Investing in Israel

By: Adv. Eli Shimony

The State of Israel is a rapidly developing country, and as it requires investors and investment, it is also, on the other hand, highly attractive for investors looking for high-potential investments, whether such investors are Israeli or not. However, it is important to understand that not every investment in Israel, whatever the potential for its success, yields a positive return and realizes its potential. Investing in Israel, like any field, requires proper preparation as well as receiving correct and professional advice, including that of an Israeli lawyer familiar with the relevant Israeli laws.

Investing in Israel.

The Encouragement of Capital Investment Law and the Encouragement of Research and Development in Industry Law
The law most relevant to investing in Israel is the Encouragement of Capital Investment Law, 5719-1959, which is indeed a very old law, but one that has been and is updated often in order to adjust it to developments in various markets and our current-day reality.

This law is designed to encourage capital investments and economic enterprise in Israel, in order to develop the production capacity of the country’s economy, improve the ability of the business sector to compete in international markets, advance the periphery, and create new workplaces. For this purpose, the law determines rules and conditions for granting reliefs to investors in Israel, including by significant reduction of the tax burden and granting reliefs in receiving approvals and licenses; in addition, it also grants benefits such as loans on preferential terms and even significant financial grants. Thorough knowledge of this law and exhaustive use of the opportunities it entails can work wonders toward the chances of success of any investment in Israel, and of course, even toward turning a failed investment into a successful and profitable one for all parties involved.

Another law, that is similar in nature to the Capital Investment Law, is the Encouragement of Research and Development Law, 5749-1984 (the R&D Law), which is focused on promoting investment in hi-tech industries in Israel, such as biotechnology and nanotechnology. The person in charge of this law is the Chief Scientist of the Ministry of Economy, through the Research Fund, and by virtue of this law, too, it is possible to receive a variety of benefits, grants, loans, and exemptions for investing in Israel that create workplaces, develop industry and improve consumers’ welfare.

The Ministry of Economy.

The most significant authority for investments in Israel is the Ministry of Economy (until recently the Ministry of Industry, Trade and Tourism), which in addition to the foregoing Chief Scientist’s Research Fund, is also in charge of implementing the Encouragement of Capital Investment Law and for providing assistance under the law, through the Investment Center, which also includes incentive programs for employers as well as support for investing in Israel, pursuant to government policy. Thus, for example, preference is given to investments in the green economy, and as is relevant at the moment, incentives and tax benefits are also given to investments in building residential apartments for lease.

The Ministry of Economy also includes other bodies, such as the Foreign Investment Promotion Center, and the Small and Medium-Sized Business Agency, for support even to relatively limited investments through the Small and Medium-Sized Business Fund, under a state guarantee, to which the Accountant General of the Ministry of Finance is also a partner; as well as additional funds relevant to niche markets which it has been decided to promote. In addition, the Ministry of Economy operates programs that investors in Israel must be familiar with, if they desire to succeed and make the best use of everything the state can offer, such as the Program for Promoting Water and Renewable Energy Technologies.

What all these bodies and programs have in common, is that great use of them can be made, by approaching for professional preliminary consultations from an expert on investments in Israel, who is familiar with Israeli law, the relevant laws and regulations as well as government plans and the investment support funds.

Eli Shimony – Israeli law firm represents clients on all legal matters in Israel. For any questions please contact us and we will be happy to assist.
By email: [email protected], By phone: +972-52-2769773, +972-3-5507155.
The above is only general information and does not replace legal advice which is usually necessary before taking legal proceedings.


Adv. Eli Shimony

Attorney Eli Shimony holds a bachelor's degree in law (LL.B) and a master's degree in business administration (MBA), brings a broad legal knowledge in his areas of expertise. In addition, attorney Shimony holds a wide range of professional certifications in the fields of civil law, banking, compliance, intellectual property, corporate law and more... Attorney Shimony's main areas of practice: Civil and Commercial Litigation, Class actions, Mediation and Arbitration, Intellectual Property, Companies, Real estate, Wills and Inheritances, Monetary claims, Crypto Currencies, Banking, Compliance and Investments.

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