17+ Pros And Cons of Doing Business in Israel (Explained)

Israel is a well-known country located in the Mediterranean sea. It has developed at a higher and rapid rate from the past few years.

Business incentives and investment opportunities are flourishing in the country. The country is rapidly growing and developing with high technical skills. The economic graph of the country is also evolving with time.

This article will highlight some interesting aspects of doing business in Israel you need to consider before getting started.

Benefits of Doing Business in Israel The Drawbacks of Doing Business in Israel 
Good climate Gender inequality 
Investor Protection Low Population 

Advantages of Doing Business in Israel

  • Resources:

Israel is a highly resourceful country. Petroleum and oil resources are available in large amounts.

This makes the economy of the country highly strong and powerful. Mineral’s resources are available in the country, which makes the mining industry grow in Israel.

This opens a large number of opportunities for business owners and investors. Foreign companies and investors are highly attracted to the country for its resources.

  • Technology and Innovation:

The country is highly advanced in technology. The research and development industry in the country is positively booming. The country brings new technologies and innovative approaches to the world. 

  • Developed Agriculture Sector:

Despite being a desert country, with the help of its creative skills, the country has developed the agriculture sector in the country.

The country has great access to high internet service. This makes every part of the country reachable and connects every industry sector globally.

  • High education:

Israel believes in a high education system and produces a large number of young graduates every year. Advanced education plays a vital role in bringing and building up innovative approaches and agile minds.

From youngsters to experienced workers, every age group provides a deep-thinking ability and working with technical concepts and challenges. 

  • Skilled Workforce:

Israel’s education system highly focuses on practical ideas rather than a stringent grasping education system. This brings high powered and professional skilled minds to the team of the workforce.

Many successful companies have originated from the country due to the availability of a high-quality workforce.   

  • Geographic Location:

Israel has a business-friendly location. It maintains good relationships with its neighbouring countries, which makes it easier for businesses to expand and develop foreign trade.

The country’s market connects with the Egyptian market and also with the United States. The country has grown its business market at an extensive rate from the past few years.

  • Judiciary System:

The Judiciary system in the country successfully maintains a healthy and peaceful environment in the country. The crime rate is shallow, and highly strict rules and laws are implemented in the country.

Criminals are given severe punishment for any crime committed. This makes a safe and sound environment for the businesses to grow and develop without any fear.

  • Tax Policies:

Israel has business-friendly and investments-friendly tax policies. The corporate tax, VAT, estate tax, etc. are significantly less according to OECD norms. One can establish an offshore company in the country.

The company can have 100% foreign ownership. Foreign business owners have extra tax incentives to develop a company in the country. 

  • Less Capital Investment:

The corporate tax is up to 23%, and the profit tax depends on the company’s turnover. This tax policy helps small businesses and startups to develop and grow at less capital investment. Hence a large number of business leaders and entrepreneurs are attracted to the country due to tax incentives.

  • Lifestyle:

The lifestyle in Israel is costly. However, the quality of lifestyle is highly remarkable. The health care system is highly advanced and developed in the country.

The government of the country concentrates on developing and growing the comfortable lifestyle in the country. The country’s population is also low, which makes it easier to test any product before launching it to highly developed nations.

  • Infrastructure:

The country has ready-made sites to offer for starting a business. Many business parks and complexes are available in the country, to begin with, the company. Aviation services and ports are highly advanced in the country.

This makes it easier for business owners and entrepreneurs to travel across the border and connect with other countries.

Disadvantages of Doing Business in Israel

  • Cost of living:

The cost of living in Israel is very high, and it requires more capital in living. The essential services are costly in the country.

However, the quality of lifestyle is remarkable. Luxury goods are in high demand and are considered to be pride expressing ways in the country. This makes it difficult for new startups to survive in high capitation requiring industry.

  • Culture:

Israel is well known for its Jewish, Muslim, and Christian culture. However, in business markets, foreign companies are not warmly welcomed to participate and develop.

The hierarchy system is still prevalent in the country. This leads to an unhealthy environment for businesses to grow and develop in the country. 

  • Partiality Between Citizens and Non-Citizens:

Country citizens are given more opportunities at higher positions than non-country citizens, and this leads to the implantation of seeds of jealousy among coworkers. This brings hurdles for any company to develop and expand with an unhealthy team.

  • Solving Insolvency:

Israel also shows a low recovery rate after insolvency strikes any company. Once any company gets stuck in an insolvency whirl, it takes up to years on average to get a satisfactory solution.

Moreover, the company suffers from high economic downfall, and the recovery rate is also prolonged. This makes it very difficult for any company to develop and expand even after solving insolvency.

  • Enforcement of Contracts:

Israel also lacks the speedy enforcement of the contracts. It takes up to months to enforce any agreement. Moreover, the company has to approve the deal among the local business community.

The government departments have to be visited for the legalization process. This takes a lot of time in the company and results in hurdles in developing and expanding.

  • Developing Country:

Israel is still a developing country. It has made a remarkable growth in terms of economy and technology from the past few years. However, the country is still developing and lacks power like highly developed countries.

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