Israel today offers more investment and development opportunities than anywhere in the world. With a booming economy, a strong financial sector, an educated workforce and generous tax incentives to foreign investors, Israel is the ideal location to expand expand your business. At Dorot Law, P.A., with a proficiency in both the language and the culture, we assist our clients in entering the cultivated market of Israel and bridge the cultural gap in order to facilitate international business and trade. Whether you are looking to import from or export to Israel, whether you are looking to build a production plant or an R&D hub for your existing business, Dorot Law, P.A. will navigate you through the legal, political and cultural barriers so you can take advantage of the bustling business environment.
Per capita, Israel has more high-tech startups, scientists and engineers, research and development spending, venture capital investment, and patents registered in the United States than any other country in the world.
Israel is one of the most resilient and technologically-advanced market economies in the world. Its skilled workforce and concentration of venture capital allow the country to lead in innovative industries such as high-tech, cleantech, and the life sciences.
The most recent global financial crisis in 2009 produced a brief period of recession in Israel, but the country’s prudent fiscal policies and regulations, combined with a particularly robust banking sector, allowed the economy to recover quickly.
Israel consistently ranks high among the world’s economies in terms of its technological readiness, venture capital availability, and the quality of its research organizations. The country ranks 1st in availability of scientists and engineers, number of start-ups per capita, and venture capital investments per capita.
Over the years, Israel has experienced a high average rate of growth. Given its small consumer market domestically, Israel has strategically turned beyond its borders to sell its products and offer its technologies. This year, Israel was unanimously voted to join the Organization for Economic Cooperation and Development, signifying its status as one of the world’s 34 most developed economies.
The State of Israel encourages both local and foreign investment by offering a wide range of incentives and benefits to investors in industry, tourism and real estate. Special emphasis is given to hi-tech companies and R&D activities.
Investment incentives are outlined in the Law for the Encouragement of Capital Investment which was recently revised. The new Law differs from the previous one in that it adds a new path for incentives – an automatic one. The incentive programs can be divided into 2 main types:
-
The Grants program – administered by the Israel Investment Center (IIC), a department of the Ministry of Industry, Trade and Labor
-
The Automatic Tax Benefits program – administered by the Tax Authorities.
To qualify, investment projects must meet certain criteria including: international competitiveness, minimal designated investment, high added value and registration of the company in Israel. Once these criteria are met the enterprise gains Approved Enterprise status from the IIC if it chooses the grants program and Preferred Enterprise status by the Tax Authority if it chooses one of the tax benefits programs. It is then eligible for incentives, such as grants of up to 24% of tangible fixed assets (grants program only) and/or reduced tax rates, tax exemptions and other tax related benefits.
Useful Links
In the News and Relevant Publications
February 11, 2011. IRS gives ‘last chance’ to disclose offshore accounts (Ha’Aretz). The U.S. Internal Revenue Service is launching a second round of its voluntary disclosure program, which offers reduced penalties for American citizens who have previously failed to report offshore accounts, the agency announced this week. The new initiative – the “last chance” to come clean, according to the IRS – will be available through August 31, 2011…
January 26, 2011. Leviev buys AFI Development shares (Globes). The shares belong to AFI Development CEO Alexander Khaldey. Africa-Israel Investments Ltd. (TASE:AFIL), controlled by chairman Lev Leviev, has agreed to buy 9.7% of the shares in its Russian development arm, AFI Development plc (LSE:AFID) for $129 million. Leviev is buying the entire stake in AFI Development from the subsidiary’s CEO Alexander Khaldey, who owns the shares through his company, Nirro Group. He will continue in his post…
