Stuart Pearce

'HSBC has already announced it intention to join the QFC, but we were delighted by the tremendous response from others, and the sheer range of products and services that they represented, from boutique corporate finance, private equity and venture capital to universal banking,' says Stuart Pearce, a career banker with HSBC until moving to head-up the Qatar Financial Centre in Doha.

'There was also a great deal of curiosity to find out more about what is happening in Qatar. Naturally this tended to focus on the 20-25% GDP growth rate, and the plans to invest $130 billion over the next five to seven years.'

But does this give Qatar the kind of critical mass that will attract the major banks and financial institutions? Some point to the absence of capital markets within the QFC as a disadvantage.

New QFC office tower

'Later next year we will move to our new permanent office tower, and I am confident that we will soon have 1,000 people working from that tower. We have carefully worked through the project funding needs of the major projects, and established the delivery wallet per project, and this size of investment definitely justifies the creation of the QFC.

'What we offer are rules and regulations to European standards, with the best of global practice. The QFC's design is quite radical and was established by the law issued in February.

'There is a flexible and international legal framework for a unique kind of onshore financial centre. And we want to make it as easy as possible for institutions to set up in Qatar and just get on with their business.

'We have a one-stop shop here that can issue a license in 90 days, and handle all the visa requirements in-house. We will even help firms find offices and apartments for staff. Capital markets are something we may decide to develop later as the demand dictates, possibly for bonds or securitization.'

But how does Qatar differentiate itself from Bahrain and the recently created Dubai International Financial Centre?

Different from Bahrain and Dubai

'We are not an offshore banking centre like Bahrain. We are onshore in Qatar. We are also more flexible than the DIFC which is half-way between an onshore and offshore centre, and does not allow members to take local currency deposits. But we don't really see ourselves as competing with Dubai; this is an onshore financial centre for Qatar.

"The QFC is also not a property play, and we will be working on a 'rents passed through' principle to keep rentals reasonable. Companies also have the freedom to locate in other offices in Doha which we can arrange to be designated part of the QFC.'

However, QFC member firms will still have to pay a tax of up to 10% on profits earned in Qatar after a tax holiday up to the end of 2008. Is this a price they will be willing to pay?

'We have 100% ownership and 100% repatriation of capital in a country that is asset backed and not a service economy,' says Mr. Pearce. 'There is also no Qatarisation quota system in place. Firms can employ who they like, although we expect they will find it useful to have some nationals working for them.'