment in the country?
 
"Petroleum is the cornerstone of Qatar's economy and accounts for more than 70% of total government revenue, more than 60% of gross domestic product, and roughly 85% of export earnings. 
 
The construction industry has witnessed a tremendous boom in the past few years, and will continue to grow in spite of the global financial crisis. The indicators of the construction sector are solid at the present time with many huge construction projects currently in the design and bidding process. The successful bid to host the 2022 FIFA World Cup has led to many new project announcements. The government has allocated $20bn towards the development of the tourism sector and 40% of its budgets towards infrastructure. Qatar is blessed with great resources and as a result it enjoys a dynamic construction and real estate sector.
 
Qatar aims to be a terrific destination for tourists. As a result, Qatar announced the construction of 130 new hotels, resorts and other leisure facilities, a new international airport, a new port with cruise passenger terminal, a new railway network, with metro, street trams and people carrier, as well as providing some 12 sports stadiums. An estimated 50m passengers will come through the New Doha International Airport when it opens in June 2013, with a capacity to handle 320,000 planes. Qatar Tourism Authority is pursuing a small percentage of these travellers to stay two consecutive days in Qatar beyond their stopover, totaling 2.5m travellers. 
 
The investment increase of $20bn over the next five years in tourism facilities will make Qatar not only attractive for travellers, but a hub that thrives on attractions. This directly translates into construction of luxury hotels, resorts and other leisure facilities, totaling a 400% increase in hotel capacity up to 29,000 luxury rooms by 2013.
 
The services sector is one of the dynamic sectors of Qatar's economy. This sector is considered to be one of the fast growing economic sectors in Qatar, and a good example of that is the telecommunication sector.
 
The industrial sector in Qatar is also categorised as one of the most pivotal sectors and is key to diversifying the economy, and reducing the reliance on oil and gas as a major component of Qatar's GDP and revenue.
 
Last but not least, the educational sector has undergone a complete categorical transformation, and is expanding exponentially. Qatar Foundation, the educational capital city of the Middle East, is not only colossal but unequivocally outstanding for the entire region. Qatar Foundation, founded in 1995 by his royal highness the Emir of Qatar and chaired by Sheikha Mozah aims to support Qatar on its journey from a carbon economy to a knowledge economy by unlocking human potential. 
 
Qatar Foundation has attracted many prestigious international universities that are solidly ranked globally including Cornell, Georgetown, Northwestern, Carenegie Mellon, Virgina Common Wealth, and University College London. Qatar Foundation aims to unlock the human mind through its three pillars of Education, Science & Research and Community Development. This will benefit not only Qatar, but the region & the world. It is bringing world-class education, work experience and career opportunities to Qatar's young people and it is building Qatar's innovation and technology capacity by developing and commercialising solutions through key sciences."
 
What is the current business climate? Has the current global recession affected Qatar?
 
"Despite the global economic uncertainty around the world that continues to have a negative impact on a number of different regions, Qatar's economic performance has been tremendous. Qatar has not shown any symptoms of recession. In fact it has witnessed a robust growth in GDP over the past few years with a solid GDP growth of 14.1% for 2011 and a nominal GDP increased by 36.3%. This is driven by significant Liquefied Natural Gas export capacity.
 
Qatar has undergone a major construction transformation over the past few years. There are huge construction projects around the country. The transportation sector is the largest beneficiary of the enormous investment made by the government. The increase in population, as well as the inflow of tourists will not only improve and enhance the retail sector, but also hotel sector. Massive investments are being made in shopping outlets.
 
According to an annual construction report released this year, Qatar has not placed any major construction projects on hold, unlike Dubai, Bahrain and Kuwait. In Qatar, the projects put on hold were around 4% of the total market, compared to 59% and 24% in UAE and Kuwait, respectively that is insignificant.
 
The indicators for the construction sector outlook look solid, as much of the investment is backed by the government. The news of Qatar hosting the 2022 FIFA World Cup has further brightened the outlook of the sector. The rapid increase in population over the past few years has resulted in increasing demand for infrastructural development in Qatar. All these factors will collectively lead to ample opportunities for construction activity in Qatar."
 
What do you think hosting major sporting events will do for the country?
 
"Hosting one of the largest major sporting events in the world - the 2022 FIFA World Cup - is considered a solid enabler or a catalyst that will build bridges between cultures and create a platform to enable people from all over the world to get together. It will contribute to raising Qatar's profile regionally and internationally, creating ample job opportunities, producing an efficient and productive workforce. It will also accelerate the development of the objectives of the Qatar National Vision 2030 which aims to be an advanced society capable of sustaining its development and providing a high standard of living for all of its people categorised under four categories - economic development, human development, social and environment development. Furthermore it is expected to have huge impact on national sports through younger generations/youth, increasing the level of participation of sports and physical activity.
 
Qatar's successful 2022 bid has already boosted a plethora of infrastructure projects worth more than $100bn happening in the country based on the Public-Private Partnerships (PPPs) model, and as a result will accelerate the development and expansion in the economy, creating many construction projects such as rail, air, hotel, sports facilities, and hotel/leisure facilities. This in return will attract many international investors to set up offices and dynamically seize opportunities. Another beneficiary will be the financial sector. The plan could result in deeper stock markets with some companies likely to go public for their funding making Qatar competitive and a financial hub for the region."
 
Contact details:
 
Grant Thornton Al Eid & Co - Arab Accountants 
(155) C. Ring Road 
PO Box 6879 
Doha 
T 974 436 7845 
F 974 436 7846 
 
This article is not intended to be a complete statement of the law relating to the subject matter. Advice should always be taken on specific matters and no responsibility can be accepted by Grant Thornton or MEI for action taken based on the content of this article.

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