Why to Invest in Palestine
Palestine present well-established industrial zones, making it an attractive destination for investment. The Palestinian government has implemented a revitalized and modernized legal policy framework that supports and facilitates international business ventures.
Investment Incentives
The Palestinian Government and international organizations offer incentives to attract investors, such as tax breaks, grants, non-tax incentives, and streamlined business procedures through a one-stop shop.
Financial Sector
Palestine boasts a robust and stable financial sector characterized by the presence of seven local banks and six foreign banks. This thriving sector operates on an international scale and plays a vital role in supporting businesses, including small and medium-sized enterprises (SMEs), in their international ventures.
Social Impact
Investing in Palestine can have a positive social impact by promoting economic stability, creating employment opportunities, and supporting local communities.
Strategic Location
Palestine’s location in the Middle East provides access to regional markets, making it a potential hub for trade and commerce.
Human Capital
Palestine has a skilled and educated workforce, which can be an asset for businesses. The population has a strong entrepreneurial spirit and a desire for economic prosperity.
Vibrant Economic Sectors
Palestine possesses vast untapped economic potential across diverse sectors such as tourism, agriculture, manufacturing, technology, and renewable energy. By strategically investing in these sectors, significant contributions can be made towards economic growth and development. Seizing the opportunity to invest in these sectors promises substantial business prospects.
SOCIO-ECONOMIC STATISTICS
The Palestinian economy demonstrated a strong recovery from the pandemic in 2022, with a noteworthy increase in Real Gross Domestic Product (GDP) growth. Following the impressive 7 percent rebound experienced in 2021, the economy continued its upward trajectory, achieving a growth rate of 3.9 percent for the full year.Official data from the World Bank indicates that the Gross Domestic Product (GDP) in Palestine reached a value of $19.11 billion in 2022. This positive trend was primarily fueled by a growing market size and an expansion of economic activity, leading to a significant increase in revenue for the Palestinian authority.Regarding international trade, Palestine recorded exports amounting to $1.58 billion in 2022, while imports totaled $8.19 billion. This represents a year-on-year increase of 8.6 percent for exports and 27.6 percent for imports, according to data from the Palestinian Central Bureau of Statistics.Overall, these economic indicators underscore the positive momentum and resilience of the Palestinian economy, as it rebounded from the challenges posed by the pandemic and continued to expand and thrive in 2022.Palestine's young generation is vibrant, highly educated, and full of potential. Youth in Palestine comprise 30% of the population, of which 38.1% are adolescents aged 15-19 and 61.9% aged 20-29. With their passion for innovation, entrepreneurship, and driving positive change, they are poised to make a significant impact across various sectors. This educated youth population, fueled by ambition and a commitment to continuous learning, is a valuable asset for the future of Palestine. Additionally, the Palestinian labor force boasts an impressive 98 percent literacy rate, highlighting the emphasis on education. Furthermore, the West Bank and Gaza have embraced technology, resulting in high technology penetration. Palestinian businesses are renowned for their professionalism and the quality of their products. It is noteworthy that 99 percent of firms in the West Bank and Gaza are family-owned small and medium-sized enterprises (SMEs), further contributing to the resilience and entrepreneurial spirit of the Palestinian economy.
INVESTMENT AND TRADE OPPORTUNITIES
Investment opportunities in Palestine exist in various sectors and offer potential for growth and development. Here are a few sectors that present investment prospects:
Agriculture
Manufacturing
Financial Services
Healthcare
Information Technology (IT)
Renewable Energy
Tourism
BUSINESS ENVIRONMENT
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The Palestinian government, with the support of the European Union and international organizations, is actively engaged in efforts to establish favorable conditions for economic growth.
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Transparent regulations, streamlined procedures, and intellectual property protection are being established to support business activities in Palestine.
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Efforts are being made to ensure fairness and equal opportunities for both domestic and foreign investors.
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Palestine has entered into free trade agreements, allowing for preferential market access to neighboring countries.
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These agreements aim to reduce barriers and provide opportunities for businesses to expand their reach in the region.
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Palestine recognizes the significance of a conducive business environment and is continuously working towards its enhancement.
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The goal is to attract investment, foster economic development, and create opportunities for both local and international businesses in Palestine.
FUNDS INVESTED AND LEVERAGED BY THE
EUROPEAN UNION AND TEAM EUROPE
The European Union, its Member States, and European Financial institutions, collectively known as “Team Europe,” have actively supported investment projects in Palestine. In the past 15 years, the EU, EU Member States and European Development Partners (United Kingdom, Norway and Switzerland) have spent annually more than EUR 1 billion in official development assistance to Palestine and the Palestinians. Recent developments indicate a significant increase in European partners’ investments leveraged in the Palestinian economy. The combined value of ongoing investments now stands at an impressive EUR 1.826,40 billion.
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Nine European partners are engaged in Palestine to support private investments and over EUR 800 Millions leveraging a total of EUR 1.826,40 Billion.
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Large majority of all funding that flows into SME finance are loans with EUR 1.314,51 Billion (72%).
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Significate amount of financing is used to guarantee and de-risk operations by local partner finance institutions, including almost 51% of the loans.
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Followed by loan guarantees EUR 306.28 Million (17%);Equity 2% EUR 27.40 Million 2%;Investment grant EUR 43 Million 2 %; Micro credit EUR 96 Million 5 %; Technical assistance EUR 39.2 Million 2 %.