encouraging investment

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1 Iris Stark, CPA

2 island of stability Against the background of uncertainty created by the global financial and economic crisis, Israel is still an island of stability. It has come through the crisis without significant harm to the country s development. This economic stability was achieved thanks to the establishment of fiscal discipline, reflected in tight budgetary policies, a cutback in government spending and reduced public debt.

3 island of stability Securing economic stability enables the Israeli government to implement significant reforms in the economy, thereby increasing competition in diverse fields, and offering various opportunities for potential investment in the country.

4 encouraging investment With a view to encouraging investment, the government focuses on developing the natural gas sector and providing agricultural expertise worldwide. It promotes Israel as an international center for technological know-how. In 2011, the Israeli GDP increased by 4.8%, up from 2010

5 INFRASTRUCTURE Israel offers a broad and solid infrastructure to entrepreneurs, investors and business people in all sectors. The Israeli banking system is a modern, automated, computerized and well-established component of the international banking system. Diverse services required by the business sector such as, insurance and legal services, and manpower and communications facilities are available in the most sophisticated formats.

6 INFRASTRUCTURE There is an advanced domestic and international transportation system, with an extensive inter-urban highway network. New highways are constantly being built to enable fast and safe mobility throughout the country. Israel is linked to the rest of the world via extensive air and sea networks.

7 ISRAEL S HI-TECH INDUSTRY The technology industry in Israel has been the driving force of the nation s economy, and has played a prominent role in Israel s economic development. Only 25 years ago, most of the country s technology was concentrated in military and security-related industries. Today, Israeli companies have a strong foundation in hi-tech industries worldwide, and Israeli companies are ranked high on the Nasdaq.

8 ISRAEL S HI-TECH INDUSTRY In 2011 approximately 546 Israeli hi-tech companies raised $2.14 billion from local and foreign investors 69% higher than the $1.26 billion raised in Hi-tech exports totaled $21 billion in 2011, reflecting a 6% increase compared with 2010.

9 THE VENTURE CAPITAL INDUSTRY Israel s venture capital industry has played a fundamental role in the dramatic development of the hi-tech industry. Deloitte ranked Israel 4 th in investment in the VC industry after the US, Brazil and China. We heard Mr. Erel Margalit, founder of Jerusalem Venture Partners, who gave us an in-depth look into the world of VC.

10 THE BIOTECHNOLOGY INDUSTRY IN ISRAEL Total investment in life science companies during 2011 amounted to $395 million, reflecting an increase of 13% compared with 2010.

11 TRADE AGREEMENTS Israel has entered into several trade agreements worldwide in order to strengthen its position in international markets. The agreements offer advantages to all parties with regard to international trade.

12 PROPRIETARY RIGHTS Israel is a member of the World Intellectual Property Organization (WIPO). It respects international standards with regard to intellectual property, patents, trademarks and copyright under the protection of proprietary rights.

13 THE LAW FOR THE ENCOURAGEMENT OF CAPITAL INDUSTRY The State of Israel encourages investments from both Israeli and foreign residents by offering a wide range of incentives and benefits. It offers these benefits through a number of laws and regulations. For instance, greater benefits are granted if an enterprise is located in a priority region the Galilee, Jordan Valley, the Negev and Jerusalem. However, enterprises are eligible for benefits anywhere they are erected, provided they comply with the relevant criteria.

14 THE LAW FOR THE ENCOURAGEMENT OF CAPITAL INDUSTRY The Law offers business entrepreneurs tax breaks in a broad range of industrial enterprises, such as textiles, food, electronics, chemicals, pharmaceuticals, computer software, renewal energies, hotels, tourism ventures, industrial and residential construction and more. The Israeli government also offers investment grants

15 SMEs The Small Business Authority of Israel was established in 1993 to encourage small businesses and entrepreneurs. The Government funding helps to establish or expand small businesses, while the government provides bank guarantees to serve as collateral for commercial loans.

16 RESEARCH AND DEVELOPMENT Numerous research and development programs provide a wide range of incentives to companies engaged in R & D activities.

17 STARK & STARK INVOLVEMENT Stark and Stark is well-placed to offer its services to the local and international community through its involvement in and familiarity with various government ministries and projects

18 Special tips for doing business in Israel

19 Special tips for doing business in Israel Sabra is the term used to describe a native-born Israeli. A sabra is a desert plant, known in English as the prickly pear, with a thick skin on the outside that hides a soft, sweet interior. It is compared to Israelis who tough on the outside, but delicate and sweet on the inside

20 Special tips for doing business in Israel The smiles and handshakes look the same, even the suits and ties, but after a few minutes have passed, both sides that have come together with great respect and mutual admiration, will feel that something is different

21 Special tips for doing business in Israel The Israeli, who is often seen as being arrogant, aggressive and pushy, is actually being direct and honest, while the American, European and Asian are displaying politeness and respect. Israeli culture generally dismisses formality, and acts in a direct, immediate and honest fashion.

22 Special tips for doing business in Israel Israelis may very likely use the title Mr or Mrs/Ms when addressing you, even though they are quite happy if you address them by their first name. You may invite them to address you by your first name. You can always expect a friendly and real invitation for sharing coffee as a meeting begins.

23 Special tips for doing business in Israel The Israeli is ready for immediate action. Many Israelis sit leaning forward, ready to start at a moment s notice. They are a very passionate and expressive people. Raising their voices is the way Israelis normally communicate with one another. They are curious people, and are not shy to ask very personal questions.

24 Special tips for doing business in Israel Israelis want things done today. Now! The Israeli business person may perceive you as not being serious if you talk in terms of months and years. Be prepared for tough and friendly negotiations. Punctuality is relaxed. Always allow up to minutes before thinking that your party is late.

25 Special tips for doing business in Israel Most Israeli businesspeople conduct business quite comfortably in English. It might be advisable, however, to hire a professional translator. This prevents you from being left in the dark, and keeps you on the same page as the Israeli business person.

26 Special tips for doing business in Israel Get things in writing! No matter how warm and friendly your relationship may become, a handshake is never good enough! Israeli business people regard the written contract literally, and they expect the same in return.

27 Special tips for doing business in Israel One of the best places to begin your negotiations may be with your taxi driver. Make sure that when you get into the taxi and your destination is within the city limits, that the meter is always turned on. For travel between cities, there are fixed rates for which the driver should have a book to show you the prices.

28 Special tips for doing business in Israel Know your colleagues religious views. Israeli culture plays host to a number of different religions, including Judaism, Islam and Christianity. Be aware of different dress codes when interacting with religious colleagues.

29 Special tips for doing business in Israel Be aware of the many Jewish holidays in September or October when scheduling meetings. During the month of Ramadan, Muslim Israelis have shorter business hours, and they fast during the daytime.

30 Special tips for doing business in Israel The Israeli work week, spans from Sunday to Thursday. The Sabbath starts on Friday at sunset and ends on Saturday at sunset. Muslims in Israel generally do not work on Friday, and some Christians do not work on Sunday.

31 Special tips for doing business in Israel When Israelis invite you to their homes or out for dinner, they are not just being polite they are displaying sincere friendship. The Israelis are good business partners In short, we hope that during your stay with us, we will share our diverse cultures, and promote good will and understanding across IAPA.

32 Thank you for listening