Palestine Market Entry

Palestine Market Entry

Subchapters:

  • Market entry
  • Forms and conditions of operation on the market
  • Marketing and Communications
  • Issues of intellectual property protection
  • Public procurement market
  • Payment terms, payment ethics and resolution of commercial disputes
  • Visas, fees, specific conditions of travel to the territory
  • Employment of citizens from the Czech Republic
  • Fairs and events

Market entry

Before entering the market, it is necessary to take into account the fact that Palestine is not a single territory. The West Bank and the Gaza Strip are two almost completely separate markets, and the territory of the West Bank itself is fragmented, as the territory under the control of the PNS is interrupted by territories under different degrees of Israeli administration, and for example, transport between individual governorates can be quite complicated. Also, the Palestinian Chambers of Commerce, which are an important point of contact for foreign companies, are organized regionally, usually by individual governorates, and function more or less independently. The most common sales channel is local agents who provide local distribution. With regard to the complicated situation, when it is necessary to negotiate not only with the Palestinian but also with the Israeli authorities when importing to PAÚ, foreign suppliers often prefer such delivery conditions,

The import regime at the PAU is regulated by the so-called Paris Protocol (Protocol on Economic Relations) from 1994, which is part of the Oslo agreements, and which creates a quasi-customs union between Israel and the PAU. Israel controls both external border crossings and internal crossings between Israel and the PAU, decides the entry and exit of goods and people to/from the PAU, and administers the collection of customs duties and fees, which are subsequently transferred to the accounts of the PNS. The applicant handles the registration and permits required for importing goods to the PAU, setting up a branch or business, etc., with the Palestinian authorities, who, however, always forward the application to the Israeli Civil Administration of the Occupied Territories (COGAT) for approval.

Israel restricts the import of certain categories of goods to the PAU. Some chemicals (flammables, substances that can be used to make explosives), some types of knives, laser devices, weapons for private use, dual-use goods, and generally any products that Israel considers a security risk are prohibited. Imports from countries prohibiting imports from Israel are also excluded. In the event of a demand for the import of potentially sensitive goods (e.g. telecommunications or radio communication equipment), it is recommended to consult the relevant PNS authorities in advance, who will request a COGAT opinion.

Customs clearance occurs at one of the following entrances to the customs territory of Israel/Palestine: Ashdod and Haifa ports, Nitzana (with Egypt) and Allenby/King Hussein Bridge (with Jordan) land crossings, and Ben Gurion International Airport. At PAU, cleared goods arrive before the following internal crossings: Jalameh Crossing, Sha’ar Ephraim, Beitunia and Tarqumia (West Bank) and Kerem Shalom (Gaza), with slightly different procedures for each depending on the category of goods and the mode of transport.

Documents for import:

  • certificate of origin
  • packing list
  • commercial invoice
  • customs clearance
  • bill of lading/air way bill/truck way bill

A legal entity or a natural person is authorized to import to PAÚ on the basis of registration (Foreign Trade Dealing Registration). Registration is issued by the Palestinian Ministry of National Economy, which forwards the application to COGAT for approval. The process takes 1 to 2 weeks.

Import licenses are required only in the case of imports of goods with a preferential regime (especially duty-free imports from the EU, USA or Turkey) within the set quotas, imports of motor vehicles and other specific categories of goods. Specific requirements apply to imports of food and medicine, agricultural products, motor vehicles, chemical materials and goods subject to quantitative restrictions. With exceptions, Palestine and Israel apply a single customs tariff. High tariffs are applied to a number of products in order to protect the local (ie Israeli) market. Imports of goods from Israel to PAÚ are considered an internal transfer within one customs territory and are not subject to customs duties. In general, importers must fulfill administrative requirements (unified invoice, delivery note) and only certain categories of goods are subject to specific requirements (food, medicines, agricultural products). The administratively easy and inexpensive import regime from Israel means that most products from third countries are re-exported to PAÚ in this way. Palestinian exports are not restricted by the PNS authorities and their support is one of the government’s priorities. Certificates of origin are issued by locally relevant chambers of commerce based on the decision of the Ministry of National Economy. Outside PAÚ, licenses are issued by COGAT. Certificates of origin are issued by locally relevant chambers of commerce based on the decision of the Ministry of National Economy. Outside PAÚ, licenses are issued by COGAT. Certificates of origin are issued by locally relevant chambers of commerce based on the decision of the Ministry of National Economy. Outside PAÚ, licenses are issued by COGAT.

Forms and conditions of operation on the market

Foreign companies most often operate on the local market through a local partner or intermediary. In addition, they can also operate here directly – either establish a local company or register a branch or representative office in Palestine. In general, it is recommended that the relevant steps be implemented in cooperation with an experienced local lawyer and accounting consultant.

