1. Overview
   1. What is the main legislation and international treaties governing the project financing in your jurisdiction?
      
      There is no specific legislation and international treaties that governs project finance, per se. Provisions that deal with aspects of project finance arrangements may be picked up from, inter alia, Law No. 22 of 2004 (“Civil Code”), Law No. 11 of 2015 (“Commercial Companies Law”), Law No. 27 of 2006 (“Trade Law”), Law No. 13 of 2012 (“QCB Law”), and Law No. 8 of 2012 (“QFMA Law”), Law No. 16 of 2021 (“Movable Assets Security Law”), Law No. 12 of 2020 (“PPP Law”) along with the other legislations. 
   2. How mature is the project finance market in your jurisdiction, and what are the most significant project financings closed during the last 12 months?
      
      It is relatively mature considering the development of large-scale energy, oil and gas, infrastructure, construction, leisure and hotels, etc. projects that have been carried out in the past decade in preparation for hosting the FIFA World Cup Qatar 2022™, and which are currently being carried out to achieve the Qatar National Vision 2030. 
      
      In Qatar, there is no official platform or source that publishes reports pertaining to project financings that have been closed. 
2. Security Interest
   1. What are the most commonly used security types in project financings in your jurisdiction? 
      
      Based on our experience, the form of the assignment of contractual rights such as receivables in favor of a lender is the most commonly used security type. Mortgages of real estate, bank account pledges, LCs, bank guarantees, PCGs are also common in the Qatari market. 
   2. Can the shares of a company be pledged as a security to the benefit of lenders? If so, is there a specific requirement in terms of formalities or procedure to be followed for establishing or perfecting a share pledge?
      
      Yes. 
      
      Pledge of Shares of Companies not Listed on the Qatar Stock Exchange (“QSE”)
      
      We set out below the steps required for registering a pledge of shares of a company in the Commercial Register at the Ministry of Commerce and Industry (“MOCI”):
      
      An application to pledge the shares of the company should be submitted to the MOCI. Along with the application, a shareholder’s resolution unanimously approving the registration of the pledge, a letter from the chairman or vice-chairman or delegated member requesting the registration of the pledge with the approval of the Corporate Affairs Department at the MOCI should be submitted for joint-stock companies, a letter from the pledgor consenting the registration of the pledge, copies of IDs of partners, authorised signatories and the applicant, should also be submitted. 
      
      After obtaining MOCI’s approval, a request to attest the shares pledge agreement would need to be submitted online to the Attestation Department of the Ministry of Justice (“MOJ”) via SAK Portal (an e-services platform of the MOJ that provides, among other things, registration and authentication services) (“SAK Portal”). Information including the relevant parties (i.e., the pledgor and pledgee), contract details (i.e., commercial registration number, company name, P.O Box number, telephone number, expiry date, pledge period from, pledge period to, pledge value, MOCI’s approval, etc.), proof of shares ownership, is required.
      
      Pledge of Shares of Companies Listed on the Qatar Stock Exchange 
      
      The registration of the pledgee (the natural or legal person to whom the shares are pledged) with the Qatar Central Securities Depository (“QCSD”), an entity established by the Qatar Central Bank, is required. Foreign banks are also permitted to register pledges over shares of companies listed on the QSE.
      
      As per the procedural guide issued by QCSD, which sets out the procedures for pledging securities (including shares), a shareholder (pledgor) should submit to the pledgee a pledge application relating to those shares to be pledged. The pledge application should include the following documents:
      
      For individuals:
      
      A pledge contract attested by the Attestation Department at the Ministry of Justice;
      A copy of the ID of the pledgor;
      In the case of minors, a copy of the minor’s birth certificate and a copy of the guardian’s ID; and
      Where a power of attorney has been issued, the pledge application should also include a true copy of the valid power of attorney authorising the attorney to pledge the shares, and a copy of the attorney’s ID.
      
      In the case of companies:
      A true copy of a valid Commercial Registration (“CR”) and Establishment Card of the pledgor; and 
      A document evidencing the approval of the pledge by all of the partners listed on the CR, or a document authorising a single representative to act on behalf of the partners. 
      
      Where the pledgor company is a shareholding company, the pledge contract should be signed by the chairman or all members of the board of directors, or by a representative authorised to act on their behalf.  
      
      Further, the pledgee must submit a letter to the QCSD requesting the pledge of those shares that are identified in the pledge contract. The letter should be signed by the authorised signatories, stamped by the seal of the entity, and should include the number of securities to be pledged, the company name if applicable, and the shareholder’s number. The application should be accompanied by the shareholder (pledgor) approval on the pledge, an ID copy, and a copy of the pledge contract, if applicable.
      
