Foreign direct investment (FDI) inflows into Israel reached USD4.6 billion in 2014, according to UNCTAD's 2015 Global Investment Report. This represented a decrease of almost 50 per cent over the previous year.
Israel ranked 53rd in the World Bank's 2016 Doing Business rankings, falling from 50th in the previous year. Israel's primary strength was in the 'Protecting Minority Investors' category, where it ranked eighth in the world. The rankings recognized 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:
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 (R&D). Nevertheless, in order to make an informed decision, it is critical to understand the nuances of any local system. 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 region and the industry in which a company operates.
Hebrew and Arabic are the official languages of Israel, although English is widely spoken. 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 the Middle East for alternative options. However, Israel can be differentiated on the following factors:
While there are significant opportunities for investment in Israel, a number of challenges remain. Corporate tax rates are relatively high, and the time needed to pay taxes is higher than the average across OECD high-income countries. Investors must also remain aware of the geopolitical instability arising from the region's political environment.
This guide has been developed to provide businesses with an overview of Israel, its legal system, 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.
|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|
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