Regulatory Alerts2022-01-01
Circular No. 81/2022: Implementation of the National Definition and Classification of Economic Enterprises
The Palestine Monetary Authority issued Circular No. 81/2022 to mandate all lending institutions operating in Palestine to accurately report employee counts and sales volumes via the credit registry when granting credit facilities. This directive enforces Cabinet Decision No. 18/115 of 2021, which establishes a national five-tier classification system for economic enterprises based on employee numbers and annual turnover thresholds ranging from USD 100,000 to over USD 2,000,000. The classification categorizes businesses into Micro, Very Small, Small, Medium, and Large segments to standardize regulatory reporting and support targeted economic development policies.
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==Screenshot for page 1== [Logo of the Palestine Monetary Authority] Palestine Monetary Authority
PALESTINE MONETARY AUTHORITY
Circular No. (81/2022) To all lending institutions operating in Palestine Date: Sunday, April 03, 2022
Subject: Implementation of the National Definition and Classification of Economic Enterprises
In order to implement the definition and classification of economic enterprises in accordance with Cabinet Decision No. (18/115/11/C.M./M.A.) of 2021 regarding the National Definition and Classification of Economic Enterprises, all lending institutions must correctly declare the total and part-time number of employees and sales volume through the credit registry opening screens when declaring credit facilities granted to all economic enterprises.
[Signature] Financial Stability Group Palestine Monetary Authority
Enclosed: Cabinet Decision No. (18/115/11/C.M./M.A.) of 2021 regarding the National Definition and Classification of Economic Enterprises.
www.pma.ps Ramallah and Al-Bireh Governorate - Palestine P.O. Box 452 | Tel: +970 2 2415251 | Fax: +970 2 2415310 | info@pma.ps Gaza - Palestine P.O. Box 4026 | Tel: +970 8 2825713 | Fax: +970 8 2844487
==Screenshot for page 2== STATE OF PALESTINE Council of Ministers Cabinet Secretariat
Reference (A.A.M./2021/1634) June 29, 2021
His Excellency Mr. Khaled Al-Assily, Minister of National Economy
Subject: National Definition and Classification of Micro, Small, Medium, and Large Economic Enterprises
The General Secretariat of the Council of Ministers extends its best regards and informs you of the Cabinet Decision issued during its weekly session No. (18/115) held on June 28, 2021, regarding the National Definition and Classification of Micro, Small, Medium, and Large Economic Enterprises.
Kindly take the necessary measures to implement the decision. Yours sincerely,
Dr. Amjad Ghanem General Secretary of the Council of Ministers [Stamp: Prime Ministry - General Secretariat - State of Palestine]
Enclosed: The aforementioned decision. Copy: His Excellency the Prime Minister
==Screenshot for page 3== STATE OF PALESTINE Council of Ministers Cabinet Decision No. (11/115/18/C.M./M.A.) of 2021 National Definition and Classification of Micro, Small, Medium, and Large Economic Enterprises
Based on the powers vested in us by law, upon the proposal of the Minister of National Economy, and in light of public interest requirements, and after reviewing the amended Basic Law of 2003 and its amendments; the Companies Law No. (12) of 1964 and its amendments; and Cabinet Decision No. (13/105/01/C.M./S.F.) of 2011; the Council of Ministers decided in its session held in Ramallah on June 28, 2021, as follows:
Article One Approval of the amendment to the National Definition and Classification of Micro, Small, Medium, and Large Economic Enterprises.
Article Two Economic enterprises in Palestine are classified into five categories: (Micro, Very Small, Small, Medium, and Large) based on the criteria outlined in the following table:
| Classification | Number of Employees | Annual Turnover |
|---|---|---|
| Micro | 1-4 | Provided that turnover does not exceed USD 100,000 |
| Very Small | 5-9 | Provided that turnover does not exceed USD 200,000 |
| Small | 10-19 | Provided that turnover does not exceed USD 500,000 |
| Medium | 20-49 | Provided that turnover does not exceed USD 2,000,000 |
| Large | 50+ | Turnover exceeds USD 2,000,000 |
==Screenshot for page 4== STATE OF PALESTINE Council of Ministers
Article Three All relevant authorities shall provide the necessary facilitations to implement this classification.
Article Four For the purpose of applying the definition to develop policies and strategies for empowering and developing economic enterprises according to the aforementioned classification, the Ministry of National Economy shall coordinate with the Ministry of Finance, the Palestine Monetary Authority, and the Capital Market Authority.
Article Five All provisions conflicting with this decision are hereby repealed.
Article Six The competent authorities shall implement the provisions of this decision according to their respective jurisdictions, and it shall take effect from the date of its issuance.
Issued in Ramallah on June 28, 2021.
Mohammad Shtayyeh Prime Minister [Stamp: Prime Ministry - General Secretariat - State of Palestine]
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