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Qatar pledges US$3 billion to spur interest in new free zones
[DOHA] Qatar plans to spend US$3 billion to attract foreign companies to its new free zones as the oil-rich country seeks to diversify its economy amid a boycott.
The world's biggest exporter of liquefied natural gas wants to lean on its existing ties with companies to attract foreign investment to the areas south of Doha, Ahmad Mohammed Al-Sayed, the chairman of Qatar's Free Zones Authority, said in an interview in the country's capital. Logistics, chemicals, plastics and artificial intelligence are among the industries intended for the zones.
"We are looking for the cornerstone investor first and are setting up a US$3 billion development and foreign direct investment fund as an incentive," said Mr Al-Sayed, a former chief executive officer of Qatar Investment Authority, the nation's sovereign wealth fund. "Qatar has reached a stage of development, after building the physical, social and economic infrastructure, where we are ready to welcome the most talented foreigners to live with us, and work and manage their businesses from here."
The incentive fund is just the start, and could increase to more than US$5 billion as the free zones expand, Mr Al-Sayed said. The country has already spent US$10 billion developing the areas that border one of the world's biggest cargo operations at Hamad International Airport and a new port, he said. Construction and the relevant legal frameworks will be completed by the end of next year.
Qatar, which has ties to companies ranging from Exxon Mobil Corp to Volkswagen AG, is transforming its political, trade and financial relations after it was boycotted by its neighbors last year. The country has earmarked US$2 billion for firms to join its financial center, to rival Dubai's, and is trying a similar tactic with the free zones, which are popular in the region.
Saudi Arabia, the United Arab Emirates, Bahrain and Egypt cut economic and diplomatic ties with Qatar in June last year, accusing it of financing terrorist groups and having close ties with Iran, charges the country rejects. The rift forced Qatar to shift import routes to Kuwait and Oman, and buy goods from Iran and Turkey.
Mr Al-Sayed said a group of listed companies in Qatar will form a joint venture to boost investments in the zones. He declined to provide details.
The Gulf has many established free zones, where foreigners can fully own companies and are often exempt from many taxes, in the UAE and proposed areas in Oman and Saudi Arabia. Mr Al-Sayed said there are more opportunities as businesses expand, seek new markets, and want to partner with companies such as Qatar Petroleum, Qatar Airways and the sovereign wealth fund.
"We have energy and resources, and we are determined to maximize the use of this wealth," Mr Al-Sayed said. "You might have a business somewhere else, but companies are growing every day and are establishing new business in every location, so it's normal to have multiple locations."