Ramallah, June 18, 2017: The Palestinian council of ministers approved an Incentive package contract for projects and entrepreneurs in the Information communication technology sector, which was endorsed by PIPAs’ Board of Directors pursuant to the provisions of the Palestinian Investment Encouragement Law No. (1) of year 1998 and its amendments, The approval of the incentive package contract is a clear interpretation of the Palestinian government vision and its plans and commitments toward maintaining a healthy investment environment to attract foreign, Diaspora and expatriate investments in accordance with PIPAs’strategic framework, which integrate with the National Policy Agenda 17-22, Local development and Sustainable Development Goals 2030.
Since the ICT is a promising sector in Palestine and promising job creation sector for youth and fresh graduate and attractive sector for investors and entrepreneurs, and contribute in knowledge transfer and promote knowledge economy, a series of discussions and communications with the public and private sector and a number of field surveys have been implemented through After Care Program,to examine the main challenges facing the sector and start-ups to expand the existing investments or attracting new investments, by proposing policies that respond to the needs of providing an appropriate and competitive investment climate. And here PIPA assure that more work will be done to encourage all stakeholders to facilitate creation of business and facilitate the process of registration and ease access to finance for this promising sector rich of business opportunities.
In line with the planed goals of the incentives package contractit’s expected that more than 70 projects will benefit from the contract either new or existing projects, in addition its expected that more than 350direct jobs will be created through an investment that reaches 4USM$; the investments will generate a direct revenue to public treasury estimated to be around 480US$thousands in the form of value added tax and fees.
It is worth mentioning that incentives contract package includesthe following:
- Startups or entrepreneurs projects that registered in the centers or incubators will enjoy the same incentives as new projects in parallel to facilitation of registration by recognizing the address of the activity to be within the facility located in and waiving the registration fees for the first project
- New or excitingprojects that received incentives earlier or not, including entrepreneur’s projects receives incentives as 4, 2, 3 years tax holiday of (0%) income tax.
- Investors and companies willing to finance or invest in R&D in Information technology either in the entrepreneurs projects or new companies or exciting companies or universities or approved research and development centers, will have the option to deduct the invested amount from the taxable income.
- All projects will receive customs incentives on equipment and inputs.
- Financing and loans programs targeting projects within the scope of this contract are treated in the same manner of SME’s income tax treatment as per the law.
- In other hand, the above mentioned incentives will be linked to the number of Jobs created and preserved during the incentives periods.
The Incentive Package Contracts are considered to be the most competitive instruments in the Law. These contracts provide flexibility to PIPA to issue facilities that serve a certain sector, geographic location or a strategic project for the purpose of stimulating investment and increase performance in order to create jobs through production growth, increase export and transfer of technologies.
It is worth mentioning that PIPAs’ BoD accredited as a representation of public and private sector given that the private sector is represented by 40%. The Council is chaired by HE Abeer ODEH, Minister of National Economy. And it is worth mentioning that PIPAs’ BoD in process of endorsing new Incentive Package contracts in response to Investment needs and strategic plans, to attract new foreign investments and this efforts supported by several available tools and programs whether from the public or private sector institutions or international institutions, and here we would like to extend our gratitude but not limited to DFID, EU, PMDP and USAID
The Palestinian Investment Promotion Agency (PIPA) is the practical expression of Palestine's vision and policy in encouraging the private sector and contributing to maintain and an appropriate investment environment, through providing local and foreign investors with services through the one stop shop and promoting the partnership and cooperation between the public and private sectors, and providing all needed information to assist investor to make the decision to invest and start businessman in Palestine, including the assistance in obtaining all the necessary licenses, and available investment opportunities and available sources of funding, and To maintain the relationship with investors through the After Care program under the guidance of PIPAs’ BoD chairperson H.E. Abeer ODEHMinister of National Economy to achieve the goals of the Palestinian government headed by Prime Minister Dr. RamiHamdallah, and the vision of H.E. Mr.President Mahmoud Abbas.