Qatar benefits as companies look beyond developed world

Qatar Financial Centre is benefitting from the country's spectacular economic growth and turmoil disrupting Bahrain, a rival financial services centre.

The number of new companies licensed with Qatar Financial Centre (QFC) has doubled this year as it benefits from the country's spectacular growth as well as the unrest affecting neighbouring Bahrain.

QFC was receiving growing interest from Asia as banks in the developed world take stock amid slowing global growth.

"There's been an increase in interest," said Akshay Randeva, the head of strategic development at the Qatar Financial Centre Authority. "If we look at the outlook for QFC, we have a positive pipeline."

Eighteen firms have applied for licences at QFC this year, compared with nine companies in the whole of last year.

Qatar is focused on diversifying its gas-wealth economy into finance. But it faces competition from financial centres in Bahrain, Dubai and Abu Dhabi, which is also building a financial centre.

To try to differentiate, Qatar's government decided last year to focus on key areas of reinsurance, captive insurance and asset management.

With a GDP expansion of 16 per cent this year, the country's growth should outstrip its neighbours as its revenues from gas propel the economy.

The strong growth was attracting interest from banking, insurance, private equity and law firms as a result, Mr Randeva said.

"Part of the attraction is the economic fundamentals and the growth Qatar is seeing and it's also the increasing role of Qatar in the regional and global arena," he said.

"The 2008 crisis and 2009 and 2010 led to companies around the world going back to rethinking their strategy. But the result is that the rethink has been good for Qatar as it is within the strategy."

Bahrain was hurt by protests earlier this year, which led to some banks saying they were considering relocating their regional headquarters. Mr Randeva said the regional unrest had helped to stimulate interest in QFC.

Now, an economic slowdown is creating an uncertain outlook for banks in Europe and the US. The euro-zone sovereign debt crisis and weakening growth in the US is leading to the largest wave of job cuts since 2008 and expansion plans to be curtailed.

Growing interest from Asia was helping to offset the risk of the slowdown, he said. In a bid to increase overtures from China, this week the QFC signed an agreement with China's Pudong New Area Financial Services Bureau. The Industrial and Commercial Bank of China, the world's largest bank, is already registered with the QFC regulatory authority.

But there was still a risk of the slowdown affecting plans, said Mr Randeva.

"Uncertainty around global growth means there's a risk of contagion in terms of on balance sheets and growth slowdown."