      Upon request of the pledgee and with approval of the pledgor, the QCSD will then register the pledge details on the electronic record of the company and will inform the pledgee of the same once the process is completed. 
      
      If the shares to be pledged appear in the shareholder’s account that is managed by a QCSD trading member, the trading member should be contacted to arrange for the return of the shares to the shareholder’s account to complete the pledge. If the relevant shares are being traded in the market, the system will only approve the pledge once the trading member cancels the selling order.
      
      The pledged shares will be released upon the pledgee’s request under an official letter signed and sealed by the pledgee, accompanied by the following information: 
      
      The number of shares to be released; 
      The name of the shareholder (pledgor);
      The shareholder’s (pledgor) number; and
      The payment of fees for each pledge release.
      
      Note: Under Article 24 of the PPP Law, the shares of the project company (i.e. a company established by virtue of the PPP Law) may not be pledged for any other than the purpose of financing or refinancing the partnership project, any action to the contrary shall be null and void.
   3. Is private sale a recognized method for the enforcement share pledge? What are the endorsement types typically used for the share certificates? 
      
      No. In Qatar, enforcement of share pledge may only be carried out through court proceedings. Article 247 of the Trade Law prescribes that “any agreement concluded at the time of the mortgage decision or after the decision shall be invalid. In the event of failure to pay the debt at maturity, the mortgagee shall have the right to own the mortgaged property or sell the same without reference to the procedures set out in Articles 241 to 243 herein. However, after the debt or an installment thereof becomes payable the creditor may agree with his debtor that the mortgaged property or part thereof may be credited against the debt, and the court may order that the mortgagee owns the mortgaged property or part thereof in payment of the debt provided that its market value is estimated by an expert.”
   4. Can security interest be established over future assets, rights and receivables of the borrower? 
      
      Yes. This can be contractually arranged by entering into assignment of rights legal instruments.
   5. What are the steps to be taken by the lenders to enforce their security interest, in case the borrower becomes insolvent, is technically insolvent and/or commences composition process?
      
      As per Articles 606 et seq. of the Trade Law, any creditor, can request from the competent court to issue judgement declaring the debtor as bankrupt in the event the latter ceases to pay its commercial debts. The creditor may request declaring the bankruptcy of the debtor by the normal procedures of filing a lawsuit. Where urgency is called for, an order on petition may be submitted to the President of the Court containing evidence of the failure to pay and the grounds for urgency.
   6. Is security trustee concept enforceable in your jurisdiction? If not, is an alternative mechanism, such as a parallel debt, available?
      
      Yes. A security trustee concept is recognized and enforceable in Qatar.
3. Incentives and Restrictions 
   1. What are the main incentives and exemptions for project financing in your jurisdiction? 
      
      Pursuant to Article 36 of Law No. 24 of 2018 (“Income Tax Law”), an application for a tax exemption may be made for certain projects that are considered to be strategically significant to the Qatar economy. The exemptions are generally granted for a period of five or ten years. Applications for an exemption are assessed based on certain criteria set out in the Qatar tax law.
      
      Other than the mainland, there are two special jurisdictions in Qatar that provides for tax exemptions subject to fulfilling certain criteria, these are the Qatar Science and Technology Park (“QSTP”) and Qatar Free Zones (“QFZ”). For example, entities set up in the QFZ can benefit from 20-year tax holiday. 
   2. Are there any incentives or exemptions specifically applicable to foreign investors?
      
      Yes. Please see our response to question 9 above. 
   3. Are there any restrictions for borrowing bank loans and shareholder loans from abroad and/or in a foreign currency? 
      
      No. We do not foresee any legal impediments in this regard. 
   4. Are there any restrictions for foreign investments in your jurisdiction?
      
      Yes. Law No. 1 of 2019 (the “Foreign Investment Law”) and its Executive Regulations No. 44 of 2020 (the “Executive Regulations”) contemplate that foreign investors’ can hold up to 100%, of the shareholdings in Qatari company. Under the Foreign Investment Law and Executive Regulations, the following sectors are excluded: professional firms (e.g., engineering and law firms), banks, insurance companies, commercial agents, and any other industry as decided by the Council of Ministers. 
      
      We understand that the Ministry of Commerce and Industry (the “MoCI”) is considering applications on an ad hoc basis and, accordingly, there remains uncertainty as to what commercial activities the MoCI will permit to be conducted by a 100% foreign owned Qatari company and whether any conditions or restrictions might apply.
      
      Companies established in the Qatar Financial Centre, QSTP or the QFZ can be 100% foreign owned. 
   5. Is there any minimum equity requirement, under the legislation or in practice, for project financings in your jurisdiction?
      
      No. It depends on the requirements of the bank (i.e., lender)
   6. Please explain the registration and filing requirements which are applicable for project finance documents to be valid and enforceable in your jurisdiction.   
      
