Investing in Qatar: real estate and business in 2024

In 2024, the Government of Qatar continues its policy of openness to foreign capital. Following the successful example of the UAE, ambitious projects are being launched, free trade zones are being opened and new residential areas are being developed.

The investment climate is being improved by laws adopted in the last decade: as of 2024, foreigners can own 100% of shares in enterprises in almost all sectors of the Qatari economy and purchase real estate under a simplified procedure.

Although the Qatar market is undergoing a correction after the explosive growth of key sectors of the economy in 2022, it still remains a popular investment destination among Russian-speaking real estate buyers.

The content of the article

1. Qatar’s investment climate
2. Opportunities for investors in Qatar
   1. Real estate offer in Qatar
   2. Qatar’s real estate market: key indicators
3. Qatar Rental Market
4. Popular projects in Qatar
   1. The Pearl District in Doha
   2. Lusail City District
   3. Qetaifan Islands Area
5. The tax system in Qatar
   1. Income tax
   2. Taxation of companies
   3. Capital gains tax
   4. Personal income tax
   5. Tax benefits
6. Pros and cons of investing in Qatar
   1. Qatar residence permit for real estate investments
   2. Advantages of a residence permit in Qatar:
7. Doing business in the Qatar Free Zone
   1. Features of creating a company in a free zone
   2. Qatar’s Free Zones

Qatar’s investment climate

One example of efforts to diversify Qatar’s economy was the successful hosting of the 2022 FIFA World Cup. Thanks to this, such sectors of the economy as tourism, hotel business and development have become more active.

The 2022 World Cup pushed for the development of infrastructure: first-class entertainment infrastructure, a port, a subway, and railways were built. Moreover, Qatar became the first Persian Gulf country to abolish the Kafala system of sponsorship of foreign workers, which was a serious step towards improving labor protection and mobility of expats in the country.

Thanks to the development of the tourism sector and the World Cup, Qatar has increased its global prominence and in 2023 received a record number of foreign visitors in 5 years of observation.

Since the beginning of 2023, the number of tourists in Qatar has increased by 91% compared to 2019 before the pandemic and by 40% compared to 2022, when the country hosted the World Cup.

The International Monetary Fund, in its assessment of Qatar’s macroeconomic indicators, notes that due to the 2022 World Cup, the country’s “business card”, it will continue to increase tourism indicators, approaching the announced plan for an annual tourist flow of 6 million visitors by 2030.

In the period 2023-2027, Qatar’s economic policy will be determined by the Qatar National Vision 2030 project. Its concept is aimed at creating a favorable business environment conducive to the growth of foreign investment, attracting qualified specialists and the overall development of the economy.

And yet, according to the World Bank, the key driver of Qatar’s economy will still be the production of liquefied natural gas. After the economy grew against the background of high hydrocarbon prices in 2022, the dynamics returned to normal, and real GDP growth in 2023 stopped at 1.6%.

Qatar’s currency, the rial, is pegged to the dollar at the rate of 1 US dollar to 3.64 Qatari rials.

Opportunities for investors in Qatar

In 2018, Qatar passed a law simplifying the process of buying real estate for foreign investors, and the construction boom on the eve of the 2022 World Cup further stimulated the growth of supply in the real estate market.

Foreigners are allowed to own real estate in 9 freehold zones of Qatar on property rights: West Bay Lagoon, The Pearl Qatar, Al Khor Resort, Al Qassar, Al Dafna, Onaiza, Al Wasail, Al Kharij, Jabal Theyleeb. In another 16 districts, real estate can be purchased on a 99-year lease.

Real estate offer in Qatar

In recent years, the image of Qatar has undergone impressive changes: the rapid development and appearance on the market of a number of iconic areas, projects, gated complexes, hotels and luxury villas.

The rapid expansion of the real estate sector has put the country on the list of promising markets, but after the 2022 World Cup, the results of such active development began to show outstripping demand.

