In this law, the following words and expressions shall have the meanings shown below, unless the context otherwise requires:
The Authority: The Palestinian National Authority.
The Agency: The Palestinian Higher Agency for the Encouragement of Investment.
Investor: Any natural or legal person seeking or offering to invest in Palestine.
Investment: Creation or addition of economic (production, industrial tourist, agricultural, medical, educational, productive, construction services) in Palestine, including :
( A public agency known as “The Palestinian Higher Agency for the Encouragement of Investment” shall be established under the provisions of this Law. It shall be an autonomous body corporate and shall report directly to the President of the Authority. The headquarters of the Agency shall temporarily be located in the city of Gaza, and its Board of Directors may establish branches or offices in side or outside Palestine.
( The Agency shall be concerned with encouragement of investment so as to ensure implementation of the Palestinian development needs in accordance with the objectives, priorities, and policies set by the Board.
The Agency shall be managed by a Board of Directors composed of fifteen members under the chairmanship of the Minister of Economy and Trade - Industry.
Membership shall consist of following :
Other ministries and agencies shall be represented by undersecretaries or general directors. Membership shall be for a renewable term of three years. If the seat of a member of the Board of Directors falls vacant, whoever has the right to appoint such a member shall appoint a substitute for the remainder of the term of membership.
The Agency shall be chaired by the representative of the Ministry of Finance in the absence of the Agency’s chairman
To direct investments according to the approved priorities and policies based on the Palestinian economic need and in cooperation with the Ministry of Economy and Trade-Industry, and other concerned ministries.
To formulate and develop information packages to inform the Investor about available opportunities and to promote such opportunities by various mass media.
To formulate suggestions and to improve and develop this law when necessary.
To collect, coordinate, and publish studies on the encouragement of local, Arab and foreign capital investment in various projects, and to contact agencies for the promotion of investment.
To hold economic conferences and invite Palestinian, Arab and foreign investors participate.
a) Decisions of the Board of Directors shall be adopted by a majority vote of those present. The Chairman shall have the deciding vote in the case of a tie. The quorum of the Board's meeting shall be the presence of two-thirds of the number of members.
b) The Board of Directors shall meet at least once a month whenever so required at the convocation the Chairman, or at the request of one-third of the members.
c) The Chairman or any other member of the Board of Directors shall not participate in any decisions related directly or indirectly to the interests of that member.
d) The Board of Directors may invite any person, without having the right to vote, to attend its meetings if there is a need to render an interpretation or consultation.
The development areas under the jurisdiction of the Palestinian National Authority shall be divided into tow regions, (A), (B), and (C), depending on their nature and relevant economic policies. The Agency shall designate and announce these regions pursuant to a decree to be published in the official Gazette.
The Agency’s Board of Directors may change the classification of the aforementioned development regions and specify appropriate incentives for each region. The investor will have the right to object to the decision, and this shall not apply to enterprises that have already been approved.
The Agency’s Board of Directors may grant additional exemptions to specific economic investments required to promote the interests of the Palestinian national economy.
Projects which are approved by the Agency and which have obtained the requisite licenses in accordance with the applicable laws shall be granted the exemptions for under this law in conformity with the following criteria:
Category (A) : A project with paid-up capital of more than five hundred thousand US dollars (500,000) or which permanently employs no fewer than 25 Palestinian workers shall be granted an exemption from income taxes, when they fall due, payable and from duties for a period of five years, provided that the life of the economic project is not less that ten years.
Category (B) : A project with paid-up capital of more than one hundred and fifty thousand US dollars ($150,000) , or which permanently employs no fewer than 15 Palestinian workers shall be granted an exemption from income taxes when they fall due, and from duties for a period of three years, provided that the3 life of the economic project is not less than six years.
Category (C) : A project with paid-up capital of more than one hundred thousand US dollars ($100,000) or which permanently employs no fewer than ten Palestinian workers shall be granted an exemption from income taxes when they fall, and from duties for a period of two years, provided that the life of the economic project is not less than five years.
