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Doing Business in the West Bank

Yes, you can do business in the West Bank! Many American firms have established agencies and distributorships, and Palestinian consumers have a strong preference for a wide variety of U.S. goods and services.

Many American companies have reoriented their marketing efforts to acknowledge the Palestinian market as culturally, economically, and commercially distinct from the Israeli market. The U.S. Commercial Service in Jerusalem encourages American exporters wishing to market their goods in the West Bank to use local Palestinian agents and distributors. Using Israeli agents for Palestinian markets does not utilize local, Palestinian market expertise, and does not allow U.S. firms to maximize their sales exposure to the local market. We can help you find well qualified Palestinian agents and distributors for your products.

Market Overview

  • In 2012 the GDP of the West Bank and Gaza (WB/G) reached an estimated $10.30 billion with $7.70 billion in WB and $2.6 billion in Gaza.
  • In 2012 the Palestinian population was 4.29 million with 2.65 in the West Bank and 1.64 million in Gaza.
  • Despite relatively low incomes, there is a sizeable middle/upper-middle class in the West Bank and Gaza. The West Bank and Gaza boast one of the highest per capita rates of university graduates in the Arab world. Palestinians have a long-standing tradition of spending generously on higher education, regarded as an asset.
  • In 2012 Palestinian imports of goods and services reached $3.83 billion, and exports were $739.1 million. West Bank and Gaza imports come mostly from Israel, Turkey and China; imports from Jordan have risen in recent years.
  • The Palestinian market relies heavily on Israel as a trading partner; it accounts for 72% of total Palestinian imports and 90% of Palestinian exports. Business people within the West Bank are eager to diversify the number and location of their trading partners.
  • In 2012, imports from the U.S., both direct and indirect, were estimated by the U.S. Commercial Service at $200 million.
  • The information technology sector is a growing area of the Palestinian market, as are cellular and landline telephone services. Palestinian stone and marble exports have remained strong, in particular to the United States. The handicraft market has begun to expand into export markets for a range of products.
  • International donor investment in basic and social infrastructure in West Bank and Gaza will continue to present opportunities for U.S. contractors. From 1994 through 2010, the U.S. Agency for International Development (USAID) has provided more than $4.2 billion in economic assistance to Palestinians living in the West Bank and Gaza. However, donor investments on the whole have been declining.

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Market Challenges

  • The Second Intifada that began in the fall of 2000 significantly damaged the West Bank and Gaza economic and commercial environment. Movement of goods into and out of Palestinian markets has been since heavily restricted.
  • The June 2007 takeover of the Gaza Strip by Hamas has resulted in the closure of borders with Israel and the cessation of most trade between Gaza and the outside world, including the West Bank. Recently, more goods, including new vehicles, are flowing into Gaza due to an easing of Israeli restrictions.
  • Commercial law differs between the West Bank and Gaza. In the West Bank, Jordanian and Ottoman laws typically apply, while in Gaza it is usually Egyptian or British Mandate laws.
  • The West Bank and Gaza remain highly dependent on Israeli supplies and export opportunities. All Palestinian exports must go through Israel or Israeli-controlled checkpoints. Recently, Israel has allowed the export of limited quantities of agricultural produce and flowers from Gaza to Europe through Israeli marketing channels.
  • The falling U.S. dollar exchange rate has reduced the real value of remittances from abroad; current exchange rate for $1 to New Israeli Shekels (NIS) is about NIS 3.70 versus NIS 4.30 four years ago. However, this has made American-made products more competitive.
  • The Israeli Standards Institution (ISI) adopts mostly European Standards and can delay shipments into Palestinian markets by requiring lengthy standards testing on products entering the West Bank and Gaza. The Palestinian Standards Institute plays a minor role because the Palestinian Authority has no control over the borders and cannot apply Palestinian standards on imports entering its areas.

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Market Opportunities

  • Infrastructure development, both donor and privately financed, is on the rise in the West Bank.
  • Projected major projects include an electric power generation plant and a national electricity distribution company in the West Bank; expansion of telecommunications infrastructure and services; sanitation upgrades and expansion, waste disposal, and water services; and road upgrades.
  • Expected future demand for private housing construction for middle and lower-middle-income families is expected to rise. There is a growing trend toward building large commercial and multi-story residential buildings. One new project, “Rawabi,” is under construction north of Ramallah, while another commercial and residential project, “El Ersal,” is in Ramallah.
  • Expansion can be expected in the local production of processed foods, olive oil, pharmaceuticals, textiles, hardware, wood and cane furniture, plastics, and housewares. Construction inputs, such as cement and steel products, also could see heavier demand.
  • Franchising and distributorships are popular, with the best prospects in fast food.
  • Imports of healthcare products, such as medical equipment and disposables, are increasing due to international donor support.

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