The oversupply became acute after the World Cup, when demand weakened, but in the 1st quarter of 2023, the number of new buildings commissioned continued to grow, as facilities planned for the World Cup entered the market. There was a paradoxical phenomenon when the tourist flow broke records for 5 years, and the occupancy rate of the hotel sector continued to decline and reached a level slightly above 50%. In 2024, the indicator has already returned to normal and approached 70%.

For the whole of 2023, 7,912 construction permits were issued — a decrease of 10.9% compared to 2022 and 16.8% compared to 2021.

According to the Qatar Planning and Statistics Authority (PSA), 229 permits for the construction of residential real estate were issued in February 2024, which is 11% less than a month earlier. A decrease was noted in most municipalities: Al Khor (a decrease of 30%), Al Rayyan (17%), Al Doha (16%), Umm Slal (15%), Al Shammal (13%), Al Wakrah (3%).

The most permits (62 pcs.) were issued in the municipality of Al Rayyan, a suburb of Doha. There are 44 in Al Da’ayen, a municipality that includes the city of Lusail, which is popular among foreign investors, and 38 in Doha.

As a percentage, villa development is most actively developing in most provinces of Qatar — 87.8% of construction permits. Apartments account for only 10.5% of the permits issued.

Attempts to balance the oversupply have been made since the beginning of 2023: the law regulating the real estate sector has been updated, a platform for data collection and centralization has been launched, and a direct state body for regulating the housing market has been created.

The steady growth of the country’s population contributes to reducing the gap between the supply of real estate in the Qatari market and the demand for objects. According to PSA, the population of Qatar in 2024 reached 3.12 million people — an increase of 5% compared to 2023 and 11.2% by 2022.

The Qatari government has also revised the rules for residential mortgage lending and introduced new mortgage terms in 2024:

Qatar real estate market: key indicators

Having reached a peak in 2021 (5,374 transactions), the number of real estate transactions in Qatar gradually decreased and in 2023 dropped to the lowest value in 6 years of observation — 3,579 transactions with a volume of 4.59 billion US dollars.

In relation to 2022, the number of real estate transactions in Qatar decreased by 16.9%. The total volume of investments decreased by 26.8%.

In 2023, real estate was most in demand in the municipalities of Al Rayyan (26% of transactions), Doha (23%), Al Dhaayen (16%), Al Wakrah (14%) and Umm Slal (11%). Compared to 2022, the share of transactions in the capital of Qatar decreased by 3% and in the municipality of Al Dhaayen by 2%.

The average cost per sq. m. meters in Doha in 2023 was 2,823 US dollars, the highest value in the whole of Qatar. The indicator increased by almost 10% compared to 2022, when the quarter A meter in the capital cost $ 2,568.

In the second largest number of transactions in the Al Dhaayen district (Lusail city), a square meter cost an average of 1,646 dollars — an increase of 26% compared to 2022.

Price dynamics per sq.m. meter in popular areas of Qatar

Qatar Rental Market

The housing supply in Qatar has received a significant boost due to the construction of facilities specifically designed for guests of the 2022 FIFA World Cup. Now these facilities have already entered the market, as a result of which rental rates for apartments and villas have decreased to the previous level (before the 2022 World Cup).

In the first half of 2023, there was a significant correction in rental rates in Doha is on the downward trend, but in recent months, housing rents have stabilized.

The most attractive areas for investment in real estate in Qatar with subsequent leasing in 2024 were the artificial island of The Pearl in Doha, West Bay — the entertainment and shopping cluster of the capital, and Marina District – the promenade of the city of Lusail.

According to the Global Property Guide, the average return on real estate in Qatar is at the level of 5.5–6% ROI. Apartments show a high yield — 6.4% per year, and villas — an average of 4%.

Popular projects in Qatar

In the premium segment of the real estate market, there is a noticeable tendency for tenants to move from the old residential complexes of The Pearl Island to new projects. This led to a difference in the occupancy rate of buildings depending on their age and the quality of construction.