Category (D) : The Agency’s Board of Directors may grant exceptional exemptions to a project with a paid-up capital of more than five million dollars ($5,000,000) and which employs no fewer than fifty permanent Palestinian workers.
The Agency’s Board of Directors may grant certain projects additional exemptions depending on the nature of the project and the needs and development priorities of the Palestinians.
The Agency’s Board of Directors may grant special exceptional exemptions to export projects, providing that percentage of output processed for export is not less than 25 per cent of the total output and that the value is not less than 30 per cent of the total cost of the project. The Board of directors may also consider granting additional incentives for export-oriented agricultural projects.
To benefit from the exemptions provided for under this law, an investor shall submit an application supported by a technical and economic feasibility study of the project and shall satisfy all licensing procedures or any other requirements provided for under applicable laws and regulations.
The Agency shall, within thirty to sixty days from the date of application, notify the applicant of its approval or rejection and shall state the reasons there of.
In the event of the approval of the exemptions, the investor shall submit an action plan detailing the steps to be followed to complete the project provided that the project implementation start-up period shall not exceed six months from the date of approval.
The investor shall submit to the Agency information and data required concerning the project’s implementation and operation. The Agency may designate officials(s) to conduct field trips to verify the information presented.
The exemption procedures provided for in this Law shall apply to all areas of investment except the following sectors and areas which require prior approval by the National Authority:
The manufacture and distribution of weapons, ammunition, or their parts ;
Upon any transfer of ownership, the project shall continue to enjoy the same exemptions previously granted, providing that it continues to be operated in the same manner by the new owner and who adheres to the provisions of this Law.
A project owner who benefits from the provisions of this Law may sell his exempted fixed assets to another project enjoying the same privileges under the provision of this Law, provided that the Agency approves such a sale, giving priority in the purchase of these assets to Palestinian investors.
The Agency shall publish a list of all approved projects in the Official Gazette every six moths, giving a brief description of such projects.
No investment, irrespective of the investor’s nationality, shall be nationalized, confiscated, or expropriated in whole or in part without the investor’s consent. No investment shall be subjected to any such measure except in compliance with a final judgment handed down by a competent court.
Foreign, Arab, and expatriate Palestinian investors shall enjoy the same rights and privileges as those granted to local Palestinian investors.
Expatriate Palestinian investors, as well as Arab and foreign investors, shall enjoy the right of permanent residence in accordance with applicable laws.
An investor, having paid the dues provided for under the applicable laws, may repatriate the capital in accordance with the provisions of this law.
Foreign, Arab, and expatriate Palestinian investors may repatriate the capital and profits generated from investments approved under this law, after payment of the dues provided for.
Should the Agency find an investor who has been granted a license who has failed to comply with the provisions of this Law or its regulations, or who has failed to abide by the conditions specified in the investment license, the Agency shall notify the investor in writing of its intention to cancel or suspend the licensed exemptions on the future or retroactively.
Should the Agency find that the license was granted to the investor under false pretense, deceit, bribery, or forgery, or in a manner contrary to this law and its regulations , the Agency may revoke such a license as of the date of its issue. All taxes, duties, and other benefits and privileges granted to the investor shall be deemed payable immediately, with interest accrued from the date the license was issued.
In either of the tow above mentioned occurrences, the investor may complain within thirty days from the date of notification of the decision, with the President to the Authority Chairman, whose decision shall be final.
The Palestinian courts shall have the competence and jurisdiction to resolve all disputes in accordance with applicable Palestinian laws.
All investments shall be effected in accordance with the license granted to them, without any discrimination based on sex, race, or religion in employing local staff, procurement, or conducting any activity
An investment may be made in any economic project, provided that it shall not conflict with public morals, public order, public security, and environmental protection laws.
Any text contrary to the provisions of this Law shall be invalid and revoked.
All competent authorities, within their respective areas of jurisdiction, shall execute this law, which shall enter into force from the date of its issuance and shall be published in the Official Gazette.