Regulated Financial Services in the QFC
18.05.2014 @ 1 pm
Regulated Financial Services in the QFC
1
Regulated Financial Services in the QFC
18.05.2014 @ 1 pm
The Qatar Financial Centre: Facilitating Success
The Qatar Financial Centre (QFC) is one of the main driving forces behind Qatar’s economic success
and rapid growth story. Established by the Government of Qatar in 2005, the QFC is an onshore
financial and business centre. Mandated to build a world-class financial and business environment,
the QFC provides a platform for domestic, regional and international growth.
By facilitating access to both local and regional markets, the QFC is a springboard for both domestic
and international firms. A legal system based on English common law, proportional regulatory
framework and competitive tax regime, all based on international standards, make the QFC a
particularly attractive business environment.
The QFC Authority is the commercial and strategic arm of the QFC. It develops and ensures
compliance with QFC regulations and rules that cover the QFC’s legal and tax environments. The
QFC Authority helps firms to establish a physical presence in Qatar and the region. It issues licences
to firms intending to conduct Non-Regulated Activities and monitors them with the aim of fostering
a culture of compliance. In addition, the QFC Authority is responsible for developing relationships
with the global business community, enabling it to host industry events and publish insightful
thought leadership pieces on topics such as insurance, asset management and cross-border taxation
of Islamic finance.
The QFC’s regulatory body is the QFC Regulatory Authority, which is modelled closely on leading
financial centres and adheres to a proportional regulatory framework. The QFC Regulatory
Authority is responsible for authorising and supervising all asset management, banking and
insurance-related businesses conducted in or from the QFC.
The QFC provides an attractive base for a multitude of leading international financial institutions.
Examples of top-tier institutions include Citibank, Credit Suisse, Barclays, Deutsche Bank,
Industrial and Commercial Bank of China, Coutts & Co, Rothschild, AXA, Zurich, Allianz, Marsh
and Aon.
Furthermore the QFC is home to a range of prestigious local and regional institutions which include
Qatar Reinsurance Company, Daman Health Insurance, Al Rayan Investment, Kuwait Turkish
Participation Bank, SAMBA Financial Group, Abu Dhabi Islamic Bank and Bahrain National
Insurance Company.
Qatar: A Compelling Economic Story
Qatar is the ideal location to conduct financial and business activities in the Middle East given its
political stability, emerging market status by Morgan Stanley Capital International (MSCI) and
excellent connectivity between Europe and Asia.
Easy access to markets
Qatar is highly accessible and connected to major markets in the region via frequent flights on
multiple global airlines including the country’s award-winning airline, Qatar Airways. Ideally placed
2
Regulated Financial Services in the QFC
18.05.2014 @ 1 pm
between the European and Asian time zones, Qatar provides an excellent platform from which to
broaden relations with the global and regional business community.
Dynamic and fast growing economy with emerging market status
Classified by MSCI as an emerging market, Qatar is one of the most dynamic economies in the
world. Qatar was the fastest growing economy in the world with an average GDP growth rate (real
terms) of 13.4 per cent from 2003 to 2013 according to the International Monetary Fund (IMF).
Qatar has among the largest gas reserves in the world, with an estimated monetisable value of
US$25 trillion, and is the world’s largest exporter of liquefied natural gas (LNG).
Most competitive economy in the Middle East
In line with the Qatar National Vision (QNV) 2030 to establish a knowledge-based economy, Qatar
is pursuing a progressive strategy of economic diversification, all the while creating one of the
world’s most competitive business environments.
The world is noticing Qatar’s phenomenal story of growth and opportunity and it has recently
received several distinguished accolades. The World Economic Forum (WEF) ranked Qatar as the
13th most competitive economy in the world and the most competitive in the Middle East. The
Global Financial Centres Index (GFCI) gave Qatar the highest ranking in the Middle East and
placed it 26th globally in terms of financial centre competitiveness.
In addition to these successes, the Global Information Technology Report (GITR), offering an
overview of the current state of information and communications technology (ICT) readiness in the
world, ranked Qatar the most network-ready country in the Middle East and 28th most networkready country in the world.
Significant infrastructure investments
As part of its economic diversification strategy, Qatar is committed to spend over US$ 200 billion in
infrastructure. Prominent projects being developed include those for the FIFA (Fédération
Internationale de Football Association) World Cup 2022, Lusail City, Hamad International Airport
and Doha Port.
Why QFC?
In line with Qatar’s compelling economic story and with the strong support of the government, the
QFC offers significant growth prospects for firms seeking to gain a foothold in one of the fastest
growing regions in the world.
