The Qatar Financial Centre (QFC), headquartered in Doha, Qatar, has unveiled a new regulatory framework designed for managing and fostering digital assets.
The QFC’s governing bodies, the Qatar Financial Centre Authority (QFCA) and Qatar Financial Centre Regulatory Authority (QFCRA) introduced this framework to lay a solid foundation for digital assets within the QFC.
The new regulations cover tokenization processes, legal recognition of property rights associated with tokens and their underlying assets, custody arrangements, and transfer and exchange protocols. Additionally, the framework includes provisions for the legal validation of smart contracts.
Similar to the free economic zones in the UAE, which operate autonomously from the mainland, the QFC maintains its own distinct legal, regulatory, tax, and business environment separate from the rest of Qatar.
The QFC allows 100% foreign ownership and full repatriation of profits. It also imposes a competitive 10% corporate tax rate on locally sourced profits.
Supporting Qatar’s digital evolution
The QFC stated that this framework will enhance the security, transparency, and adherence to international standards within the QFC’s digital asset ecosystem. It aims to set benchmarks for asset tokenization and foster trust and confidence among consumers, service providers, and stakeholders.
Qatar Central Bank Governor, His Excellency Sheikh Bandar bin Mohammed bin Saoud Al Thani, described the new regulations as a key milestone in achieving the country’s “Third Financial Sector Strategy.” He anticipates that the framework will unlock substantial opportunities within Qatar’s financial sector.
Launched in November 2023, Qatar’s Third Financial Sector Strategy seeks to establish a capital market to unlock economic potential and incorporate emerging technologies to drive digital transformation.
The digital assets framework resulted from extensive collaboration with industry stakeholders. The QFC developed it with input from an advisory group consisting of 37 domestic and international organizations across finance, technology, and legal sectors.
Since the Digital Assets Lab’s inception in October 2023, the QFC has onboarded over 20 startups to develop, test, and commercialize their products and services.
