By Satish Kanady
DOHA: The US companies in Qatar demonstrate a strong vote of confidence in the future of Qatari market. The US companies’ level of investment and trade with Qatar is expected to ‘increase’ or ‘remain about the same’ at least over the next five years, the inaugural edition of the “US Business Outlook in Qatar” said.
The launch of the report coincided with signing of the MoU between the US and Qatar on economic and commercial dialogue held in Washington DC, on Monday. The report, based on a survey among the market leaders, is a collaboration project of the US Chamber of Commerce, the American Chamber of Commerce in Qatar (AmCham Qatar) and EY (Ernst & Young).
According to the survey, 83 percent of respondents professed that their company’s level of investment and trade with Qatar will ‘remain about the same’ or ‘increase’.
Profitability in 2015 compared to 2014 for US firms in Qatar looks set to rise. Of those surveyed, predict profits in the Qatari market to ‘marginally increase’, while an additional 17 percent shared their expectations for it to ‘significantly increase’. Moving into 2016, 50 percent respondents expect profits in Qatar to ‘marginally increase’ with a further 27 percent expecting profitability to ‘significantly increase’.
A diverse range of American-owned companies participants to the survey, with respondents from hospitality/leisure; IT/communications; insurance/legal; logistics; consumer products; defense/security; energy/utilities; financial services; healthcare; and various other sectors.
On the importance of Qatari market, 40 percent of respondents believe the Qatari market has grown in importance throughout the past two years, while 37 percent feel that it has ‘remained about same level of importance with respect to their organisations’ worldwide revenues during the same period.
This strong historic growth for US companies is mirrored in their own appraisal of the next two year period with the same number of respondents (40 percent) stating that they expect the Qatari market to become ‘more important’ to their worldwide revenue while 53 percent estimate that a presence in this market will result in revenues that will ‘remain about the same’, providing assurance in an otherwise volatile economy.
Exactly two-thirds of those surveyed expressed that the economic trends in Qatar during the past two years pointed toward ‘increased’ trade and investment within their organisations.
The findings of the survey suggest American companies are finding success in Qatar and, therefore, will remain to seek continued growth and business.
Overall, 53 percent of firms surveyed share plans to actively ‘expand’ their operations or presence in Qatar, while 33 percent state their company’s aim is to ‘remain about the same’, a very strong vote of confidence in the market.
The top two reasons for organisational expansion are ‘growth opportunities’ and ‘diversification of customer base’, which were selected by up to 75 percent of respondents as the leading drivers of expansion. Staffing this growth will require more personnel, so it is unsurprising that half of the US companies surveyed articulated their plans to increase staff numbers in Qatar during 2015.
Constraints on financing do not appear to be a ‘significant’ issue for 77 percent of US companies in Qatar polled by this survey. Moreover 90 percent answered that they are not facing higher borrowing costs in Qatar or that this issue is not applicable’ to their business.
IRS taxation of income earned abroad by US citizens is demonstrably effecting the recruitment of Americans to work for US companies in Qatar. A majority 63 percent expressed concerns that IRS taxation was having a ‘negative’ if not ‘significant negative effect’ on recruitment initiatives.
63 percent of US companies stated that the Qatarisation policies are not interfering or hampering the operations of American companies.
The Peninsula
