The Qatar Financial Centre (QFC) is mulling allowing foundations and limited duration companies to function under its umbrella, as part of broadening its platform to suit the local market’s requirements.
“We are considering expansion to allow foundations and limited-duration companies at the QFC,” its chief executive Yusuf Mohamed al-Jaida told Oxford Business Group in an interview.
Stressing that expanding the breadth of industries at the QFC is a key part of its strategy to support Qatar’s economic diversification; he said “we aim to continue broadening our platform based on the local market’s requirements.”
He said the QFC will also work closely with the other government agencies to identify and fulfil their (foundations and limited-duration companies) needs in terms of getting the businesses and services that they require onshore, within the confines of the QFC’s laws and mandate.
Terming that the decline in oil prices as both a problem and an opportunity, al-Jaida said the oil sector has taken a knock in the past year, but other sectors are proving resilient and diversification is continuing at a good pace.
Qatar’s non-hydrocarbons sector has accounted for more than half of the economy and growth since 2014, he said, adding that the financial sector is critical to this diversification process, both as a means and an end.
Efficient financial intermediation increases the productivity of investment, so the more efficient the financial system, the higher the growth rate will be, he added.
“Management of personal wealth is also a growing area for professional services firms and asset managers. Qatar has a very high density of private wealth, and there are also many regional opportunities,” he said.
Highlighting the opportunities for professional firms, he said as family businesses grow more complex, their investments more diverse and appreciation of the challenge of succession planning rises, many are turning to solutions like family offices and trust structures to help them manage their financial affairs.
In 2015 the QFC licensed twice as many firms as in 2014, and it continues to attract a broad range of companies, both international and local.
“Around 30% of our licensed firms are local. We also look at ways to expand the QFC’s value proposition and support the state’s diversification goals,” al-Jaida said.
In support of this, he said the QFC has looked at ways in which it can improve the firms’ experience and facilitate their success, which has resulted in a complete overhaul of its technology systems, the creation of a dedicated client relations team and a strong focus on facilitating clients’ partnerships with the local business community.
Elaborating on the measures taken to expand the breadth of industries, he said since 2013, the QFC has been taking steps to expand its environment and align it with the state’s needs.
These include the removal of the requirement for a nexus to financial services, the expansion of the definition of professional services activities to the full extent permissible under the QFC Law and the introduction of “companies limited by guarantee,” which allows business councils and professional associations to set up in the QFC.
Al-Jaida also highlighted the launch of first the renminbi clearing centre in the region, which opened China’s trade gates, and will increase financial connectivity between China, South-west Asia and the Middle East and North Africa region, as well as provide the opportunity to expand trade and investment between China, Qatar and the region.
“Banks can now expand their portfolios of financial services and products via facilitation and issuance of financial instruments such as trading of debt market products, and interest rate and commodity-derivative products denominated in Renminbi,” he said.