At the end of 2021, the PNS approved a new law on companies (No. 42/2021), which replaces the existing laws from the period of the Jordanian administration in the West Bank (“Companies Law” No. 12 of 1964) and the British administration in Gaza (“Sharehoding Companies Law ” No. 18/1929 and “Ordinary Companies Law” No. 19/1930). The law is in force from April 2022, but a transition period must be expected before it is fully implemented. Implementation in Gaza is questionable given the political divide. In addition, Military Order No. 398 of 1970 applies to the Type C territory of the West Bank (administered by Israel). The law introduces new types of companies (primarily the non-existent limited liability company), enables individual entrepreneurship and business from home, introduces electronic registration of companies and other changes.

Company registration is under the responsibility of the Ministry of National Economy (MNE), which forwards applications from foreign investors to COGAT approval. Joint stock companies registered in Palestine are traded on the local stock exchange. A foreigner must first obtain a work permit from MNE, registering a business company is the next step. To operate in the Gaza Strip and the West Bank, it is sufficient to register in only one of these areas (to operate in Gaza, however, at least one of the shareholders must be a resident of Gaza).

A foreign company can operate directly in Palestine only if it is registered here. It is possible to establish a local company (so-called ordinary company, limited liability company or joint-stock company), the participation of local entities is not required. A joint venture must also be registered as one of the types of local trading company. It is also possible to establish a branch or representative office of a foreign company that does not have its own legal personality and is directly guaranteed by the foreign company. The representation may be used, for example, for marketing purposes, but it does not have the right to conduct business transactions.

To establish a branch or representative office, a registration application must also be submitted to the Ministry of National Economy, based on a completed investment application form and information about the parent company in the country of origin (certified copy of the charter and articles of association, names of company directors) and the persons who manage it they will represent in Palestine. Basic information in English regarding the documents necessary to register companies, including the amount of fees, can be found on the website of the Palestinian Investment Promotion Agency.

Marketing and communication

The requirements for promotion and marketing are not very high, but they are gradually approaching Western standards. Local companies most often carry out promotion in a relatively simple way, especially directly at the points of sale. But there is also promotion through billboards, promoters, the Internet and promotional goods. Promotion on social networks and other modern technologies are also developing. There are several dozen local advertising agencies operating in Palestine, with some exceptions only offering in Arabic.

There are several television and radio stations in Palestine that broadcast throughout the territory, and since 2000, many local private television and radio stations have been established that broadcast 24 hours a day and focus mainly on regional news. Promotion of products and services in these stations is quite common, is not financially demanding, and is especially suitable for promoting locally operating companies. For a Czech entity, it is best to use the knowledge of a local partner. Both commonly watched broadcasts and the most read written media (printed and online) are, with exceptions, in Arabic, and any advertising should also be in Arabic (it is quite common for Arabic advertising to contain slogans or, for example, the name of a product in English as well, but Arabic is the basis). Advertising should also respect religious (primarily Islamic) taboos (e.g.

Issues of intellectual property protection

Palestine is not a member of the WTO, nor is it a signatory to any international instruments in the field of intellectual property protection. There have been cases of copyright infringement and non-respect of intellectual property protection in the past. Defense in similar cases is complicated, among other things, because the outdated legislation in this area lags behind international standards. Therefore, caution is in order, the basis is the choice of a good local representative or partner, or a legal representative familiar with Palestinian legislation.

In the West Bank, this issue is governed by the Jordanian Laws on Trademarks (No. 33 of 1952) and Patents (No. 22 of 1953), in Gaza the British Mandate Laws on Inventions (No. 64 of 1953) are still applied. 1925) and trademarks (No. 38 of 1938). The copyright law from the British Mandate period (No. 15 of 1924) is also in force in the West Bank and Gaza. Trademarks and patents must be registered locally before being introduced into the Palestinian market. This registration is carried out by the General Administration of Intellectual Property at the Ministry of the National Economy. The duration of patent protection is four years, it can be extended up to three times, each time by another four years.

Under the pressure of the international community, new legislation has been being prepared for a long time, which would replace the outdated laws. A total of nine new laws are being prepared, which, in addition to patents and trademarks, should also cover trade names, industrial design, geographical indications, but also, for example, the protection of designs for the layout of integrated circuits, together with the law on the enforcement of industrial property rights. However, their approval cannot be expected in the near future.

