Peeking over the Persian Gulf at its innovative neighbors, Qatar has decided to follow suit. Much like the free economic zones in the UAE, the Qatar Financial Centre (QFC) has rolled out a comprehensive framework for the regulation and creation of digital assets.

Aligned with the Third Financial Sector Strategy released by the Qatar Central Bank, the Qatar Financial Centre Authority (QFCA) and the Qatar Financial Centre Regulatory Authority (QFCRA) have launched the QFC Digital Asset Framework. This all-encompassing and forward-thinking framework is designed to create and regulate digital assets within the QFC.

This new structure sets high standards for the asset tokenization process and establishes a robust technological infrastructure, ensuring trust and confidence among consumers, service providers, and industry stakeholders.

Qatar's Roadmap for Digital Transformation

In November 2023, Qatar unveiled its Third Financial Sector Strategy to build a capital market that would help the country unlock its economic potential. The plan involves utilizing emerging technologies to speed up digital transformation.

The QFC Digital Asset Framework 2024 lays down the legal and regulatory foundation for digital assets, covering everything from the tokenization process and legal recognition of token ownership and underlying assets to custody agreements, transfers, and exchanges.

This framework also provides legal recognition for smart contracts, ensuring a secure and transparent digital asset ecosystem within the QFC that meets the highest international standards and best practices.

Since the launch of the QFC Digital Asset Lab in October 2023, more than twenty startups and fintech companies have been accepted into the lab to develop, test, and commercialize their digital asset products and services. The work of the QFC Digital Asset Lab has run in parallel with the QFC Digital Asset Framework, highlighting the critical role of industry engagement and collaboration in shaping this structure.

Commenting on the launch, H.E. Sheikh Bandar bin Mohammed bin Saoud Al Thani, Governor of the Qatar Central Bank, stated, "The introduction of the 2024 Digital Asset Regulation marks a significant milestone in our journey to realize the Third Financial Sector Strategy."

He emphasized that this framework would create substantial opportunities and support the establishment of a robust regulatory environment in the financial sector. This aligns with Qatar's digital transformation goals as part of the Third National Development Strategy, the final phase of Qatar National Vision 2030.

According to the plan, such development is expected to contribute $84 billion to Qatar's GDP by 2030.

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Source: Third Financial Sector Strategic Plan

Yousuf Mohamed Al-Jaida, CEO of QFC, expects this regulatory clarity to attract both domestic and international players, enhancing the competitiveness of Qatar's financial services sector.

What are the Perks of Running a Crypto Business in Qatar?

The Qatar Financial Centre (QFC) has its own legal, regulatory, tax, and business framework, distinct from the rest of Qatar.  

The Qatar Financial Centre serves as an onshore business and financial hub, enabling companies to operate within Qatar and the region under a legal and tax framework that adheres to international standards. It offers a quick and straightforward setup process that licenses, establishes, and supports businesses in and from Qatar, backed by a dedicated client services team to meet all the business needs.  

QFC companies enjoy many financial perks: dividend, interest, royalty, and management fee payments from Qatar are exempt from withholding tax, allowing shareholders to repatriate income and profits tax-free.  

With a fair and transparent tax regime, QFC benefits from Qatar's Double Taxation Agreements with over 80 countries, a 10% corporate tax rate on locally sourced profits, no personal income tax, property tax, or Zakat, and an efficient advance ruling service.  

The legal, judicial, and regulatory framework is based on English common law and best international practices, featuring an independent court, regulatory tribunal, and dispute resolution center. 

QFC also allows registered firms up to 100% foreign ownership of their businesses in Qatar. And if that wasn't enough, QFC also offers plenty of sunshine.

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