Similarly, residents of Doha’s old suburbs are increasingly seeking to move into modern apartments in Lusail Fox Hills and Erkiyah City.

Foreigners are allowed to own real estate in 9 freehold zones of Qatar on the basis of ownership rights. The most popular of them in 2024 were The Pearl, West Bay, Lusail City and Marina District.

The Pearl District in Doha

The Pearl is the “Pearl of Qatar”, an artificial island with an area of 4 sq. m. km near the West Bay area of Doha. An ambitious megaproject from the United Development Company development master Company, which took at least $ 2.5 billion in investments.

The construction of Pearl-Qatar was announced back in 2004, when the completion date of the project was planned for 2012. Subsequently, the solemn surrender was postponed to 2018. By this point, the developer estimated that about 27,000 people lived here — about 60% of the original plan to accommodate 45,000 residents in 18,831 units.

The “Riviera of the Middle East”, as the Qatari authorities position this island, refers to the Cote d’Azur with Saint Tropez and Cannes. At the same time, the architecture of the “Pearl of Qatar” is dominated by Arabic rather than Mediterranean motifs. This contrast of styles creates a bright and memorable look that sets Pearl apart from the rest of the Doha development.

What makes the artificial island of The Pearl attractive for real estate investments? The key advantages are convenient transport accessibility to the city center, main attractions and major highways, as well as the unique concept and architecture of the community, favorably emphasizing its premium status.

Lusail City District

Perhaps every developed country in the Middle East has its own recognizable megaproject “cities of the future”. Such ambitious initiatives not only demonstrate the aspirations of the state, but also show that the petrodollars earned earlier are now directed to the development of the environment, the production of large-scale projects and the implementation of sustainable ideas.

For Qatar, Lusail City has become such a beacon of reasonable economic diversification and urban transformation. This project was conceived as a platform without borders, using innovation and creativity to attract people, ideas and growth opportunities.

The Lusail City concept is to create an environmentally sustainable, fully interconnected world where infrastructure is harmoniously combined with human development. A kind of multicultural structure embodying Qatar’s progressive course with its openness to everything new, but at the same time carefully preserving the country’s rich cultural heritage.

Lusail City is a vivid example of how the state, thanks to bold large—scale projects, transforms earned resources into a high-quality, comfortable and advanced living environment for its citizens and guests. This area is the quintessence of modern Qatar’s aspirations and one of the region’s ambitious development endeavors.

Qetaifan Islands Area 

Qetaifan Islands is a private gated community that is rapidly gaining popularity as one of the most exclusive residential addresses in Qatar. The three southern islands of Ketaifan — each with its own unique character — are designed to offer a premium and comfortable family lifestyle.

Luxury villas with garden plots and access to the waterfront, exclusive beaches and stunning sea views are being built on the islands. The development of Ketaifan is an example of sustainable urban planning, an exclusive oasis for relaxation from the hustle and bustle of the city.

The tax system in Qatar

Qatar’s tax system creates incentives for business growth and development by offering moderate tax rates and significant benefits to certain sectors of the economy and foreign investors.

Qatar’s Tax Advantages

Income tax

Corporate income tax in Qatar is set at 10% of net profit — the standard rate for most types of businesses operating within the country. The rate applies to profits earned from both local and international activities if the activity is conducted and managed from Qatar.

Royalties, interest, commissions and fees for services rendered in whole or in part in In the State of Qatar, paid to non-residents for activities not related to a permanent mission in In the State of Qatar, they are subject to withholding at source in the amount of 5% of the total amount.

Taxation of companies

Foreign companies operating in Qatar through a permanent establishment are required to pay income tax at the same 10% rate as Qatari companies with respect to income derived from sources in Qatar.

Qatar has concluded a bilateral tax agreement with Russia on the avoidance of double taxation.

Capital gains tax

Taxable sources of income:

• Gross income received from real estate located in Qatar, as well as capital gains arising from its sale.
• Gross income arising from the ownership of shares or interests in resident companies or companies listed on national financial markets, as well as capital gains arising from their sale.
• Interest on deposits received in Qatar.

