FDI in Israel

Overview by Globlatrade.net:

FDI in Figures

The investment system in Israel is liberal and most of the activities are open to private national and foreign investors.  According to a report of the Bank of Israel, the flow of foreign direct investment (FDI) into Israel totaled USD 3.7 billion in 2009, which means a decrease of more than 50%  compared to 2007, and they have remained weak in 2010. This strong decline can be explained by the context of the global economy and most of all, the American economy because Israeli start-ups depend very much on the situation of the other side of the Atlantic.  Nevertheless, Israel benefits from these assets: a strong R&D activity and a high-skilled and multilingual workforce. However,  the country suffers from a particularly unstable geopolitical environment.

Foreign Direct Investment 2007 2008 2009
FDI Inward Flow (million USD) 8,798 10,877 3,892
FDI Stock (million USD) 62,223 64,005 71,258
Performance Index*, Ranking on 141 Economies 63 54 80
Potential Index**, Ranking on 141 Economies 25 27 -
Number of Greenfield Investments*** 21 41 20
FDI Inwards (in % of GFCF****) 28.1 30.0 28.5
FDI Stock (in % of GDP) 37.3 31.7 36.6

Source: UNCTAD

Note: * The UNCTAD Inward FDI Performance Index is Based on a Ratio of the Country's Share in Global FDI Inflows and its Share in Global GDP. ** The UNCTAD Inward FDI Potential Index is Based on 12 Economic and Structural Variables Such as GDP, Foreign Trade, FDI, Infrastructures, Energy Use, R&D, Education, Country Risk. *** Green Field Investments Are a Form of Foreign Direct Investment Where a Parent Company Starts a New Venture in a Foreign Country By Constructing New Operational Facilities From the Ground Up. **** Gross Fixed Capital Formation (GFCF) Measures the Value of Additions to Fixed Assets Purchased By Business, Government and Households Less Disposals of Fixed Assets Sold Off or Scrapped.

Form of Company Preferred By Foreign Investors
Public limited company
Form of Establishment Preferred By Foreign Investors
Subsidiary or branch.
Main Foreign Companies
Consult the "Success Stories" of foreign companies established in Israel, on the website of the Investment Promotion Agency.
Sources of Statistics
Bureau of statistics
Bank of Israel

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Why You Should Choose to Invest in Israel

Strong Points
Israel is the country which invests the most  in research and development (4.8% of the GDP) in the world. The country has a highly qualified manpower, particularly in engineering. The country is ranked 2 nd place in world, with regard to availability of venture capital. The government provides the necessary support to entrepreneurs.
Weak Points
Corporate tax is relatively high. The State of Israel has a significant public debt. Manpower costs are higher than Asian or East European countries. Lastly, Israel suffers from great geopolitical instability due to the political environment of the region.
Government Measures to Motivate or Restrict FDI
Foreign investment incentives, to encourage investment in Israel, are given through the recently revised law. The new law differs from the first one by the addition of a financial incentives plan.
For further information consult Invest in Israel.

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  • U.S. Commercial Service Israel

    U.S. Department Of Commerce, Israel