In a series of steps to improve economic ties between Qatar and South Korea, the Qatar Economic Forum was held in Seoul on January 31.
Qatar supplies 30% of South Korea’s natural gas needs and it is the state’s second largest export market. Overall bilateral trade in 2006 amounted to $6.7bn, with South Korea ranking ninth in Qatar’s import league.
During the summit, the Qatar Business Association and the Korean International Traders Association took the opportunity to sign a memorandum of understanding aimed at boosting industrial investments in both countries and increasing the transfer of technology from South Korea to Qatar.
Another incentive for South Korean firms to set up shop in Qatar was an agreement signed on January 29 that will see an end to dual taxation and a reduction on capital gains tax, along with a slashing of taxes on income from interest from 14% to 10%. Under the agreement, which still has to receive ratification from the two parliaments, both Qatari and South Korean investors will also be able to deduct tax incentives given by the other’s government.
Qatari Finance Minister Yusuf Kamal said that one of the reasons that his country is pursuing closer links with South Korea is that it wants to gain expertise in operating national industrial complexes. Qatar also wants South Korean participation in building its own free trade zones to transform the country into a regional trading hub, he said during the forum.
South Korea’s Minister of Finance and Economy Kwon O-kyu said, “Korean companies should also actively participate in Qatari economic projects, including making use of its free investment zone and participate in building a science-technology complex.”
South Korea is also considering setting up a free trade zone agreement with Qatar and the other nations of the Gulf Cooperation Council, he said.
“I think we can expand co-operation in various fields utilising Qatar’s resources and capital and Korea’s technology and development experiences,” Kwon said.
A number of Korean firms are already active in Qatar, mainly involved in the construction of major infrastructure projects, including in the energy and telecommunications sectors. With a program of further infrastructure upgrades in the pipeline, valued at $15bn, there will be many more opportunities opening up for Korean companies.
One project South Korea is deeply interested in is the planned expansion of the Qatari gas tanker fleet. On January 20, the Qatar gas transport company Nakilat announced it would acquire 60 tankers to carry liquid natural gas and liquid petroleum gas in a project valued at $11.5bn. With South Korean shipyards being one of the world’s leading producers of such vessels, and with some of the loans for the ambitious expansion program coming from South Korean export credit agencies, it is expected that a fair percentage of the work will be carried out there.