Formal registration of companies has many immediate benefits for the companies and for business owners and employees. Legal entities can outlive their founders. Resources are pooled as several shareholders join forces to start a company. Formally registered companies have access to services and institutions from courts to banks as well as to new markets. And their employees can benefit from protections provided by the law. An additional benefit comes with limited liability companies. These limit the financial liability of company owners to their investments, so personal assets of the owners are not put at risk. Where governments make registration easy, more entrepreneurs start businesses in the formal sector, creating more good jobs and generating more revenue for the government.
Below is a detailed summary of the bureaucratic and legal hurdles faced by entrepreneurs wishing to incorporate and register a new firm in the West Bank and Gaza Strip. It examines the procedures, time and cost involved in launching a commercial or industrial firm with up to 50 employees and start-up capital of 10 times the economy's per-capita gross national income.
| No. | Procedure | Time to Complete | Associated Costs |
|---|---|---|---|
| 1 | Search for company name and reserve proposed name | 1 day | ILS 87 |
| 2 | Local lawyer signs company documents | 1-3 days | USD 1000 |
| 3 | Submit company incorporation papers & obtain temporary copy of certificate of registration from Ministry | 2 days | no charge |
| * 4 | Deposit initial capital | 1 day | no charge |
| 5 | Register with Companies Registry | 3-4 days | see comments |
| 6 | Payment of registration fee | 1 day | no charge |
| 7 | Register for income and VAT tax | 1-3 days | no charge |
| 8 | Register with Chamber of Commerce | 3-5 days | USD 158 |
| * 9 | Obtain business license from municipality | 35 days (simultaneous with previous procedure) | ILS 120 |
| * 10 | Obtain approval from fire department | 1-3 days (simultaneous with previous procedure) | 0.15 USD per square meter |
| * 11 | Obtain and legalize special company books | 3 days (simultaneous with previous procedure) | 30 USD per transaction |