Qatar business relationship with other GCC countries in 2024

Fortunately, in January 2021 Gulf Co-operation Council (GCC) countries re-established diplomatic and business ties with Qatar. Over the coming years, international trade will prosper between Qatar and the GCC, and GCC economies should be energised by rising oil prices. We recommend our multi-national Clients open a Middle Eastern office to capitalise on the opportunities.

  • Qatar’s business relationship with GCC countries

    • Qatar is a member of the six-state GCC, a regional political and economic bloc.
    • GCC countries enjoy tariff-free movement of goods and services between member states. A customs union has been fully operational since 2015.
    • GCC citizens can work and live in any other GCC state. However, tax systems, accounting standards and legislation are unique to each country.
    • The bloc does not have a common currency. Like other GCC currencies, the Qatari riyal is pegged to the US dollar, so there are no exchange rate fluctuations between GCC currencies.
    • In 2017, Bahrain, Saudi Arabia, the UAE and Egypt imposed a diplomatic and trade blockade on Qatar. This included a cessation of i) land, air and sea cargo, including vital food supplies ii) passenger flights between the four countries and Doha, and also a ban on Qatari aircraft overflying the four countries and iii) broadcast rights for Qatari news network Al Jazeera in the four countries.
    • As of January 2021, air, land and sea links between Qatar and the GCC are fully restored. Qatar shares a land border with Saudi Arabia, the region’s biggest economy, through which large volumes of imports and exports are flowing again daily.
    • As Qatar-GCC supply chain disruptions ease, imports of food and raw materials to Qatar will become cheaper, and lead times for deliveries much shorter. Many global exporters use Jebel Ali Port in the UAE as the single point of entry into the GCC. Now, Qatari ports can handle imports from China, India and the world without restriction.
    • Qatari business people can freely visit other GCC countries again, and vice versa for their GCC counterparts. Daily direct flights are flying again between Doha and GCC capitals. Hospitality and leisure sectors are benefitting – Doha is especially popular among high-spending Saudi tourists.
    • Because Qatar is once again more attractive for expatriates to live and work, it is easier to attract and recruit skilled talent. Recruitment costs will fall.
    • The normalisation of Qatar-GCC relations may reignite plans to i) link Qatar to the GCC regional railway network and ii) build a bridge across the sea between Qatar and Bahrain.
    • Qatar’s US$300 billion sovereign wealth fund plans to start investing in Saudi Arabia and other GCC countries from 2021 and beyond.
    • Qatar Financial Centre wants to attract US$25 billion in foreign direct investment (FDI) by 2022. Doha is once again competing with Dubai and Bahrain to be the GCC’s financial hub, in particular in financial technology (FinTech) and Islamic finance.
    • Saudi exporters in particular will benefit in 2021 from a normalisation of ties. The big winners are likely to be i) dairy exporters (pre-2017 Qatar represented 5% of exports for Saudi dairy giant Almarai) and ii) construction materials manufacturers.
    • Saudis are the leading overseas investors in Qatar. They are expected to move funds back to the country in 2021, improving Qatar bank liquidity. Qatari banks rely heavily on overseas funding. The 2017 blockade led to the withdrawal of about US$30 billion in funds from overseas depositors, especially those from Saudi Arabia and the UAE.
    • The UAE real estate sector will also benefit from Qatari investors coming back to the market.
    • From 2021 onwards, regional businesses will re-open offices in Doha. Qatari businesses will open offices and expand into other GCC countries.
  • Opportunities for multi-national Clients

    • Multi-national Clients should establish a Middle Eastern office because Qatari-GCC trade volumes will rise significantly in 2021. For example:
      • During the 2017-2021 blockade, Qatar was only able to trade with Kuwait and Oman in the GCC. Trade volumes with these two countries were low because Qatar does not share land borders with them, and sea and air traffic was limited.
      • Between 2021 and 2025, Healy Consultants Group predicts the average annual value of trade between Qatar and GCC countries will surge. We believe Qatar will significantly increase liquefied natural gas (LNG) exports to neighbouring countries. Other products and services will include i) financial services ii) foodstuffs iii) oil and petrochemical products, including plastics and finished goods and iv) clean fuels.
      • Between 2013 and 2017, the average annual value of trade between Qatar and Saudi Arabia, the GCC’s largest economy, was US$3 billion. In 2021 and beyond, we predict this figure will double as GCC economies and infrastructure are more closely integrated. Cross-border trade will increase in i) dairy produce ii) mining and metals iii) petrochemicals iv) construction materials v) aviation services vi) banking and vii) logistics. It is also possible that Qatar will sign a massive natural gas supply deal with Riyadh, benefitting both economies. Many international investors will look to set up a Qatari company to do business with Saudi Arabia.
      • Because of the above, GCC economies will become healthier and energised, while the price of oil continues to trend towards US$80 per barrel. Out multi-national Clients’ sales within the GCC will increase.
  • Ongoing risks to the Qatar-GCC business relationship

    • The Qatar-GCC business relationship is vulnerable to continued geopolitical volatility. For example, there is a risk that Qatar’s ongoing political ties with Iran and Turkey could lead to future disagreements with GCC states, and further sanctions. A negative news story running on Doha-based Al Jazeera about Saudi Arabia or Egypt threatens future bilateral relations, as does Qatar’s continued support for the Muslim Brotherhood.
    • There could be lingering trust issues between GCC states and Qatar. This could impact in particular businesspeople from Saudi Arabia, Bahrain and the UAE, and may impact business negotiations and contract settlements. Joint venture discussions may take place against a background of these trust issues.

Contact us

For additional information on our company registration services in Qatar, please contact our in-house country expert, Ms. Chrissi Zamora, directly:
client relationship officer - Chrissi