      Finance documents are not required to be registered or filed in Qatar in order to be valid and enforceable. 
4. Insurance
   1. Can local insurance policies be governed by a foreign law?
      
      There is no specific legal provision that prescribes the obligation that local insurance policies should be governed by local laws. However, the insurance sector is regulated in Qatar and insurance and reinsurance companies and transactions are dealt with by the Civil Code, Trade Law and QCB Law. Under Article 95 of the QCB Law, it is not permissible to insure outside the State on funds or properties located within the State or on responsibilities arising therein, and it is not permissible to mediate insurance on these funds, properties or responsibilities except with one of the authorized and companies subject to this law. 
      
      Further, Article 103 of the QCB prescribes that insurance and reinsurance companies are obligated to obtain QCB’s approval on the forms of insurance policies that they wish to issue, as well as on every amendment that occurs to them.
      
      In light of the foregoing, and based on our experience with the authorities and regulators in Qatar, we find it very difficult, if not impossible, that the QCB approves that local insurance policies be governed by a foreign law.
   2. Can insurance proceeds under the insurance and reinsurance policies be assigned to the benefit of the lenders?
      
      Yes. We do not foresee any issues in this regard.
   3. Is there any legal background for cut-through provisions under the insurance policies in your jurisdiction? 
      
      Yes. Article 798 of the Civil Code reads as follows:
      
      “1. If the insured thing shall be subject to a possessive mortgage or a security mortgage or any other kind of in-kind securities, such rights shall be transferred to the compensation due to the debtor by virtue of the insurance contract.
      
      2. If those rights have been publicised or notified to the insurer, even if with a registered letter with an acknowledgment receipt, he shall not be entitled to pay whatever is due by him to the insured except with the creditors consent.
      
      3. If the thing insured had been attached, or was placed under receivership, the insurer shall not be entitled, if notified in the manner provided for in the preceding paragraph, to pay the insured anything of what is due by him.”
      
      Further, Article 799 of the Civil Code reads as follows:
      
      “1. If, before the lapse of the contract period, the insured has become bankrupt, the insurance shall remain for the interest of the group of creditors, which shall become indebted towards the insurer with all the premiums that shall become due from the date on which the judgment of bankruptcy has been delivered, and each of the two parties shall be entitled to terminate the contract, within three months commencing on that date, through a registered letter with an acknowledgment receipt, and the insurer shall, in the case of termination, return to the group of creditors the part of the premium to which he has not undertaken any risk.
      
      2. If the insurer has become bankrupt, the operation of the contract shall stop from the day on which the judgment of bankruptcy has been delivered, and the insured shall be entitled to recover the part of the premium which he has paid for the period during which the contract has stopped.”
   4. What are the other complications, concerns or other issues in relation to the insurance provisions under the project financing documentation, if any? 
      
      We do not foresee any issues.
5. Financing of Public-Private Partnership (PPP) Projects
   1. Is PPP a permitted method of developing projects, and if so, have any PPP projects been developed to date in your jurisdiction? 
      
      Yes. PPP is a permitted method of developing projects and is regulated by the PPP Law. In Qatar, there is no official platform or source that publishes reports pertaining to PPP projects that have been developed to date in Qatar.
   2. Are direct agreements between the public authorities and the Lenders permissible under the local law, and if so, commonly seen in the Project Finance market in your jurisdiction? 
      
      No. However, indirect agreements can be carried out pursuant to Article 20 of the PPP Law which stipulates that the project company may, after the approval of the contracting party and the provision of sufficient guarantees, obtain a loan from banks operating inside or outside the State by guaranteeing its contractual rights and assets.
      
      Further, quasi-governmental entities or companies that are mostly established by virtue of the Commercial Companies Law can enter into direct agreements with lenders. 
   3. Please indicate the types of host government supports (including treasury guarantee, debt assumption etc.) available in your jurisdiction.
      • Government Bonds are considered as one of the major government debt instruments used by the government to provide the necessary liquidity for projects funding. They are considered one of the monetary policy instruments and low-risk investment instruments as well. These are issued with medium to long-term maturities. 
      • Treasury Bills (T-Bills) are government debt instruments issued with maturities ranging from 3 months to one year. T-Bills are known as low-risk financial instrument, i.e., they are easy to operate without causing any capital loss to their holders. T-Bills are usually sold at discount , i.e. at lower price than its nominal value. Upon maturity, the government is committed to pay the nominal value of those T-Bills. They are considered as one of the monetary policy instruments for domestic liquidity management.
      • Sukuk are considered as one of the major government debt instruments used by the government to provide the necessary liquidity for projects funding. Sukuk are considered one of monetary policy instrument and low-risk investment instruments as well. These instruments are issued with medium to long-term maturities.
      • Debt assumption is also available in Qatar. For example, under Emiri Decree No. 61 of 2020, the Government of Qatar gauranteed the financial obligations arising from the loans and financial facilities agreements executed by Qatar Airways with banks and financial institutions. 
   4. Are political risk events usually under the responsibility of the public party or the private party under the PPP agreements?
      
