While initial receptive to external investment, the government has hampered progress over issues relating tax and access to exports.
May 18, 2021
Israel has an income tax regime that is applicable across all industries, and it has a windfall tax for oil and gas activities.
Israel has an entrepreneurial spirit and a creative, highly educated, skilled, and diverse workforce. Israel invests heavily in education and scientific research. Various Israeli government agencies, led by the Israel Innovation Authority, fund incubators for early stage technology start-ups, and Israel provides extensive support for new ideas and technologies while also seeking to develop traditional industries. With low inflation and fiscal deficits that have usually met targets, most analysts consider Israeli government economic policies as generally sound and supportive of growth. Incentives and benefits include grants, reduced tax rates, tax exemptions, and other tax-related benefits. The Israeli government generally continues to take slow, deliberate actions to remove some trade barriers and encourage capital investment, including foreign investment. The continued existence of trade barriers and monopolies, however, have contributed significantly to the high cost of living and the lack of competition in key sectors. The Israeli government maintains some protective trade policies, usually in favour of domestic producers.
Source: ESRI, Heritage Index, HMG Foreign & Commonwealth Office, US Department of State, International Trade Administration, International Law Review, Ernst & Young, Wood Makenzie & OGA data.
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