Residents of Qatar are exempt from capital gains tax. A residence permit in Qatar can be obtained for investments in real estate from 200 thousand dollars.

Personal income tax

Income tax is not levied on wages, salaries and benefits of working citizens.

The income of self-employed persons may be subject to income tax of 10% if they receive qualified income from sources in Qatar.

Tax benefits

Foreign investors can enjoy tax benefits depending on their business sector and type of investment. For example, exemption from income tax for up to 10 years for projects in the industry, agriculture, tourism, healthcare and education sectors in free zones.

In some cases, for example, when contributing to the development of the national economy or creating jobs, companies can take advantage of tax holidays, that is, full or partial tax exemption for a certain period.

Foreign companies in Qatar is free to repatriate profits without paying taxes.

Pros and cons of investing in Qatar

The Government of Qatar positions the country as a regional center for foreign investment: in recent years, steps have been taken to improve the investment climate and develop infrastructure in accordance with the global strategy and global trends.

Today, Qatar is a sought—after foreign real estate market, which is trying to repeat the successful experience of the UAE. Qatar promises a lot of new opportunities for those who are ready to participate in all the transformations of the still young market and experience all its ups and downs.

In the short term, Qatar attracts new investors with a loyal residence permit program with a low entry threshold and favorable business conditions in free zones.

Qatar residence permit for real estate investments

Foreign investors can obtain a Qatar residence permit for investing in real estate. A residence permit is provided for 2 years for investments in the amount of 200 thousand dollars or more.

For investments in real estate in the amount of $ 1 million or more, an investor can receive a “golden visa” for a period of 5 years with benefits for education and medicine (healthcare as a resident of Qatar for the investor and family).

Advantages of a residence permit in Qatar:

• Residents of Qatar are exempt from capital gains tax.
• Simplified procedure for opening an account in Qatar banks.
• Access to Qatar’s healthcare system.
• The opportunity to apply for a residence visa for family members.
• The ability to open a bank account with protection from automatic exchange of tax information.

Doing business in the Qatar Free Zone

Qatar’s free zones offer lucrative tax breaks, 20-year tax holidays, and the absence of individual income taxes and import duties. Investors also have the right to 100% ownership of the company with full repatriation of capital.

Features of creating a company in a free zone

The Qatar Free Zones Authority (QFZA) has published a wide list of activities that companies can engage in if they wish to open their business in any of Qatar’s free trade zones:

• logistics;
• industry;
• IT services;
• hotel business;
• maritime activities.

The list is regularly updated and supplemented with new permitted activities.

To open a company in the Qatar Free Trade Area, the applicant must submit an application including:

• a brief biography of the applicant;
• business plan;
• a statement on the applicant’s alleged activities with reference to the list of permitted activities;
• the application fee paid.

The business plan should reflect:

• information about the company/investor;
• description of the free zone project;
• requirements for the size of the land and building;
• requirements for public services;
• number of jobs and types of skills;
• transport logistics (how raw materials and finished products will be transported to and from the free zone);
• export plan;
• capital investments and sources of financing.

Qatar’s Free Zones

The Airport Free Zone in the Ras Bufontas area

Ras Bufontas covers an area of 4 sq. m. km, adjacent to the famous Hamad International Airport (HIA). This provides convenient access to air transport and reduces export turnover time.

The first line of the Doha Metro, opened in May 2019, directly connects Ras Bufontas with key areas of the capital.

The Port Free Zone in the Umm Alhoul area

The free zone of Umm Alhoul occupies 32 sq. m. km of territory near the port of Hamad, the world’s largest greenfield port, which makes it an optimal place for industrial enterprises.

In addition to its proximity to the port of Hamad, Umm Alhoul has its own MARSA port, an integrated shipping system supporting boat construction, marine research launch, recreational yachting and water sports.

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