The Qatar Financial Centre (QFC), a business center based in Doha, Qatar, has released a comprehensive regime for regulating and creating digital assets.
In line with the Qatar Central Bank’s strategy, the QFC’s regulators, the Qatar Financial Centre Authority (QFCA) and Qatar Financial Centre Regulatory Authority (QFCRA) announced a framework that establishes a foundation for digital assets in the QFC.
The rules include tokenization processes and the legal recognition of property rights in tokens and underlying assets, custody arrangements, transfer and exchange. In addition, the framework has provisions for the legal recognition of smart contracts.
Like free economic zones in the United Arab Emirates, which operate independently from the mainland, the QFC has its own legal, regulatory, tax and business framework, separate from the rest of Qatar.
The QFC allows up to 100% foreign ownership and 100% repatriation of profits. It also “charges a competitive rate of 10% corporate tax on locally sourced profits.”
Supporting Qatar’s digital transformation
According to the announcement, the framework will ensure that the digital asset ecosystem within the QFC is secure and transparent and adheres to international standards. The QFC said that the framework sets standards for asset tokenization. Furthermore, it also aims to ensure trust and confidence among consumers, service providers and stakeholders.
Qatar Central Bank Governor His Excellency Sheikh Bandar bin Mohammed bin Saoud Al Thani said that the newly launched regulations are a milestone in realizing the country’s “Third Financial Sector Strategy.” He believes the framework will bring significant opportunities within Qatar’s financial sector.
In November 2023, Qatar launched its Third Financial Sector Strategy to create a capital market to help the country unlock its economic potential. The plan includes “embracing emerging technologies” to accelerate digital transformation.
The digital assets framework is also the result of collaboration and consultation with industry stakeholders. According to the QFC, it was developed with the help of an advisory group of 37 domestic and international organizations working in the finance, technology and legal sectors.
The QFC added that since its Digital Assets Lab launched in October 2023, it accepted more than 20 startups to develop, test and commercialize their products and services.
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