Doha: Qatar Financial Centre (QFC), a leading onshore financial and business centre in the region, is playing a crucial role in further boosting economic growth, attracting Foreign Direct Investment (FDI) and advancing economic diversification in the country. As Qatar’s economy holds significant promise in the years ahead, investors and companies across the world want to be part of Qatar’s flourishing business landscape.
QFC has witnessed a remarkable growth over the past few years that reflects the resilience and economic strength of Qatar. QFC showed steady growth during the first half of 2021 despite the ongoing COVID-19 disruption, with the number of registered firms on the platform witnessing 32 percent increase since first half of 2020.
A total of 136 firms from several countries launched their businesses in Qatar by registering on the QFC platform during the first half of this year. The firms, mainly originating from UK, Canada, India, Lebanon, and Qatar, represent key sectors including digital, financial services, and sports, continuing to bolster Qatar’s increasingly flourishing economic landscape.
Mirroring the accelerated digitalisation in Qatar, 26 percent of the newly registered firms offer digital business solutions, 10 percent fintech innovations, and 6 percent offer disruptive solutions to the country’s growing sports sector.
In an effort to pave the way for the development of a more vibrant and sustainable business ecosystem to allow global investors to tap into Qatar’s market, QFC signed 10 Memoranda of Understanding with leading organisations in Qatar and other markets.
These include agreements with Labuan International Business and Financial Centre, Institute of Chartered Accountants of India, Moscow Innovation Cluster Fund, Internet Initiatives Development Fund, QR Sports, Business Russia, Qatar Russia Investment and Trade Advisory, Roscongress Foundation, Qatar Central Securities Depository, and Qatar Museums.
QFC actively engaged leading local and international organisations by holding 23 interactive events. These events provided insights to international firms on how to navigate the Qatar market, areas of disruptive innovation in Qatar’s economy, and the opportunities surfacing in the country as it continues to witness strong recovery and growth signals.
QFC continued to take active part in the global conversation by attending the inaugural Qatar Economic Forum (QEF) and the 24th St. Petersburg International Economic Forum (SPIEF 2021).
Despite the challenges posed by the outbreak of COVID-19, QFC delivered a stellar performance in 2020. QFC registered significant increase of 63.7 percent in the number of new firms licensed on the QFC platform in 2020, compared to 2019. The QFC registered 334 firms in the year to 31 December 2020, compared to almost 200 firms registered over the same period in 2019.
Ending the year on a high note, the QFC maintained its business growth for the 8th consecutive year, despite the unprecedented global economic slowdown as a result of the COVID-19 pandemic. The expansion of the QFC-registered firms, which represents a variety of industries, both financial and non-financial services, included a record increase of 139.5 percent in the digital sector. Given the tremendous opportunities that emerged in the technology and digital sectors amidst the COVID-19 outbreak, and backed by the QFC’s fintech services provider license, the platform welcomed 91 new digital firms, hailing from diverse countries including India, USA, Pakistan, France, Russia and the United Kingdom. The QFC also continued to leverage its support to other firms across its strategic clusters, namely sports, media and financial services, registering 62 newcomers from these sectors.
In 2020, the QFC implemented several support measures in the face of the COVID-19 outbreak, which offered relief to its registered firms, in addition to new policies that create opportunities for firms looking to tap into the Qatar’s flourishing market. This included a legal services policy, which ensures that new QFC-licensed legal firms have the capacity and expertise to serve international clients across geographic boundaries.
Another significant announcement was the new regulations for financial institutions to operate a representative office in Qatar, which further bolsters their business by allowing an increased range of permitted activities. The QFC also introduced a holistic digitalised incorporation process that streamlines the business experience of new firms, starting from the licensing phase, and throughout their journey in Qatar.
The year 2019 was an exceptional period for QFC as it witnessed strong growth of 35 percent, reaching 71 percent of its strategic 2022 target of 1,000 firms being registered on its platform. Total number of licensed firms in 2019 was up 323 percent beyond QFC’s annual target.
Total assets under management (AuM) at QFC have also seen a sharp increase. The AuM have more than doubled compared to Q4 2019, rising to QR61.2bn by fourth quarter (Q4) of 2020, whereas assets under custody rose to QR1.8bn, giving a total value of QR63bn. The value of AuM in QFC complement QFC’s gross value added (GVA) contribution to Qatar’s GDP as a measure of QFC’s contribution to the Qatari economy. Whilst QFC’s GVA contribution of $1.89bn in 2018 shows the substantial impact QFC has made on the Qatari economy in the recent past, the AuM show the contributions QFC may potentially make in the future. This is because the AuM is an indicator of future economic value through the activity they may generate. The AuM therefore provide an alternative view of QFC’s economic impact by showing QFC’s future economic potential.
There are a range of supporting economic benefits that may arise through the observed increase in AuM on QFC’s platform. In general, asset management can match investors seeking appropriate savings or investment vehicles and the financing needs of the real economy. Further, financial vehicles raise capital from retail and institutional investors and provide funding to other sectors, such as monetary financial institutions, non-financial corporations and government agencies.
Looking at QFC specifically, asset management can create benefits both directly, through the value added by expert management and planning of investments, and indirectly, through supporting services such as investment operations, accounting, advisory, legal, other professional services and other services.
In the longer term, more AuM can bolster Qatar’s global reputation as a financial services hub, and lessons from other centres suggest this may require targeted policy interventions.
QFC is making a strong contribution to the economy, as demonstrated by a contribution of 1.5 percent to Qatar’s non-oil GDP in 2018.