Public procurement market

Public tenders announced by PNS authorities are governed by Act No. 8 of 2014 on public procurement and detailed regulations for awarding public contracts issued by Government Decision No. 5 of 2014. The law establishes the High Council for Public Procurement Policies, which is the main authority for public contracts and operates a unified information portal. The Ministry of Finance (General Supply Department) and the Ministry of Public Works and Housing Construction (Central Tendering Department) have the right to issue tenders, smaller tenders are also authorized to be issued directly by other state administration bodies. They can set the conditions for a specific tender, including any restrictions and conditions under which interested parties can participate in the tender. With exceptions, tenders are compulsorily published on a unified information portal, usually in Arabic, in addition, the Ministry of Public Works and Construction registers lists of companies by sector to which tender announcements are sent directly. Part of the published information is a general description of the tender (who announces it, by when applications must be submitted, who can apply for the tender), and information under which conditions it is possible to request a complete tender from the contracting authority. Tender application usually requires the payment of a non-refundable fee derived from the estimated total price. In the case of construction contracts, membership in the Palestinian Union of Contractors is usually required. Under certain conditions (i.e. if the contract is very complex, cannot be carried out without the use of resources that are unavailable in Palestine, or a local contractor could not be found), the PNS may issue an international tender. In such a case, the tender must be published in English in addition to Arabic, and an offer can also be submitted in English (ie documents in other languages ​​must be delivered in certified English translation). that the contract is very complex, it cannot be carried out without using resources that are unavailable in Palestine, or it was not possible to find a local contractor), the PNS may announce an international tender. In such a case, the tender must be published in English in addition to Arabic, and an offer can also be submitted in English (ie documents in other languages ​​must be delivered in certified English translation). that the contract is very complex, it cannot be carried out without using resources that are unavailable in Palestine, or it was not possible to find a local contractor), the PNS may announce an international tender. In such a case, the tender must be published in English in addition to Arabic, and an offer can also be submitted in English (ie documents in other languages ​​must be delivered in certified English translation).

The system of tender conditions announced by other entities outside the PNS (i.e. local entities or international organizations) is very inconsistent. Public tenders for projects financed or co-financed by foreign donors are often limited to nationals of the donor country, or on Palestinians, or on companies registered in Palestine. Larger projects in Palestine are mainly implemented by the EU, the World Bank and individual specialized UN agencies, as well as the development agencies of individual donor countries. Projects are implemented either in cooperation with the Palestinian authorities (in which case the tender is conducted according to the above-described PNS rules) or directly according to the rules of the given organization.

Payment terms, payment ethics and resolution of commercial disputes

The payment terms correspond to international business standards and are similar to those in Israel. Banks at PAÚ reach an international level and provide quality services. In the case of foreign entities importing goods to PAÚ, the first payment will be made through a letter of credit, the next part can be paid both in cash and by bank transfer. In business dealings, it is necessary to expect longer periods for the implementation of bank transfers. In the case of small and medium-sized enterprises, it is very difficult for a foreign entity to secure sufficient relevant information about the partner’s creditworthiness. Invoices are usually due within 3 months, a guarantee in the form of a post-dated check or partial bank transfer may be required. For long-term partners, the conditions may be more relaxed.

There are three levels of courts on the territory of PAÚ – magistrate, district and appeal. The resolution of commercial disputes generally falls under the jurisdiction of district or appeal courts. In addition to judicial dispute resolution, arbitration is also offered, which is often used before disputes are heard in court. Considering the inconsistency of legislation in the West Bank (influences of archaic Ottoman and Jordanian civil law supplemented by Mandate and Israeli law) and in the Gaza Strip (Mandate and Egyptian customary law supplemented by Israeli law), it is essential to use a local lawyer. Under pressure from donors, the PNS is preparing the adoption of new harmonized laws valid in the entire territory under its jurisdiction. In some cases, the Israeli factor must also be taken into account – for example, a dispute about the release or detention of cargo in an Israeli port is decided by the locally competent Israeli court.

Visas, fees, specific conditions for traveling to the territory

Citizens of the Czech Republic can travel to PAÚ in the same way as to the State of Israel, i.e. visa-free for a maximum of 3 months. A passport with machine-readable data valid for at least 6 months after leaving Israel is required. Instead of an entry stamp, Israel issues cards containing information on the permitted length of stay. This must be shown together with the passport when crossing checkpoints between Israel and the West Bank. To enter Gaza, it is necessary to obtain prior Israeli permission and permission from the de facto authorities in Gaza. From the summer of 2022, new Israeli rules for entering PAU should come into force. If a trader or investor is only heading to the PAU, they will need to enter the country via the Allenby/King Hussein Bridge border crossing where they will apply for an entry permit. Persons who have been refused entry to Israel in the past will need to apply for permission in advance at the Embassy of the State of Israel. For those,