      It should be agreed to by the public party and the private party in the PPP agreement. Article 17 of the PPP Law prescribes that the PPP agreement must include, inter alia, types and amounts of project insurance, the risks of its operation or exploitation, execution guarantees issued in favor of the contracting party, and provisions and procedures for recovering them. It should also determine the bases for distributing risks associated with amending laws, sudden accidents, or force majeure, and the prescribed compensations, as the case may be.
   5. Are investors and lenders usually protected against a change in law passing subsequent to the signing of the relevant concession agreement?
      
      Yes, provided that the provisions of the new law relate to public policy. Article 3(2) of the Civil Code prescribes that the effects of acts shall remain subject to the law applicable at the time on which it was concluded, unless the provisions of the new law relate to public policy, it shall then apply to such effects after the date on which it becomes effective.
   6. Is force majeure specifically regulated under the local legislation?
      
      There is no expressly specific definition of force majeure in the Qatari legislation, however the force majeure principle is recognized in the Civil Code. Article 188 of the Civil Code reads as follows:
      
      “1. In the contracts which are binding on both parties, if the performance of the obligations of one of the contracting parties becomes impossible for a extraneous cause beyond his control, this obligation shall extinguish together with its corresponding obligations. The contract shall be per se dissolved.
      
      2. If the impossibility is partial, the creditor as per the circumstances may depend on the contract with regard to the remaining obligation which can be performed, or request the dissolution of the contract.”
      
      Further, Article 402 of the Civil Code reads as follows:
      
      “The obligation shall be extinguished if the debtor proves that its performance by him has become impossible for an extraneous cause beyond his control.”
   7. What are the general environmental and social requirements in project financings?
      
      In addition to the international treaties that relates to the environmental protection that Qatar is a party to, such as the United Nation Framework Convention on Climate Change (UNFCCC), Vienna Convention for the Protection of the Ozone Layer (1985), etc., Article 6 of Law No. 3 of 2002 (“Environment Protection Law”) provides that “all administrative and private agencies are obligated to include the condition of protecting the environment and combating pollution in all local and foreign agreements and contracts whose implementation may result in harmful effects on the environment. These contracts must include penalty clauses and undertakings to pay the costs of removing environmental damage and compensation therefor.”.
6. Jurisdiction, Waiver of Immunity
   1. Are submission to a foreign law and the waiver of immunity provisions enforceable? 
      
      Yes. Qatari law upholds the general principle of sanctity of contracts. Article 171 of the Civil Code describes the contract as the law of the contracting parties. Qatari law respects the will of the parties and enforces their agreement to the extent that it is neither prohibited by law nor conflicts with the public order in Qatar.
      
      Additionally, Article 38 of the Civil Code provides that for a court to apply a foreign law, the relevant law must not violate public order and morals in Qatar. In such case, the court will apply Qatari law.
   2. Can financing documents provide for arbitration clauses?
      
      Yes. There is no legal impediment in the Qatari legislation that precludes incorporating arbitration clauses in financing documentation. 
      
      It is worth mentioning that the State of Qatar is a party to the New York Convention and does recognize arbitral awards and enforce them pursuant to the New York Convention and the procedures set forth in Law No. 13 of 1990 (“Civil and Commercial Procedures Law”) as amended by Law No. 2 of 2017 (“Civil and Commercial Arbitration Law”). 
7. Trends and Projections
   1. What are the main current trends in project financings in your jurisdiction?
      
      Qatar is expecting to host, amongst other events, AFC Asian Cup 2023, Formula 1 Qatar Grand Prix 2023 Expo 2023 Doha; Category A1 International Horticultural Exhibition, and the 2030 Asian Games. 
      
      To accommodate the various upcoming events, PPP entities, governmental-owned companies and private companies are generally conducting studies and analysis, and approaching local and international banks and other lenders to fund major projects based on several project financing structures. 
      
      Project finance is currently being utilized for, amongst others, large-scale energy, oil and gas, infrastructure, construction, telecommunications, and more specifically, leisure and hotels projects.
   2. Are any significant development or change expected in the near future in the project finance market?
      
      We are not aware of any expected changes in the project finance market in the near future. 
   3. What are the alternative reference interest rates which are being commonly used in your jurisdiction during the LIBOR transition period?
      
      Secured Overnight Financing Rate (SOFR). 

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