IFLR 1000
The Guide to the World's Leading Financial Law Firms

All around the GCC (Gulf Co-operation Council) businesses and law firms are looking to see which jurisdiction will emerge from the financial storm in the best health. Qatari lawyers are in no doubt: "Is Qatar doing better economically than surrounding countries? Just look at the GDP!" says one....

All around the GCC (Gulf Co-operation Council) businesses and law firms are looking to see which jurisdiction will emerge from the financial storm in the best health. Qatari lawyers are in no doubt: "Is Qatar doing better economically than surrounding countries? Just look at the GDP!" says one.

With global investors still seeking opportunities in the country, Qatar has one of the strongest growth rates in the region: "People used to look at Dubai as hip," says one lawyer, "now people are looking at Qatar because it is still a growth area." Another partner agrees: "Qatar for the next few years will be able to weather the financial downturn, a lot of plans are still in place."

Despite this optimism, the global downturn has affected the country, particularly the capital markets. "The market has changed dramatically; we had much more capital markets work before December, now that's over," says one partner.

There is some optimism however, with work still to be found in certain areas. "On the Qatari Stock Exchange there are people making investments in securities," says one partner. The biggest event of the year was the state of Qatar's $3 billion sovereign bond offering. As well as raising capital, it is hoped the bond will bring down the cost of borrowing and stimulate the country's bond market.

In the banking sector firms have noticed that while new lending transactions are going ahead, banks are becoming much more selective in their dealings. "What we're seeing now is that banks in Qatar are still busy; they still lend a lot but it's on the banks terms," says one partner. This selectivity has also seen greater lending to the public sector at the expense of the private.

Firms have also noticed a greater demand for regulatory advice and they will be looking at this area as a potential source of work in the future. "Regulatory work is on the up in Qatar, there are no rules in regard to the local stock market at the moment."

The M&A market is still vibrant in Qatar according to one partner: "There are a lot of M&A deals; a lot of outbound deals." The domestic market is also busy, with consolidation and restructuring the order of the day. "There are a number of local companies who are going to ground," says one partner. "It's fair to say that a lot of companies were set up in the wrong way. Now they're streamlining that down."

Another source of work is the establishment of new companies, which has been helped by the government's less stringent laws on ownership. "Now in the QFC [Qatar Financial Centre] you can own 100% of your company, which is very positive," says one partner. Although this only applies in sectors identified by the government as having the greatest need, it is still a positive sign for foreign investors.

Project finance work has remained steady, however firms have seen a change in the type of new projects being done. "People are being a lot more cautious," says one partner, "there are a lot of smaller infrastructure projects such as building new roads." Larger projects are still going ahead in the power generation and water areas where delay or cancellation is not an option. "If you want to see unrest, go to Doha without air conditioning in the summer!" explains one lawyer.

Economic diversification is also creating new work. "They don't just focus on gas and related interests, they've been diversifying their economy for a while," says one project finance partner, "It's been a very co-ordinated development system because it's a very small country."

Firms are also hopeful that continued economic diversification and greater market development could create new sources of work. "The legal market is mirroring the economy," says one partner. "The market was not very developed before a few years ago, but now that's changing." Another lawyer agrees: "I think we're seeing a broad practice opportunity for firms; we're also seeing private equity being done now."