Qatar's rapid financial growth is making the Gulf state a force to be reckoned with. David Dhanoo reports

In 1995, when my company moved to One Canada Square, the legal department had the accolade of being the highest team of lawyers in the land – at least altitude-wise – from the rarefied air of its offices on the 36th floor of the Canary Wharf Tower.

In the vicinity, the emergence of the Docklands Canary Wharf area as the new financial hub of London was only just beginning and, while not quite a ghost town, the number of banks, insurance companies, other financial services institutions and ancillary services providers were starting to trickle in.

By 30 November, 2001, and the coming into force of the Financial Services and Markets Act, the base of the single merged regulator, the Financial Services Authority (FSA), was firmly rooted in Canary Wharf along with many other major financial services companies, with the big UK and US law firms following in close pursuit. Today the place is bustling and the bright lights of the main and sister towers shine throughout the night.

As general counsel of an Allianz group insurance company and having been through the big changes brought about by the new FSA legislation and having successfully navigated two 'arrow' visits, I decided to seek fresh challenges. By the beginning of April 2007 I found myself as deputy chief legal officer of the Qatar Financial Centre (QFC) Authority. From my office on the top floor of the new QFC Tower opposite the City Centre in Doha I felt a sense of deja vu; was this the Canary Wharf of the Middle East?

The QFC was established on 1 May, 2005, to provide a world-class environment for financial institutions and related businesses to participate in the vibrant economic growth of Qatar and be able to conduct business regionally and globally. Some of the golden threads that are sewn into its constitution and objectives are the establishment of a leading financial centre which acts in accordance with and promotes international best practice. The QFC has done just that, and by 9 August, 2007, it had attracted 55 firms, including eight of the top 25 global banks, seven of the top 25 investment banks, seven of the top 25 asset managers, seven of the top 25 private banks, two of the top three global insurers and the number of applications continue to roll in. From 'ready for business' like Canary Wharf was in 1995, the QFC is now forging ahead to new heights.

While there are many established and newly announced financial centres in the Gulf Co-operation Council region and while the region may currently be led by the offshore wholesale financial free zone of the Dubai International Financial Centre established in 2004, the QFC is not far behind and offers some unique selling points as an onshore financial centre, including:

- a robust financial regulatory environment enjoying the full support and commitment of the Council of Ministers;

- an independent QFC Regulatory Authority that is trusted, fair, robust and modelled on best international standards;

- a similarly independent legal environment with the Civil and Commercial Court headed by Lord Woolf and the Regulatory Tribunal headed by William Blair QC, all operating separately from and parallel to Qatari state laws;

- governance standards, reporting, transparency, prudential regulation and an overall principles-based approach which is aligned to the UK FSA regime and wider global standards;

- licensed firms are able to provide a wide range of financial services in banking, insurance and investment business. The list of regulated and non-regulated activities is comprehensive and firms can deal onshore by participating in the vibrant local economy and in local currency. While retail banking is not currently permitted, firms are not confined to doing wholesale business;

- the strength of one of the world's fastest-growing economies fuelled by huge hydrocarbon reserves offers a unique business opportunity for firms. This is coupled with a country which many describe as an oasis of political stability;

- the location of licensed and regulated firms are not constrained by geographical area and have the flexibility and choice to use the convenient and efficient 'plug and play' premises managed by the QFC Authority, or obtain their own offices;

- the laws allow 100% ownership by foreign companies and all profits may be repatriated;

- the QFC environment operates its own immigration and employment laws with minimum restrictions; and

- to crystallise its commitment to ensuring that all financial institutions in Qatar operate in a high quality legal and financial services environment benchmarked to international standards, the Government announced in July 2007 that Qatar will establish a single integrated financial regulatory body that will oversee all banking, insurance, securities, asset management and other financial services. This newly-merged regulator will bring together the Qatar Central Bank Department of Banking Supervision and its Banking Consumer Services Unit, the Qatar Financial Markets Authority, which regulates the securities sector and the QFC Regulatory Authority. This new fully independent and integrated regulator will be established by early 2008 and full merger and transition with a common set of rules will be achieved by 2010.

With 18 years' post-qualification experience as an English-qualified lawyer, and having decided on the move from London to Doha, I was pleasantly surprised that the content and principles behind much of the QFC Regulations and Rules had a very familiar and comforting feel. While the encyclopaedic proportions of the FSA Rulebook had been condensed into more manageable volumes, like me, legal and compliance professionals advising incoming firms will be able to vouch for many similar rules and regulations. The legal construct now include the Financial Services Regulations and the whole range of prudential rulebooks as well as important commercial supporting legislation such as company, contract, data protection, immigration, employment and trust legislation to name a few. More legislation is in the pipeline to complete the suite of first-rate legislation.

From a macro-economic perspective Qatar is one of the fastest-growing economies in the world with gross domestic product (GDP) growth of 9.4% and one of the highest per capita GDP ($41,103 in 2005) in the world.

In the project finance sector Qatar was the second-largest project-financed country in the world, after the People's Republic of China, in the whole of 2005. With the large accumulation of profits and the burning desire to diversify assets, M&A activity is growing steadily along with asset management where public and private equity funds are fuelled by surplus government and individual wealth. In addition to providing a gateway to tap into regional opportunities, Qatar is in its own right a honeypot for banking, insurance and other financial services business.

With all of these positive and unique attributes of the QFC, incoming firms can expect to find a 'one-stop shop' streamlined application process that is simple, easy and integrated. A single application determines the application for Company Registration Office incorporation of a company or registration as a branch, assesses the application for a QFC Licence from the QFC Authority and determines the application for QFC Regulatory Authority authorisation to conduct regulated activities. Each application depends upon the scale and complexity of the firm's business as well as the timely submission of information and responses to requests for any further information, but generally there is a three-month processing timeline. There is a structured approach involving a continuous cycle of risk assessments and a supervisory plan, which is applied by fostering close relationships with the senior management of the firm, interfacing with the firm's home country regulatory supervisors as well as desk-based and on-site personal visits to ensure the maintenance of financial stability of the QFC and its licensed and regulated firms.

Many commentators have opined that with so much investment and resources with natural gas, a government committed to spending significant amounts on developing its infrastructure and economy, its streamlined bureaucracy-free approach and its recent announcement for integration into a single robust and independent regulatory, Qatar has a very bright future indeed. The skyline of Doha is rapidly changing and from my perspective, Doha is the new Canary Wharf of the Middle East and I am excited and privileged to be part of its continuing development.

David Dhanoo is deputy chief legal officer at the Qatar Financial Centre Authority.