Business-friendly environment of international standards
Conducting business in or from the QFC is easy. Companies operating in the QFC have no
3
Regulated Financial Services in the QFC
18.05.2014 @ 1 pm
restrictions on foreign ownership, are free to operate in any currency, face no foreign exchange
controls and enjoy the ability to fully repatriate profits.
It is no surprise that the QFC was awarded the accolade of Best Financial Centre in the Middle East
for the third year running by Global Investor, a flagship publication of Euromoney Institutional
Investor.
Best-in-class legal environment based on English common law
The QFC provides businesses with a transparent, accessible and predictable operating environment.
It incorporates a consultative process that enables all stakeholders, including QFC firms, to voice
their opinions on all new legislation. QFC firms also have access to an independent judiciary in the
form of the Qatar International Court & Dispute Resolution Centre (QICDRC).
The QFC Authority is committed to continually review and enhance its legislative framework,
allowing firms to benefit from a strong and transparent legal environment, whilst also providing
flexibility in their operations.
Robust regulatory standards
The QFC Regulatory Authority maintains financial stability and reduces systemic risk through
efficiency and transparency. Its regulatory framework is benchmarked to international standards
and is issued by market setting organisations such as the Basel Committee on Banking Supervision
(BCBS), the International Association of Insurance Supervisors (IAIS) and the International
Organisation of Securities Commissions (IOSCO).
Competitive tax environment
In developing its tax regime, the QFC has adopted a competitive tax rate of 10 per cent on locally
sourced profits and a transparent and efficient administrative process unique among financial and
business centres in the region. Businesses setting up in the QFC can be assured that they operate in
an environment which meets rigorous international standards.
The QFC’s unique tax legislation has resulted in a best-in-class tax regime that strikes a balance
between fiscal objectives and the needs of licensed firms. The QFC provides a number of tax
advantages for firms including extensive tax exemptions for qualifying activities, as well as
dividends and capital gains, no withholding tax on payments out of Qatar, and no personal income
tax, wealth tax or Value Added Tax (VAT).
Clarity and certainty are important for any tax regime and the QFC offers an advance ruling service
which provides QFC licensed firms with a high degree of certainty when it comes to managing tax
affairs. The QFC Tax Department is proactive in helping QFC firms comply with their tax
obligations. Qatar has also signed Double Taxation Agreements with over 60 countries worldwide,
with further agreements under negotiation.
The QFC tax regime reaffirmed its international credibility in 2013 when the Organisation for
Economic Cooperation and Development (OECD) awarded Qatar the second highest possible mark
of “largely compliant,” following a two-phase report by the OECD Global Forum on Transparency
and Exchange of Information for Tax Purposes.
4
Regulated Financial Services in the QFC
18.05.2014 @ 1 pm
Ease of set-up
The QFC makes it easy to establish and operate businesses by providing best-in-class infrastructure
with minimal bureaucratic hurdles. It has its own immigration regulations and handles all aspects of
entry to Qatar and sponsorship of employees. In addition, the QFC has its own employment
regulations which are independent from, and operate in parallel to, corresponding Qatari laws.
Furthermore, firms can also take advantage of a broad selection of office space concentrated in the
central business district of Doha.
Dedicated and efficient services
The QFC Authority provides a smooth transition for businesses and families setting up in Qatar. It
provides a broad range of services to support the business operations of firms and to assist with visa,
residency, IT and other arrangements on behalf of employees and their families. Several services
can be expedited to meet the fast-paced nature of business and the needs of employees.
Foreigners seeking to work in Qatar can rest assured that the QFC Immigration Office is dedicated
to helping them settle into Qatar as quickly as possible. The QFC Immigration Office will help
secure the sponsorship, family visas, residence permits and health checks required to start working
and bring family members to Qatar. It will also transfer sponsorship from one organisation to
another, facilitate the extension of visas and convert foreign driving licences into Qatari licences. In
addition, the QFC Immigration Office will register QFC companies with the Immigration and
Labour Department.
The QFC Authority is committed to ensuring the security and strength of its IT infrastructure.
Notably, it provides a range of IT and telephony services to meet all the technology needs of firms.
Services include installing telephone and internal lines, offering technical assistance and providing
data centre space, video conferencing facilities and wireless internet connection.
Easy access to a broad range of professionals in the QFC and around the region
Given its status as an important financial and business centre for the Middle East, the QFC has
successfully attracted a wide range of seasoned professionals from around the world offering high
quality business services. This community of service providers enables QFC firms to obtain the
necessary services to address all their business requirements. Easy access to these services helps
QFC firms grow successfully in today’s fast-paced international business environment.
