WHY INVEST IN PALESTINE?
Palestine, with its strategic location and need for widespread infrastructure development is an untapped emerging market with enormous investment potential. The Palestinian economy is a market-based economy with the private sector playing the leading rolPIPA
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The Ministry of National Economy pays great attention to signing agreements and holding conferences to attract investors to invest in Palestine. The Palestinian Investment Law *Legislation* was amended at the end of 2014 with the aim of encouraging local and foreign investment in addition to preparing or amending a number of economic laws related to this issue. In view of the development of political events and what accompanied, Palestine opened the investment field in various economic sectors as stipulated in the Palestinian Investment Law No. “1” for the year 1998 AD, to encourage investment in Palestine, and this law is the legislative framework that guarantees Palestinian and non-Palestinian investors the necessary protection, and guarantees necessary for the invested funds, and it is easy for them to make their decisions in this regard. The law included many incentives and exemptions granted to investors. The law also stipulated the establishment of a public investment authority called the Palestinian Higher Authority for Investment Promotion, and this authority has an independent legal personality. economy in Palestine according to the targeted goals, programs and priorities. Source: Ministry of National Economy
10 Motivating Factors to Invest in Palestine
- Dynamic economy and annual economic growth: the Economic growth in Palestine reached 5.9% in 2012 along with annual growth in GDP while foreign investments scored 2.6% growth in 2012. the economic indicators showed a general growth in various economic indicators.
- Incentives Package Contract: that enables PIPA and Its Board of Directors to provide additional incentives for leading projects according to the sectors or the geographical location of the project.
- Palestine is a virgin land for variety of investments: Palestine is in the phase of building and expanding its production chain to meet the needs of the growing local markets. All the economic sectors represent a variety of investment opportunities.
- Infrastructure and communications network: Availability of competitive services in infrastructure particularly in wire and wireless communication networks in addition to well develop data systems.
- Qualified Industrial Zones: the Industrial zones strengthened the success of investment through offering services, advanced infrastructure and rewarding incentives for investments. In addition to the investment registration and licensing services to facilitate registering and launching the projects. There are many industrial zones in Palestine: (Bethlehem Industrial zone, Jericho agro-industrial zone, and Gaza Industrial City) .There are two industrial zones that are still in the construction phase (Jenin Industrial zone, Tarqoumia Industrial zone).
- Strategic location: Palestine is located in the heart of the world, linking Asia, Africa, and Europe: It is situated on the Mediterranean Sea and the Red sea, Palestine is a touristic attraction to many since it, has religious monuments, archaeological areas, warm weather, or the rich cultural heritage.
- Qualified labor force: Palestine has a wealth of well-educated and trained (skilled) labor force that represents 43.6% of its population.
- Suitable work environment: the legal environment, the availability of laws and regulations guarantee a healthy investment climate. The Palestinian government has put extensive efforts to provide the proper facilities and support investors through the establishment of the Palestinian Investment Promotion Agency (PIPA) to encourage investors to invest in Palestine by providing advice and support, as well as an after care strategy.
- Access to global markets: with more than 11 commercial agreements, Palestine has access to a number of wide spectrum markets, intra-regional trade treatments, simplified procedures and customs which ease accessing international markets, as well as the availability of preferential agreements for Palestinian products in the Arab world, consisting of 350 million consumers.
- Access to financing: variety of good financial systems, funding and lending, with easy and flexible financing programs responding to investor needs. Source: PIPA
List of Target Sectors
- The Industrial and agricultural zone of Jericho
- Gaza Industrial Estate
- Bethlehem Multi Disciplinary Industrial Estate
- Tarqumia Industrial estate
- Jenin Industrial Free Zone – JIFZ
- Future Industrial Estate
Privileges granted to investors
The Palestinian Investment Law does not exclude any Palestinian, Arab or foreign investor from enjoying its benefits, and the law enables investors to invest in any project from all economic sectors in Palestine.
