BENEFITS OF MAKING BUSINESS IN THE WEST BANK W W W. M E R G E R S C O R P. C O M
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W W W. M E R G E R S C O R P. C O M
BENEFITS OF MAKING BUSINESS IN THE WEST BANK
W W W. M E R G E R S C O R P. C O M
Country Overview The West Bank is mostly composed of north-south–oriented limestone hills (conventionally called the Samarian Hills north of Jerusalem and the Judaean Hills south of Jerusalem) having an average height of 2,300 to 3,000 feet (700 to 900 metres). Trans-Jordan (the West Bank and East Jerusalem including on the Old City) annexed the Arab areas of Palestine and the Gaza Strip was annexed by Egypt. The hills descend eastwardly to the low-lying Great Rift Valley of the Jordan River and the Dead Sea. The West Bank does not lie entirely within the drainage system of the Jordan River, as elevated areas in the west give rise to the headwaters of streams flowing westward to the Mediterranean Sea.
In the West Bank, meanwhile, concerns were brewing over the future of the PA. In 2018 a health scare for Abbas raised concerns over who would lead the PA after him. Later that year a controversial law to implement a social security program in the West Bank sparked a number of protests.
Executive Summary The West Bank is situated west of the Jordan River and the Dead Sea, and east of Israel. Its area is 5,860 km². The climate of the West Bank varies a lot, with most of the rainfall in the north and the west. In the north, crops and vegetables are grown olives in the hills, and grapes in the southern region. The east has a number of oases and farms receiving its water from springs. In many regions in the south and the east, desert penetrates the arable land. The Palestinian population of around ten or eleven million people is divided between historic Palestine and a diaspora, mainly in neighbouring Arab countries. Efforts to create a Palestinian state on the West Bank of the River Jordan and Gaza on the Mediterranean coast have been frustrated by the continuing conflict with Israel and disputes over the status of diaspora Palestinians.
Introduction – Doing business in The West Bank West Bank is ranked 117 among 190 economies in the ease of doing business, according to the latest World Bank annual ratings. The rank of West Bank deteriorated to 117 in 2019 from 116 in 2018. According to the Investment Promotion Law, all business entities need to register with the Palestinian Investment Promotion Agency’s (PIPA) registry of investments located in the West Bank. There are three types of firms for incorporation: General Partnership: Partner liability is unlimited and all partners are beholden to the liabilities of the partnership. It is required to include the name of at least one of the partners in the title of the General Partnership. Limited Partnership: Requires at least a general partner personally liable for the company as well as a limited partner with liability that is limited to the amount of the capital.
Local Companies (Limited Liability Company (LLC) and Public Liability): This is the most preferred way of investing.
Conducting business in The West Bank Governing the Palestinian territories is the Palestinian Authority. The latter has crafted a number of framework regulations to bring in foreign investment. Primary implementing agency is the Palestinian Investment Promotion Agency (PIPA). The two major laws aim to protect potential investors from undue risk as well as promote the profitability of their investment. These are The Law on the Encouragement of Investment in Palestine Law No. [1] of 1998 and the "Presidential Decree No. ( 2 ) for the year 2011". These laws promote investment in all sectors of Palestine's economy by both foreign and local companies that are registered for business in the area.
Taxation in The West Bank In an effort to improve the income tax system and reduce the tax burden on individuals, the State of Palestine passed new legislation on income tax brackets for individuals and companies in 2004, followed by a presidential decree to amend the income tax law No.8 for 2011. For companies, this is a change from a 20% rate to a 15% flat rate. The State of Israel taxes the income of both its citizens and the residents of the West Bank that it has occupied since the 1967 War. For individuals, this is a significant change from a progressive bracket of 5-20% to 5-15%. The following sections briefly outline the taxation laws.
Trade West Bank is the 185th largest export economy in the world. In 2017, Palestine exported $94.8M and imported $935M, resulting in a negative trade balance of $840M. In 2017 the GDP of Palestine was $14.5B and its GDP per capita was $4.89k. The top exports of Palestine are Tropical Fruits($14.2M), Scrap Iron ($13.4M), Packaged Medicaments ($8.69M), Building Stone ($8.5M) and Pure Olive Oil ($7.52M), using the 1992 revision of the HS (Harmonized System) classification. Its top imports are Cars ($163M), Cement ($40.1M), Baked Goods ($39.8M), Chocolate ($29.6M) and Frozen Bovine Meat ($27M). The top export destinations of Palestine are Jordan ($49.2M), Belarus ($6.54M), Kuwait($5.29M), the United States ($5.04M) and Turkey($4.91M). The top import origins are Jordan ($148M), Egypt ($135M), South Korea ($102M), Germany ($97.7M) and Turkey ($87.4M).
Banking in The West Bank The following is a list of banks in the State of Palestine: - Bank of Palestine - Arab Islamic Bank - Palestine Islamic Bank - Palestine Investment Bank - Al Quds Bank - The National Bank TNB - Safa Bank - Arab Bank - Cairo Amman Bank - Bank of Jordan - Housing Bank - Egyptian Arab Land Bank - Jordan Ahli Bank
Our M&A Process TARGET APPRAISAL
APPROACH
DUE DILIGENCE
NEGOTIATION & CLOSE
POST MERGER INTEGRATION (PMI)
Revisit indicative valuation & prepare detailed valuation based on due diligence findings; SPA negotiations with the seller; Development of final structure (share/asset deal) and final valuation; Approvals; Signing of SPA & Close.
Consider the extent of integration; Development of 100 Day PMI Plan; Consider short & long term objectives; Estimate requirements to capture synergies; Determine resource needs & optimal allocation.
Company general counsel; Lawyers; Senior management.
Company general counsel; Lawyers; Senior management/HR.
Key Areas Target & market analysis; Initial assessment of synergies & value drivers; Indicative valuation; Go or No-Go decision; Preparation of transaction documents (NDA – Nondisclosure Agreement/LOILetter of Intent); Select Transaction team; Appoint advisors; Consider funding ability.
Initial approach letter; Signing of NDA; Prepare & share initial information requests; Formulation of LOI (Letter of Intent) & possible negotiations; Initial meeting and Q&A; Circulate information on the Target to the Transaction team.
Set scope of due diligence; Set up VDR (virtual data room); Coordinating of due diligence, further meetings and Q&A sessions; Consider points relevant to the Post-Merger (PMI) phase;
Parties Involved CFO; Head of M&A; Accountants; Corporate finance advisors; Consultants.
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Senior management; CEO, CFO, CTO; Strategy director; Head of M&A; Head of Business Development; Consultants.
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MergersCorp.com The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. Member firms of the MergersCorp network of independent firms are affiliated with MergersCorp International. MergersCorp International provides no client services. No member firm has any authority to obligate or bind MergersCorp International or any other member firm vis-à-vis third parties, nor does MergersCorp International have any such authority to obligate or bind any member firm. Copyright © 2020 MergersCorp International. All rights reserved. 13
© Midaxo 2018
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