You cannot get to the West Bank directly from Ben Gurion International Airport by public transport, you have to go to Jerusalem and from there take a bus or taxi to the appropriate check-point. Alternatively, a local partner may be able to arrange airport pick-up. You can also come to PAÚ by land from Jordan, you cannot cross the border in a rented car. Vehicles from Israeli rental companies only have insurance in territory C of the West Bank, so they cannot be used for trips to Palestinian cities and towns, which are typically territory A or B. In East Jerusalem, it is possible to rent a car insured for PAÚ, an international driver’s license is not for example In Palestinian cities, you can move around on foot, for longer distances you can use a taxi, for intercity trips, shared taxis (service taxis) also work. Several suitable hotels can be found in most cities, which can be booked online. Businesses with an international clientele can easily pay by card, in smaller local shops this may not be the rule, and in some areas it may be difficult to find an ATM, so it is better to carry cash. Water is supplied to many areas by an Israeli supplier, but it is always better to first make sure that it is safe on site. Before traveling to PAÚ, SÚ Ramallah recommends checking the current travel recommendations on the website of the Ministry of Foreign Affairs. When traveling to PAÚ, you must expect military security checks and closures, and you must always have your travel documents with you. Water is supplied to many areas by an Israeli supplier, but it is always better to first make sure that it is safe on site. Before traveling to PAÚ, SÚ Ramallah recommends checking the current travel recommendations on the website of the Ministry of Foreign Affairs. When traveling to PAÚ, you must expect military security checks and closures, and you must always have your travel documents with you. Water is supplied to many areas by an Israeli supplier, but it is always better to first make sure that it is safe on site. Before traveling to PAÚ, SÚ Ramallah recommends checking the current travel recommendations on the website of the Ministry of Foreign Affairs. When traveling to PAÚ, you must expect military security checks and closures, and you must always have your travel documents with you.

Employment of citizens from the Czech Republic

Employment is generally governed by the Labor Law No. 7 of 2000. Employing a foreigner, i.e. a citizen of the Czech Republic, is only possible if a work permit is obtained, for which the employer must apply to the Ministry of Labour. Nevertheless, the entry and residence permit is decided by Israel, and obtaining a long-term residence permit is not a simple matter. In addition, the visa-free regime does not apply to working stays. Travelers equipped with a tourist visa must leave the territory after three months of stay, with movement across the “border” between Israel and the West Bank not considered leaving the country (unlike crossing into Gaza). As a result of non-compliance with the regime of entry and stay in the territory of Israel, or PAÚ may be denied entry into Israel, or the Israeli authorities may limit movement to the West Bank only (Judea and Samaria only) and prohibit entry into Israel.

Currently, Israel has introduced new rules for entering the Palestinian territories, which should come into force during the summer of 2022. According to these rules, a foreigner will have to submit an application at the Israeli embassy in the country of origin at least 60 days in advance, and at the same time present an official invitation from the PNS. The permit can be extended for a maximum of 27 months, it will be possible to apply for another permit only after 9 months. The practical implications of this new regulation are still unclear.

Compulsory health insurance does not exist in Palestine, and many people (including most private sector employees) do not, but it is possible to get insurance commercially. The Labor Act only stipulates the employer’s legal obligation to register employees for health insurance in the event of an occupational accident. In case of illness or injury, we recommend, if possible, to be treated in Israeli hospitals. At PAÚ, the level of local health care is not the same in all locations, or is poorly accessible, in some cases not available at all. Since health care in Israel is relatively expensive (a one-day hospital stay in the event of a sudden illness costs up to USD 1,000), we recommend that Czech citizens take out insurance with a Czech or international insurance company before traveling to Israel.

The law sets the minimum wage at 1880 ILS per month net. Compulsory social insurance does not exist for the moment, individuals can save privately. A draft law on social insurance was created several years ago, but was rejected by the public (mainly because it assumed too high contributions in relation to earnings, especially in the private sector) and never entered into force. After the experience of 2020, when many people found themselves completely without income due to the COVID-19 pandemic, the Ministry of Labor proposed to revise and implement the law in cooperation with unions and employers, which has not yet happened.

Fairs and events

Due to the size and fragmentation of the local market, large international fairs and trade exhibitions with foreign participation do not take place at PAÚ. Occasionally, presentation events of individual domestic or foreign entrepreneurs take place. Presentation events are also organized by chambers of commerce or sector associations. Palestinian traders participate in major regional (UAE, Egypt, Jordan) and foreign trade fairs.

Palestine Market Entry