Start with the activity and proposed structure. Setting up a company, operating through a branch and buying shares in an existing business raise different questions. Clarify where the work will take place, which entity will sign contracts and issue invoices, and how the investment will be financed. When comparing company structures, consider ownership, governance and reporting obligations alongside tax.
Prepare a compliance plan for the first year. Confirm which income tax and VAT registrations apply, how invoices and records will be kept, who will prepare returns, and how payroll and any withholding obligations will be handled. Review funding, interest, service fees and profit distributions separately so you can confirm their treatment before payment. Cross-border payments may also require review in the investor’s home jurisdiction.
If you are buying an existing business or a stake in one, review its past returns, tax balances, correspondence with the authorities, and any open assessments or disputes. Ask for the records behind its previous tax positions. Identify potential obligations before agreeing on a price or signing the transaction documents.
If your forecasts depend on an investment incentive, confirm eligibility and the relevant written approval before including it in your projections. Record which activities are covered, the conditions and the applicable period. Revisit your assumptions if the project changes.
Practical considerations
- Map which entities will contract, invoice and provide funding.
- Record the registrations and returns that apply and who is responsible for them.
- Review an existing company’s tax history before buying a stake.
- Confirm the conditions of any investment incentive before relying on it in forecasts.
Further reading
- Palestinian Official Gazette: income tax legislation and amendments (Arabic)
- Palestinian Official Gazette: value added tax legislation (Arabic)
- Palestinian Official Gazette: investment promotion legislation (Arabic)