The Law on the Encouragement of Investment in Palestine No. (1) of 1998 and its amendments regulates investment in Palestine.

(Read more: Law on investment)

Incentives in Palestine include the following:

• Fixed assets are exempted from customs duties
• Spare parts important by the enterprise shall be exempt from customs duties provided that their value does not exceed (15%) of the fixed assets
• Investors may freely transfer all financial resources out of Palestine At the applicable market currency exchange rates in effect the time of transfer In a convertible currency acceptable to the investor
• Income tax (%0) for the Agriculture projects, industrial and tourism projects (5%) Up to Five years and 10% for 3 years, preceded by a grace period of a maximum of four years or until they generate a profit
• Investment that increases their production exports for more than (40%)
• Investment use (70%). Of the local content.
• Investments that employ additional at least 25 workers during the period of benefit
• No distinction between foreign or domestic investors

Read more about Support programs and Investment Incentives

Business Registration in Palestine:

Businesses should be registered at the Ministry of National Economy and the requirement differ based on the form of the company as follows:

Registration of Ordinary Company:

Fill (3 copies) of the company's registration form with the required data, signed by the partners in the presence of the Companies' Controller or Notary public. And attaching the following documents:

1. Choose a name for the company to be registered, fill it on the prescribed form used for verification of names and obtaining the approval in case the name is not identical with the name of another company on the register.
2. Fill 3) copies (of the company's registration form with the required data, signed by the partners in the presence of the Companies' Controller or Notary public.
3. Submit (3 copies) of the company's Articles of Corporation and company's By-laws prepared by an attorney registered at the Palestinian Advocate Syndicate and signed by the partners.
4. Submit copies of the shareholders' identity cards and an attorney's proxy.
5. Copies Identities Partners.

Registration of )Public/ Private( Shareholding Companies:

Fill )3 Copies( form Company Registration signed from Company Controller, or by Lawyer and attach the following documents:

1. Proxy attorney registered at the Palestinian Advocate Syndicate.
2. Copies Identities Partners.
3. Contract of establishment (3copies),Internal System of the Company (3copies), List of the partners.
4. Choose a name for the company to be registered, fill it on the prescribed form used for verification of names and obtaining the approval in case the name is not identical with the name of another company on the register

Registration of Foreign Shareholding Companies:

1. Obtain a work permit by the observer after the approval of the Minister.
2. Application for registration of a foreign company (3 copies) signed by the lawyer by the original company or Commissioner appointed by the Company under the authorization letter certified by the Palestinian embassy or the Palestinian representation in the country of the company.
3. Payment of fees

Attachments:

4.  Memorandum and an internal system of the original company certified by the Palestinian embassy or the Palestinian representation in the country of the company and whether the original contract language other than Arabic, are in addition to the translated legal translations and ratified by the Ministry of Justice and the State of Palestine.
5. Check and Registration Company Name
6. Approval of the Board of Directors appoints a representative for the company in the areas of the Palestinian Authority and the registration of a foreign company.
7. The company's last budget;
8. The names of the members of the Board of Directors and the nationality each of them

Registration of Non-Profit Companies

Fill Registration form of Non-Profit Companies and attach the following documents:

1. Establishment Contract.
2. Company Name including Non-Profit Company.
3. Company Address.
4. Company Capital.
5. Authorized signatory.
6. Names of shareholders and their Nationalities.
7. Any documents that Controller needs it to register company.
8. The Treatment of Non-Profit companies like private shareholding companies through procedures of registration and fees.

Registration of Civil Company

Fill Registration form of Civil Company and submit the following attachments:

1. Establishment Contract
2. Company Name including Civil Company
3. Company Address.
4. Company Capital.
5. Authorized signatory.
6. Names of shareholders and their Nationalities.
7. Any documents that Controller needs it to register company.
8. The Treatment of Civil Company like Ordinary companies through procedures of registration and fees

Registration of Holding Company

Fill 3 Copies from Company Registration Application signed from Company Controller, or by Lawyer and submission of the following attachments:

1. proxy attorney registered at the Palestinian Advocate Syndicate if not signed by the partners.
2. Copy of Partners ID
3. Establishment Contract
4. List of founders name
5. Check and Registration Company Name.
6. The Treatment of Holding Company like Public companies through procedures of registration and fees

Read more: Registering a Business in Palestine

Corporate Income Tax Rate 

Palestinian companies and businesses are primarily subject to a 15% tax on income, Excluding telecommunication companies and pure monopolistic companies in the Palestinian marketwhich is primarily subject to a 20% tax on income. Losses, equipment depreciation, and business expenses are also factored into the calculation of taxes

Individual Income Tax Rates

If the annual income of the individual taxpayer is below the low-income tax-exempt status (adjusted annually), the taxpayer is exempt from filing an annual tax report.

Value Added Tax (VAT):

• Large companies employing more than one employee with annual sales in excess of U.S. $50,000 pay 16% VAT. Companies that fall under this category can issue a VAT invoice.
• Small companies employing more than one employee and whose annual sales do not exceed U.S. $50,000 pay 16% VAT. Small companies do not have the right to issue a VAT invoice. 
• Companies with annual revenues that do not exceed U.S. $12,000 are exempt from VAT payments. These companies must declare their sales, on a self-assessed report, at the end of the tax year.
• Financial institutions, such as banks and insurance companies pay a 16% VAT on employee salaries each month, and a 16% VAT on profits generated semi-annually or annually. 
• Non-profit organizations are exempt from paying VAT.
• Importers pay 16% VAT on the value of imported goods. This may be deducted as input tax when the VAT is declared to the VAT administration.

(Read more)

The labour Law no. 7 for the year 2000 regulates the labour market in Palestine:

Read more about The text of the law

• Minimum wage:  1,450 NIS (437 USD). (Read more)
• Probation Period :  Three months.
• The legal duration of working time: 45 hours per week.
• Friday is the official non-working day unless the nature of the work requires otherwise.
• Annual leave: two weeks per year.
• Maternity leave: ten weeks.
• The percentage of disabled workers shall not be less than 5% of the total labour force in the installation.