Rapidly developing financial services infrastructure
Qatar is committed to the continuous broadening and deepening of the country’s financial services
infrastructure. Qatar Exchange (QE), the Doha-based stock market, has been integral to the
development of the financial market’s liquidity, accessibility and efficiency. It has implemented a
range of initiatives targeted towards enhancing the attractiveness for listing firms from the region.
The QE implemented the Universal Trading Platform (UTP) which will further increase trading
activities with exchanges around the world. In addition, it established a separate junior bourse for
small and medium enterprises (SMEs) called QE Venture Market.
5
Regulated Financial Services in the QFC
18.05.2014 @ 1 pm
Family-friendly lifestyle options
Qatar offers expatriates a family-friendly lifestyle experience that balances Western culture with
local heritage. The capital city, Doha, offers its residents excellent healthcare, leisure and
educational facilities with a broad selection of international schools such as the International School
of London (ISL), SEK International School and Sherborne. Qatar is also host to a myriad of worldclass institutions such as Weill Cornell Medical College, Carnegie Mellon University, Northwestern
University, Texas A&M University, Georgetown University School of Foreign Service, University
College London and HEC Paris.
Highlights of Regulated Activities in the QFC
Qatar’s financial services sector continues to grow rapidly. The QFC is an ideal platform for
domestic firms planning to expand overseas and for international firms seeking to access regional
opportunities from Qatar. As an advisor to the State of Qatar on the development of the financial
services industry, the QFC is committed to facilitating the success of financial services firms.
Banking and Asset Management
The QFC is a highly attractive platform for global and regional banks and asset management firms
to gain access to a deep pool of investable wealth and robust deal flow from the dynamic economies
of Qatar and regionally.
Since 2008, Qatar’s banking sector assets has experienced strong growth of 20 per cent per year.
Robust economic growth and financial liquidity, as well as an increased appetite for new and diverse
financial products, have generated a multitude of exciting opportunities within the banking sector.
QFC banks can accept wholesale deposits as well as provide financing, investment and fund
management activities to wholesale clients.
Qatar’s Islamic banking sector is expected to double in size by year 2020. According to Standard &
Poor’s, the balance sheets of Qatar’s Islamic banks are expected to exceed US$100 billion by 2017.
In 2013, the Qatar Central Bank (QCB) began issuance of a US$275 million Sukuk, half with 3 year
maturities and half with 5 year maturities. Such developments are reflective of the fast-growing
Shari’a finance sector in Qatar. In order to support firms to maximise such a unique opportunity,
the QFC has developed rules to fully accommodate Shari’a finance.
Private wealth in the Middle East and Africa is estimated to be nearly US$5 trillion according to the
Boston Consulting Group. With this in mind, the QFC’s asset management regime has been
enhanced to facilitate asset managers to tap the immense pool of wealth in Qatar and regionally. For
example, the QFC Regulatory Authority recently revised its collective investment schemes regime,
which broadened the permitted investor base and expanded the range of asset management schemes
that may be undertaken. QFC asset management firms, on the other hand, operate and manage
collective investment schemes on behalf of clients. Schemes can be qualified investors that serve
sophisticated investors; retail schemes, which are limited to Undertakings for Collective Investment
in Transferable Securities (UCITS) type schemes; or private placement schemes, which have no
more than 100 unit holders and cannot be offered to the public.
6
Regulated Financial Services in the QFC
18.05.2014 @ 1 pm
Insurance
Strong growth potential exists in the insurance and reinsurance sectors as a result of the significant
investment in Qatar’s infrastructure. Firms have the flexibility to conduct insurance, reinsurance
and insurance broking activities in or from the QFC and can also serve both corporate and retail
customers. Takaful insurance can also be offered by Islamic insurers or through an Islamic window
of conventional insurers.
The QFC permits captive insurance firms to effect insurance contracts in four classes as follows:
 Class 1 captive: this class insures risks arising from the group
 Class 2 captive: this class insures risks arising from the group but is permitted to obtain up
to 20 per cent of its gross written premium from outside the group
 Class 3 captive: this class insures risks arising from similar businesses, activities, trade,
services, operations, etc.
 Class 4 captive: this class does not meet the requirements of class 1, class 2, or class 3. A
class 4 captive is assessed based on factors such as business rationale, interests of
shareholders, expert knowledge of shareholders, etc.
The QFC is a highly attractive jurisdiction for captive insurers to mitigate risk by setting up a
Protected Cell Company (PCC). A PCC consists of “compartments,” also known as cells, the assets
and liabilities of which are separated from those of the PCC itself and from those of other
“compartments.” This arrangement offers protection to shareholders from actions taken against
their “compartments.” A PCC would typically be authorised as class 4 captive in the QFC.
