Israel: Invertir a Israel
Israel has a liberal investment system and most activities are open to both private national and foreign investors, ranking the country 15th among FDI-receiving nations worldwide. According to UNCTAD's World Investment Report 2023, Israel's investment flow increased by 29.2% in 2022, reaching USD 27.7 billion. In the same year, the stock of FDI stood at USD 235.1 billion, around 45% of the country’s GDP. Most of the FDI to Israel is directed towards manufacturing (especially for electronics equipment, like computers), information and communication, professional, scientific and technical activities, and financial and insurance activities. In terms of countries, the United States and the Netherlands are the main partners (U.S. firms account for nearly two-thirds of the more than 300 research and development centres established by multinational companies in the country). Furthermore, Chinese investment in Israel has grown rapidly in recent years, particularly in software, IT services and consumer electronics. According to OECD data, FDI flows to Israel amounted to USD 6.7 billion in the first half of 2023, down by 24% from the level recorded in the same period one year earlier (USD 8.8 billion).
Israel has a number of assets appealing to foreign investors, including a high-skilled and multilingual workforce and a strong R&D sector (at 5.6% of GDP, it has the world's highest R&D intensity, almost twice the OECD average of 3.01% - World Bank), advanced procedures and industrial technologies, governmental incentives and grants to foreign investors, a lean bureaucracy and a diversified economy. The hi-tech sector, especially start-ups, has attracted a great deal of foreign investment. However, the country's geopolitical environment is particularly unstable because of tensions with the Palestinian territories and support for American policy by Israel (albeit improvements have been achieved in diplomatic and commercial relations with Arab countries such as the UAE, Morocco, and – to a lesser extent - Saudi Arabia). The instability worsened in 2023 following the escalation of the conflict with Hamas. Moreover, trade barriers and monopolies have contributed significantly to the high cost of living and the lack of competition in key sectors (where an entity supplies more than 50% of the market, the government controls prices). Israel ranks 14th among the 132 economies on the Global Innovation Index 2023 and 26th out of 184 countries on the 2023 Index of Economic Freedom.
Foreign Direct Investment | 2020 | 2021 | 2022 |
FDI Inward Flow (million USD) | 23,109 | 21,486 | 27,760 |
FDI Stock (million USD) | 184,312 | 226,590 | 235,151 |
Number of Greenfield Investments* | 47 | 79 | 76 |
Value of Greenfield Investments (million USD) | 1,524 | 2,816 | 1,706 |
Source: UNCTAD, Latest available data
Note: * Greenfield 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.
Country Comparison For the Protection of Investors | Israel | Middle East & North Africa | United States | Germany |
Index of Transaction Transparency* | 7.0 | 6.4 | 7.0 | 5.0 |
Index of Manager’s Responsibility** | 9.0 | 4.8 | 9.0 | 5.0 |
Index of Shareholders’ Power*** | 9.0 | 4.7 | 9.0 | 5.0 |
Source: Doing Business, Latest available data
Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action.
Israel has many strong advantages for FDI:
Main obstacles to the country's economic development:
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Actualitzacions: July 2024