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Sunday, July 25, 2021

Qatar drops five spots in World Bank’s new ‘doing business’ report

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Though more than 100 economies around the world have taken steps in the past year to improve their regulatory environments, it’s actually getting harder to be a business owner in Qatar, according to a new World Bank report.

Qatar ranked 50th in the 2015 edition of the Doing Business report, down five spots from the previous year. This appears to be in large part because planned reforms to make it easier to start a business here have stalled, and other factors continue to hinder those who already operating their own company.

In contrast, the UAE improved three spots to 22nd out of 189 economies. However, most of the remaining GCC countries fell in the rankings: Saudi Arabia was down five spots to 49th, Bahrain stayed at 53rd, Oman was down six places and is now 66th and Kuwait fell seven spots to 86th.

The economies included in the index are ranked on 10 factors. Qatar fared worse in seven of them this year, including starting a business (down 11 points), getting credit (down six points) and protecting minority investments (down four).

It improved marginally in registering property and was up five points when it comes to trading across borders, and Qatar remains about the best places in the world for businesses in terms of (not) paying taxes.

Daunting process

Entrepreneurs have long complained about difficulties in doing business here.

Earlier this year, a survey conducted by Ooredoo found that youth in Qatar had some of the highest entrepreneurial ambitions among their GCC peers, but that regulatory requirements are stifling their enthusiasm.

According to the World Bank report, it currently takes at least eight and a half days to file the necessary paperwork to launch a company in Qatar.

That’s far better than the 18.9 average days across the MENA region, and slightly better than the 9.2 day average of Organization for Economic Cooperation and Development (OECD) nations.

But the capital investment required is significantly higher – 62.6 percent of income per capita here, as opposed to 45.6 in the MENA region, and 8.8 percent in the OECD nations.

In terms of capital needed, one must have QR200,000 (US$54,921) in their bank account to register a company, in addition to possessing a lease for Civil Defense-approved office space that runs for at least one year – a commitment that can run beyond QR100,000 ($27,460).

Reforms stall

Early last year, the Ministry of Business and Trade (now Ministry of Economy and Trade) said it was working on a new commercial company law to make it easier to launch a company here.

One big change in the draft law involves the removal of the QR200,000 initial fund requirement to start limited liability companies.

Another idea that was being considered was establishing a “one stop shop” system so entrepreneurs could get all the paperwork done at one place in one day, instead of going to different ministries.

But those changes have not made any movement, and were perhaps put on the back burner following last summer’s government transition and subsequent Cabinet shakeup.

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