The QFC permits captive insurance management, which is the administration of insurance contracts
on behalf of a captive insurer. Insurance intermediaries can also be established in the QFC, which
enables a firm to act as a broker and to provide guidance with respect to the benefits of entering into
an insurance contract.
Application and Authorisation
Application Process
Applicants can start the easy application process by contacting the Business Development Team at
the QFC Authority. After their questions have been addressed, applicants will be invited to meet the
Authorisation Team at the QFC Regulatory Authority and to complete and submit the Form Q02
(Application for Regulated Activities Authorisation). Applicants will also be requested to complete
and submit Form Q03 (Application for Approval of Individuals), which will allow individuals
nominated to fulfil controlled functions to be approved. The functions include:
 Senior executive function
 Executive governance function
 Non-executive governance function
 Compliance oversight function
 Risk management function
 Finance function
 Money laundering reporting function
 Customer facing function
7
Regulated Financial Services in the QFC



18.05.2014 @ 1 pm
Senior management function
Actuarial function
Internal audit function
Asset management firms and captive insurance firms are also required to complete and submit Form
Q18A/18B (Application for Registration of a Collective Investment Scheme) or Form Q22
(Application for Authorisation for Captive Insurance Business), respectively.
At the same time, the Companies Registration Office (CRO) will ask applicants to complete the
relevant CRO form.
Application Requirements
The QFC Regulatory Authority’s requirements are standardised and easy to understand, although
there are some differences according to the permitted activity. Application and annual fees vary
according to the Regulated Activity (see Appendix below). The initial annual fee is pro-rated.
Estimated time frame for authorisation
Processing an application typically takes three months from the date that the Authorisation Team at
the QFC Regulatory Authority receives a complete application. The application process is
interactive and may involve correspondence, meetings and reports from third parties.
Upon receiving complete information and documentation, the QFC Regulatory Authority will then
provide an indication of how long it will take to process the application.
Supervision of Regulated firms in the QFC
The objective of the QFC Regulatory Authority is to encourage all authorised firms to adhere to the
highest professional standards and to create a culture of compliance in the QFC. The QFC
Regulatory Authority has created a principle-based legislation, modelled closely on leading financial
centres.
The QFC Regulatory Authority uses a risk-based approach to regulation comprising of four
features:




Dialogue with firms to foster closer relations with them and with their senior management
Cooperation with other regulators to ensure that firms are effectively supervised but not
exposed to duplicative requirements in different jurisdictions
Continuous cycle of risk management whereby firms undergo risk assessment and
classification using a standardised methodology
Effective use of supervisory tools such as on-site visits, personal meetings, desk-based
reviews and the requirement of regular reporting
Contact
8
Regulated Financial Services in the QFC
18.05.2014 @ 1 pm
For information about Qatar and the QFC or establishing a presence in the QFC, please contact the
Business Development Team at the QFC Authority:
Telephone no.: (974) 4496 7652
Email address: contact@qfc.qa
The purpose of this document is to give a general overview of regulated financial services in the QFC. For full details,
please refer to the QFC Law, the QFC Financial Services Regulations and the QFCRA Rules. Whilst the QFC
Authority makes all reasonable efforts to ensure that the information contained in the document is accurate, complete and
not misleading, no warranty, representation or undertaking of any kind whatsoever is given by the QFC Authority. The
contents of the QFC Regulations and Rules may change over time. Please refer to the latest version of this document.
9
Regulated Financial Services in the QFC
18.05.2014 @ 1 pm
Appendix
Application requirements for Banking and Asset Management
10
Regulated Financial Services in the QFC
18.05.2014 @ 1 pm
Application requirements for Insurance
Activity
Application Fee1
Initial capital requirement
Insurance
US$ 40,000
US$ 10,000,000
Reinsurance
US$ 40,000
US$ 20,000,000
Captive insurance (Class 1-4)
US$ 5,000
US$ 150,000 - US$ 1,000,000
PCC core
US$ 8,000
PCC individual cell
US$ 1,000
Insurance mediation
US$ 10,000
Not applicable
Captive managers
US$ 1,000
Not applicable
The actual ongoing capital requirements will depend on the nature and scale of a firm’s business and the consequent variable risks faced by the
firm in areas such as credit risk, market risk and displaced commercial risk (for Islamic Financial Institutions).
1Applicant
firm seeking authorisation to conduct more than one activity must pay for the activity which has the highest fee.
11