Fuelled by the energy prices boom, Qatar has been a major player in the foreign investment market, with both the state and private firms going on a considerable spending spree over the past few years. However, while not as high profile as its own investments overseas, Qatar has also been stepping up its campaign to attract foreign capital to the emirate.
Over the past six years, Qatar has put in place some of the most liberal legislation and regulatory regimes for foreign investors of any of the Gulf states, a part of the government's programme to diversify the economy and to lure both overseas funds and expertise.
The drive really got into gear in 2000, when legislation was passed allowing foreign investors to hold up to 100% ownership in enterprises in certain sectors of the economy, primarily energy exploration and development, the services industry, agriculture, industry, health, education and tourism. Previously, foreign ownership had been limited to 49%, with the requirement that any operation have a majority Qatari partner.
The foreign direct investment (FDI) laws of 2000 were backed up by further reforms, enacted in 2004, allowing for foreign investment in the banking and insurance sectors as well as another law permitting foreign ownership of real estate in designated areas.
The government has further sweetened the pie by offering tax holidays of up to 10 years, cheap to near non-existent rentals for land and access to inexpensive energy and is holding out the offer of extended free trade zones in the future.
While all foreign investments set out under the new laws require cabinet approval, with preference given to those projects that would utilise local resources, target the export market, produce or make use of high technology and boost local employment, most applications get the seal of approval.
In 2005, Qatar was ranked third, behind the UAE and Saudi Arabia, among the region's top destinations for FDI. However, Qatar's total of $1.5bn was a long way from the $4.6bn directed into the Saudi economy, let alone the $12bn that made its way to the UAE, an added incentive for the Qatar investment road show.
On December 11, R Seetharaman, the deputy chief executive of Doha Bank, told a conference on investment opportunities in Qatar staged in New York that the emirate had much to offer foreign investors.
"In addition to its own intrinsic attractiveness such as liberal investment regime, friendly government policies, infrastructure, abundance of resources and manpower, Qatar is strategically located right in the middle of Asia and Africa - two huge markets," he said. "With such ingredients, Qatar provides immense opportunities for global companies."
As part of its promotion push, Qatar pinned a lot of hope on hosting the Asian Games this month, as a showcase not only of athleticism but also of the emirate and its economy.
The games, which have stimulated the economy through the massive construction programme needed for venues and infrastructure, are expected to have an even greater flow-on effect, said Nasser al-Mir, a member of the Qatar Chamber of Commerce and Industry's board of directors.
"Our economy has become one of the strongest in the world," al-Mir was quoted as saying by the local press on December 4. "We are now looking at the future and hope that the inflow of foreign investment will catch the momentum. I think the impact of the games should be visible over the long term."
One of the latest overseas firms to heed Qatar's call is Japanese refiner Idemitsu Kosan Company, which announced plans on December 8 to invest some $80m in the Laffan Refinery, a unit of Qatar Petroleum, which is due to start production in 2008.
According to Zenichi Suda, general manager of Idemitsu's overseas operations department, the company was looking to add to its holdings in the emirate in the future.
"Qatar is a treasure house of energy projects," said Suda in an interview with the international press.
However, while investments in the energy sector dominate foreign capital inflow, Qatar wants to see other sectors of the economy take a greater slice of the pie. This in part has dictated the government's policy of encouraging investments in non-energy industries, such as agriculture, technology, tourism and services, as a means of building for the future and easing the economy's dependence on fossil fuel resources.
Though this policy is still taking hold, the energy sector is now accounting for 55% of the domestic economy and 80% of Qatar's exports, down on the figures from before the raft of new investment legislation was put in place.
With Qatar planning to boost its output of natural gas in the coming years, becoming the world's biggest supplier by 2010, these figures may shift again back in the favour of energy. However, the hard sell to foreign investors will continue, as will the increasing level of FDI inflow into the Qatari economy.