Episode four of «Ambassadors of Freedom & Entrepreneurship»: the obstacles to founding start-ups and their legal framework

Continuing its efforts to develop entrepreneurs' skills and strengthen their access to the fundamentals of building their own enterprises to advance the Palestinian economy through the project “Empowering youth in entrepreneurship and small enterprises”, Pal-Think for Strategic Studies, with funding from the Atlas Network, carried out on Thursday the fourth radio episode, in which the trainees Ashraf Sukkar and Hind Adwan discussed their research paper titled “The obstacles to establishing entrepreneurial projects and the legal framework governing them” — within the programme “Ambassadors of Freedom and Entrepreneurship”, broadcast on the local Zaman radio at noon on Tuesdays and Thursdays.

Adwan said Pal-Think's training was engaging and rich in information, resting on interactive participation between trainers and trainees of different educational, cultural, and environmental backgrounds — which contributed to strengthening the training environment, for entrepreneurship centres on applying an idea or making or marketing a product in a particular environment; so the trainees learned of the entrepreneurial products and ideas that can be applied in multiple environments in the Gaza Strip.

She affirmed that entrepreneurial projects strengthen material income and the entrepreneur's self-confidence, contribute to developing and improving the living conditions of society's members, curb unemployment, and empower the marginalised.

She showed that the obstacles facing enterprises lie in the blockade — which limits project owners' travel to conclude business partnerships — the ban on raw materials, and the scarcity of funding sources.

As for the principal benefits of registering enterprises with the competent ministries, according to the trainee, they are the provision of guarantees and incentives to investors, and the provision of a single competent body to answer all enquiries.

For his part, the trainee Ashraf Sukkar said the project's principal goal is to make the trainees aware of the importance of entrepreneurial projects, the competition they will face, and the administrative and legal obstacles; to train them in preparing a feasibility study; and in how to search for ideas for distinctive projects.

He pointed out that 95% of existing small entrepreneurial projects are owned by youth, noting that most projects fail within the first year because their owners lack sufficient skills and capacity — explaining that the trainees held meetings with owners of successful start-up entrepreneurial projects and of others that failed, to examine the causes of the failure and success of entrepreneurial projects in the Gaza Strip.

Sukkar stressed the importance of entrepreneurial projects, as they employ 82% of the workforce and count as a fundamental pillar of the national economy.

As for the funding sources of small enterprises in Gaza, they are: 21% through young people's personal savings, 30% from family savings, 19% through loans, and 10% funded from other sources.

Sukkar shed light on the great difficulties facing youth in launching their entrepreneurial projects — the cost of establishing projects and registration procedures that take 45 days — pointing out that the steps for registering small enterprises are the very same steps for registering large-capital enterprises and companies.

He said: “Many young people have not registered patents or intellectual-property rights because of the difficulty of the procedures. These causes, alongside the complexity of entrepreneurial procedures, have made Palestine rank 134th among the world's states in founding entrepreneurial projects”.

The trainee, who set out the steps of registering entrepreneurial projects in the Gaza Strip, explained that the Palestinian investment-promotion law of 2011 speaks of medium and large projects exceeding 250 thousand dollars and offers them tax exemptions, while small and micro entrepreneurial projects are not exempted from taxes for want of laws specifically regulating them — although they are the economy's foundation.

Sukkar concluded with some of the solutions he and his colleague Hind Adwan proposed in their research paper, such as: removing the barriers and taxes between the West Bank and the Gaza Strip to ease the marketing of Palestinian products; the competent bodies offering guarantees to owners of entrepreneurial projects to obtain soft loans from the banks; and easing the procedures of registering small entrepreneurial projects.