Israel is internationally recognised as a seat of innovation and creativity, noted for its thriving entrepreneurial spirit and pioneer technologies. It was ranked 3rd most innovative country in the world according to the 2015 - 2016 WEF Global Competitiveness Report.
Complimented by an unusually high availability of scientists and engineers (ranked 8th in the world according to the 2015 - 2016 WEF Global Competitiveness Report), Israel’s scientific excellence makes it a preferred hub for leading multinationals to establish their Research and Development (R&D) centres.
Foreign direct investment (FDI) inflows into Israel reached USD4.6 billion in 2014 according to UNCTAD's 2015 Global Investment Report.
Israel ranked 53rd in the World Bank's 2016 Doing Business rankings, falling from 50th in the year prior. Israel’s primary strength was in the Protecting Minority Investors topic where it ranked eighth in the world. The rankings recognised that Israel made paying taxes more costly for companies by increasing the corporate income tax rate, the rate for social security contributions paid by employers for the upper wage bracket and municipal taxes.
Key facts about starting a business in Israel:
While Israel's attractiveness as an investment location can be attributed to a number of factors, including its liberal investment policy and high investment in research and development it is important to understand the nuances of any local regime. The manner in which people conduct business in Israel may differ from the home countries of investors. Furthermore, variations on these distinctions may exist depending on the regions and the industry in which a company operates.
Hebrew and Arabic are the official languages of Israel, although English is widely spoken and is the lingua franca of business. Business attire is typically smart-casual. A handshake is the typical business greeting and will be used at the beginning of a meeting. Business cards may be presented after initial introductions. Gift giving is not expected as part of business interactions.
Those looking to establish a business in Israel may look across alternative options. However, Israel can be differentiated on the following factors:
While there are significant benefits for investing in Israel, a number of potential challenges remain. The domestic market is relatively small and is characterised by high competition. Foreign investors may find that the cost of doing business is relatively expensive when compared to other OECD destinations.
This guide has been developed to provide businesses with an overview of Israel, its legal regime, start-up and market entry considerations, tax and customs requirements and a general summary of the factors that may affect the decision to do business in Israel. However, the information contained in this document is generic in nature and you should not act or rely on it without obtaining specific professional advice.
Please note that the Country Guides may only be available in English.
|1||Israeli Corporations Authority|
|2||Ministry of Finance|
|3||Ministry of Foreign Affairs|
|4||Israel Patent Office|
|5||Israeli Law, Information and Technology Authority|
|6||Ministry of Economy and Industry|
|2||Doing Business Rankings||3||Global Competitiveness Report|
Download Country Guide - Israel (2.83MB, PDF)
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