Limited Liability Company (LLC)
شركة ذات مسؤولية محدودة
Company formation in Palestine
The LLC is best suited for: Development sector companies and NGOs with commercial arms, Companies with specific Palestinian market mandates, Social enterprises and impact investment vehicles, Telecommunications and construction companies serving the Palestinian market. The Palestinian Authority levies a 15% corporate income tax on taxable profits for companies registered in the West Bank. VAT applies at 16% (aligned with the Israeli VAT rate under the Paris Protocol economic framework). Small businesses with revenue below certain thresholds may qualify for simplified tax procedures. Withholding tax applies on payments to non-residents. The tax administration is functional in PA-controlled areas (Area A and parts of Area B). Gaza operates under different fiscal conditions due to the political situation.
- Development sector companies and NGOs with commercial arms
- Companies with specific Palestinian market mandates
- Social enterprises and impact investment vehicles
- Telecommunications and construction companies serving the Palestinian market
Key Facts
Step-by-Step Formation Process
Reserve company name with the Company Controller
Apply to the Palestinian Company Controller at the Ministry of National Economy for company name reservation. The proposed name must be unique and compliant with Palestinian naming regulations. All documents must be in Arabic.
Draft and notarise the Memorandum of Association
Prepare the Memorandum of Association specifying shareholders, capital, management structure, and business activities. The document must be notarised by a Palestinian notary public.
Register with the Company Controller
Submit the notarised MOA, shareholder identification documents, and registration fees to the Company Controller. The Ministry of National Economy issues the Certificate of Registration upon approval.
Register for tax and obtain operational licences
Register with the Palestinian Tax Authority for corporate income tax and VAT. Obtain the municipal business licence from the relevant municipality. Register with the Ministry of Labour if hiring employees.
Open a corporate bank account
Open a corporate bank account with a Palestinian bank (Bank of Palestine, Cairo Amman Bank, or others). Provide the Certificate of Registration, MOA, passport copies, and a business plan.
Required Documents
- Passport copies of all shareholders and directors
- Proof of residential address for each shareholder
- Notarised Memorandum of Association (Arabic)
- Registered office lease agreement in the West Bank
- Power of Attorney if applying through a representative (notarised and legalised)
- Municipal approval for business activity
Cost Overview
Tax Treatment
The Palestinian Authority levies a 15% corporate income tax on taxable profits for companies registered in the West Bank. VAT applies at 16% (aligned with the Israeli VAT rate under the Paris Protocol economic framework). Small businesses with revenue below certain thresholds may qualify for simplified tax procedures. Withholding tax applies on payments to non-residents. The tax administration is functional in PA-controlled areas (Area A and parts of Area B). Gaza operates under different fiscal conditions due to the political situation.
Pros & Cons
- Functioning Palestinian Authority regulatory system covers company registration in the West Bank
- 100% foreign ownership permitted in most sectors without a local partner requirement
- No statutory minimum capital for LLC formation — low barrier to entry
- Trade agreements with the EU and Arab countries provide preferential market access
- Active development finance ecosystem with international donor and NGO presence
- West Bank and Gaza operate under distinct political and security conditions
- Israeli movement restrictions (checkpoints, permits) affect logistics and operations
- Limited domestic market and constrained economic activity
- Banking sector functions but with restricted international correspondent relationships
- Political uncertainty and conflict risk are persistent operational factors
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Get StartedThis content is educational and does not constitute legal or tax advice. Always consult a qualified professional for your specific situation. Data last verified March 2026.