January 26, 2011. Israel Bids to Prevent Shekel’s Rise (Wall Street Journal). JERUSALEM – The head of Israel’s National Economic Office, Eugene Kandel, on Wednesday outlined some of the policies the Israeli government is pushing in its bid to keep the shekel’s value down, including new measures to stem inflows of capital. Mr. Kandel, a U.S.-educated economist who spearheads Prime Minister Benjamin Netanyahu’s influential economic policy, said the policy reforms were aimed at reining in chronic balance-of-payments surpluses that are putting constant upward pressure on the shekel, which currently trades …
January 9, 2011. Israeli start-ups raised $11.1b VC in past decade (Globes). PricewaterhouseCooper Israel MoneyTree Report 2001-2010: start-ups in Israel raised $884 million in 2010 (Globes Israel). Israeli start-ups raised $11.1 billion in venture capital over the past decade according to the Israel MoneyTree Report for 2001-2010 by PricewaterhouseCooper Israel. Over the same period PwC reported that US start-ups raised $247 billion. PwC Israel reported that Israeli start-ups raised $884 million in venture capital in 2010, up 20% from 2009 but down 37% from 2008…
January 6, 2011. Israel firm buys 21 units at Miami’s Marquis Residences (Miami Herald). An Israel-based company has bought 21 condominium units at the Marquis Residences in downtown Miami, paying a total of $8.6 million…
December, 2010. The Dangers to Companies that Have Failed to Pay their Annual Fee or File their Annual Report and the Promotional Campaign. In January 2010, Amendment No. 10 to the Companies Law, 1999 became effective, whereby the Registrar of Companies was granted additional enforcement authority towards all corporations conducting business in Israel in order to guarantee that corporations would fulfill their lawful duties of paying the Annual Fee and submitting the Annual Reporti to the Registrar of Companies. Companies which fail to fulfill one or both of those obligations shall expect to be declared a “Company Violating the Law”…
June, 2010. Facts and Tips Concerning Purchase Tax for Recent and Prospective Olim. Overview – Purchase Tax, Mas Rechisha, is a tax imposed upon purchasers of Israeli real property, such as residential and commercial units, empty plots for construction, agricultural land and farms, and so forth. The tax rate is progressive and based on the value of the transaction, and additionally on several factors, including reductions afforded to certain categories of purchasers…
June, 2010. Purchase Tax on Israeli Real Property. On the surface, the real estate purchase/acquisition tax, known as Mas Rechisha, appears to be the most straightforward aspect of a real estate transaction as the tax to be paid is calculated based on the purchase price of the asset. After the many hours of energy consumed in negotiating the purchase price and terms of the transaction, something straightforward should be quite welcome. However, knowledge, planning and strategizing will help you maximize any reductions or tax benefits you may have. This article will focus on the purchase tax applicable in purchases of residential units rather than commercial properties or land…
July, 2010. How Tax Planning Between Israel and the United States Can Significantly Reduce Your Taxes. This article is the first of two that will provide an overview of U.S. and Israeli personal income tax and estate tax (taxes paid at the time of death). The article is intended for people who live, or plan to move to Israel, and to U.S. parents with children in Israel. It is also relevant for business people with activity in the U.S. who are neither U.S. citizens or green card holders…
February, 2010. A Practical Guide and an Overview of the Israeli Companies Law as to Privately Held Companies. The following article is intended to provide a practical guide and an overview to the Israeli Companies Law, 1999 as it relates to the establishment and governance of limited liability companies…
November, 2009. What Buyers Should Know About the Ownership Structure of Their Home in Israel. As an attorney handling purchases of Israeli real estate by many foreign residents as well as “Olim”, amongst other areas of law, I am often asked, “So, when I turn 120, does the ownership of our Israeli home automatically go to my spouse?”.” While the answer to the above query may be affirmative in many foreign jurisdictions where property is held in joint tenancy with right of survivorship (which in short means that each owner has an equal right to share in the use and enjoyment of the property during their lifetime and upon the death of one owner…
November, 2009. Legal Aspects of Purchasing an Apartment in Israel. The system of registering rights in land and the process of consummating a real estate transaction in Israel are quite different from those in the U.S. Many people are not aware of this but about 80% of the land in Israel is owned by the government, through a body known as the Israel Lands Administration (‘Minhal’). Land which is owned by the ILA is not registered…
