Business Operations
Industry and Market Structures
Market Structure
Business Support Organizations
Industry and Market Structures
The industrial sector in Palestine is in transition. Most industrial
entities are privately owned and employ fewer than 10 workers.
The sector as a whole remains small in relation to aggregate economic
activity. Despite this, many Palestinian manufacturing enterprises
are actively engaged in the process of upgrading the performance
of their operations. Installations of management information systems
and work towards ISO9000 certification increased by more than 200%
between the years 1998 and 2000. The principal products of the
Palestinian industrial sector are textiles, food and beverage,
stone and marble, pharmaceuticals, footwear and leather products.
Palestinian GDP
The services sector accounts for the largest
amount of economic activity in Palestine. Historically, the services
sector has been
comprised mostly of private businesses. Government institutions
have not played a large role in the provision of services to
the population. The major service segments are tourism, transportation,
financial intermediation, and computer-related industries such
as hardware, software and network support.
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Market Structure
Business operations in Palestine are concentrated on the consumer
market and the majority of enterprises are family-owned and operated.
The Palestinian market is geographically divided between the West
Bank and Gaza Strip, which creates obstacles to efficient distribution
of goods. At present, both internal and external producers of goods
and services rely heavily on local agents and distributors to facilitate
the movement of products to meet market demand.
Palestinian consumers are becoming increasingly selective in their
buying habits, due to the increased variety of goods available
now as compared to recent years. While the market remains highly
price-sensitive, the overall level of consumer awareness and the
demand for quality goods has risen, and continues to do so.
Advertising remains relatively inexpensive in Palestine, and its
role in raising consumer awareness is growing. Low costs make it
feasible for advertisers to utilize all available media for marketing
campaigns, such as newspapers, billboards, radio and television.
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Business Support Organizations
Many organizations exist to provide service support to private
sector firms including the chambers of commerce, industry and
trade associations, and consulting firms.
Such organizations are active in gathering market data, conducting
workshops and training, while providing a contact point for business
people seeking investment opportunities.
One of the most active trade organizations is the Palestinian
Trade Center (Paltrade), which was established to focus on private
sector development. The organization was later merged with the
Palestinian Trade Promotion Organization to expand efforts to promoting
trade and export. Paltrade plays an essential role in policy analysis,
trade development and gathering relevant market data for its members.
Below are some keyr business organizations in Palestine.
Please refer to our Business & Industry
Database for contact information, or contact
us for more information.
Pal Trade
The Palestine Trade Center
(Pal Trade) is a national, non-profit,
fully private sector, membership - based organization. It operates
through offices in the West Bank and Gaza Strip and has strong
market networks worldwide. Pal Trade is the first point of contact
for external trade organizations seeking to establish linkages
with the Palestinian private sector.
Chambers of Commerce
The Chambers of Commerce & Industry in Ramallah and El - Bireh
District aims at organizing, representing, defending and promoting
commercial & industrial interests, together with setting up
close relations with local and foreign Chambers. The Chambers’ main
focus is on enhancing economic and productive activities, and
particularly emphasizes strengthening relationships among its
members.
Some of the Chambers’ functions:
• Accrediting Certificates of Origin for goods of commercial, industrial
and agricultural manufacturing, together with accrediting
all other Certificates that the Minister of Commerce and Industry
permits or requires.
• Accrediting the data and credentials of individuals and commercial
companies when requesting a commercial record, or asking
for its renewal or its amendment.
• Working on offering a special cadre of qualified, efficient and
capable persons who are able to shoulder the responsibility
of administering specialized departments.
Tahkeem
The Center for Settlement of Commercial Disputes was established
in 2002 pursuant to the Arbitration Law. Tahkeem is the first Palestinian
center specialized in offering arbitration and mediation services
to the business community. The center has two main branches; one
in Ramallah and one in Gaza.
Industrial Free Zones
An Industrial Estates Authority has been established,
by the Palestinian Authority, to encourage investment and administer
Free Zones in the West Bank and Gaza.
Industrial Free Zones (IFZ) are extraterritorial customs and duty-free
areas established with the aim of attracting direct foreign investment
and joint ventures in export-oriented manufacturing activities.
Industrial Estates are geographically defined areas designated
to serve a number of businesses that carry out industrial activities
and services.
The Palestinian Industrial Estates and Free Zones Authority (PIEFZA),
[link to website] which manages the industrial estates and free
zones program, provides a full range of services for those projects
which are going into their properties. PIEFZA will coordinate all
permits, licenses and official registrations needed to begin operations
with the relevant government ministries and institutions, and will
complete the process in a period of no more than six weeks.
The first operational industrial estate, the Gaza Industrial Free
Zone Estate (GIE), has a total area of 480,000m2 and is fully equipped
with advanced infrastructure facilities including road networks,
modern utilities, maintenance facilities, and sewage and disposal
treatment plants. It has its own standby power plant, in addition
to the national electrical grid system and advanced water, telecommunications,
and sewage networks. Support facilities in the GIE include vocational
training centers, banking services, postal services, private customs
clearing centers, and shipping, forwarding and employment services.
All of these facilities are expressly dedicated to helping investors
conduct business in a smooth and efficient manner.
Incentives and Exemptions Enjoyed by Foreign and Local Companies
Established in Free Zones
• Goods imported into the Free Zone are exempt from customs duties,
import fees and sales taxes. Goods exported from Free Zones are
exempt from all taxes and fees as well.
• Exemption of products produced within the Free Zone and offered
for consumption in the local market are exempt from customs, taxes
and fees. The level of exemption is determined by the cost of inputs.
• Buildings constructed in Free Zones are exempt from licensing
fees and real estate taxes.
• Invested capital and profit earned can be freely repatriated.
• Foreign currency can be freely transferred.
• All profits are exempt from income and social service taxes
for a period of 12 years from commencement of operations.
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