Exemption from income tax, customs duties, and purchase tax imposed on machinery, equipment, and raw materials for a fixed period of five years, and a reduction in the percentage of taxes on net profits depending on the size of the project’s capital for an additional 20 years.
Granting additional exceptional exemptions to projects whose production is 25% or more intended for export, provided that the national added value in their products does not deviate from 30% of the total cost. The law approved additional incentives for agricultural projects intended for export.
The law ensures that the fundamental rights of the investor, regardless of his nationality, are not violated, as it prohibits the nationalization or confiscation of any investment regardless of his nationality, or any measure that deprives the investor of control over his project without his consent.
The non-Palestinian investor is granted the right of permanent residence in accordance with the laws in force, and this right is granted to technicians and experts working on the project. As for the Palestinian expatriate who submits a project in one of the fields, he gets a family unification and an identity card.
The law guarantees freedom of transfer without any restrictions on money, whether capital, profits, wages, etc., and complete freedom in the movement of hard currencies.
Projects enjoy guarantees and insurances against various non-economic risks.
The owner of the project benefiting from the provisions of this law has the right to sell the exempted fixed assets to another project with the same privileges, provided that the investment authority agrees to that.
If the project is transferred from one area to another, the project benefits from the new privileges of the better area.
All investments carry out their activities according to the license granted to them without discrimination based on gender, race, or religion, whether when employing local employees, or when purchasing their needs.
The law enables owners of small-sized capital to benefit from its advantages.
The Palestinian courts in the field of dispute resolution have the authority and jurisdiction, and any of the disputing parties has the right to refer the dispute to independent, binding arbitration.
The law enables to take advantage of Palestine’s special status, which provides global quotas in the markets to the investor in order to export his products to the American, European, and Arab markets without being subject to customs duties “the right of preference.”
Assistance in obtaining loans on concessional terms from lenders, assistance in obtaining information and statistics on production and markets, assistance and provision of municipal services.
Facilitate registration procedures from government departments without entering into government red tape. The law also facilitates the movement of investors inside and outside the country.
The law stipulates that the investment approval is valid for a period of six months from its date, and the right of the owner shall forfeit if he does not start implementing the project during that period, and the investment approval does not dispense with obtaining all licenses and other documents.
In order for the investment project to be approved, two conditions must be met:
Obtaining the necessary licenses from the concerned authorities.
The capital of the project must be no less than 100,000 dollars, to be spent on the purchase of fixed assets, except for the land and building, according to Article 23.
The owners of the project must own at least 1/3 of the general equity capital, while in ordinary companies and individual projects, the entire capital must be owned.
With regard to employment and employment:
A) Most of the workers in the project must be Palestinian.
b) The number of productive project workers shall not be less than 10 Palestinian workers.
c) Other projects according to their needs, provided that they are not less than 15 workers in the period of operation and production.
Conditions for obtaining approval:
An economic feasibility study for the project, if possible.
Registration of a company, partnership or commercial registry for the sole proprietorship.
Determining the public and private location, title certificates or lease contracts and necessary maps.
Bring catalogs and quotations for equipment, devices and machines.
The absence of a tax party or a financial clearance.
The necessary licenses from the competent authorities.
The project can be single, joint or mixed, depending on the ownership of the capital.
A private project with local Palestinian capital.
A project with joint Palestinian local capital.
Project with mixed capital Palestinian local and Palestinian expatriate.
A project with Palestinian and foreign capital.
A project with foreign capital on conditions.
Investment plan priorities:
All investments enjoy the incentives granted by law except for insurance business ventures. And real estate, except for development projects – banks, exchange companies, and any financial institution except for mortgage companies.
How to apply
- An application shall be submitted on an investment form for Palestinian expatriates in person or through an agent.
- The following documents shall be attached to the application:
a. A copy of the passport or document.
b. Birth certificates.
c. Visit permit, if any.
d. A feasibility study for the project.
e. Title deed or lease contract.
f. Certificates, degree, experience and knowledge.
g. Certificates proving financial ability to fund the project.
h. if partnership, “company registration extract”.