Go to Top

Going To Israel

These pages have been developed for new and less experienced exporters. They offer practical tips and assistance to sell successfully to these markets. Experienced exporters will also find plenty to help them.

Israel – An exporter’s overview

  • Israel has a population of just over 6 million people yet it’s become a remarkable success story for British Exporters. Here are some of the reasons why British exporters enjoy an especially successful business relationship with Israel.
  • Israel has a highly trained workforce.
  • Its business methods are comparable with Western Europe.
  • The Israeli economy functions the same as Western Europe.
  • Israel’s high gross national product (GNP) per capita exceeds those of several EU Member States.
  • Company law is based on English law.
  • Israelis are multilingual and English is widely spoken.

British business people are welcomed, provided they meet their promises on price, quality, delivery and customer service.

British companies are advised to appoint a local agent or distributor in addition to visiting the market regularly, as Israelis prefer to conduct business in person.

For more information regarding market possibilities, business and social practices and general information on the Israeli import system, please consult Trade Partners UK’s Israel Unit and the Commercial Section of the British Embassy in Tel Aviv.

UK-Israel relations

Trading between the UK and Israel (the UK’s largest customer in the Middle East after Saudi Arabia) has been extremely buoyant It is estimated that two-way trading will reach 3 billion by 2004.
The importance of friendship and trade has been recognised by both countries. In 1995 the Business Council (IBBC) was established. The aim of the Council is to build on the already strong trading relationship between the UK and Israel. In February 1997, President Weizman visited the UK on the first State visit between the two countries and Prime Minister Tony Blair visited Israel in spring 1998.

Capital City

Tel Aviv is the business and financial capital of the country. Most foreign embassies and company head offices are located there as well as half of Israel’s industries.
Jerusalem, with a population of over half a million, is the administrative capital and the seat of government, with most of the principal government offices. It has a rapidly growing light industry and tourism.

Language

The official languages of Israel are Hebrew and Arabic. English, Russian and French are widely spoken. English is the language of commerce.

International dialling code from UK

00 972

Local Currency

Israel’s currency is the NEW Israeli Shekel (NIS). One NIS is divided into 100 agorot. The denominations in circulation are:

Banknotes:

20 NIS
50 NIS
100 NIS
200 NIS
500 NIS

Coins:

5, 10, 50 agarot and NIS 1, 2, 5

Most foreign currencies are accepted, with the US dollar being the most readily accepted. Most major international credit and charge cards are also accepted. Almost all tourist services, including tours and hotel accommodation, should be paid in foreign currency traveller’s cheques/credit or by charge cards. This enables these services to be exempt from value added tax which would otherwise be levied if you paid in local currency.

Foreign exchange

Israel has no foreign currency restrictions.

Weights and Measures

The metric system is used. Land is measured by the Dunam, which is 1,000 sq metres.

Economic Overview

Israel has a developed mixed market economy. Similar to the countries of Western Europe, its citizens enjoy a high standard of living. In 1997, the World Bank classified Israel as one of the 23 developed economies of the world, and since then the economy has continued to develop, despite the present difficulties.

The past few years have seen the emergence of the ‘new economy’ based on the Venture Capital/High Tech sector highlighted by the success of companies such as Intel, Checkpoint, Amdocs, and Comverse. Israel is now ranked 10th in the world for Venture Capital investment. The term Israeli Technology has already gained credence as a very strong brand name. The importance of this sector can be seen both from its contribution to the GDP and the fact that it accounts for 42% of industrial exports (only 22% three years ago).

Israel is unique in the region in that it enjoys free trade agreements with the world’s two largest trading markets, the European Union (EU) and the United States.

The labour force stands at 2.02 million, with women comprising 42% of employed people. Some 29% of the adult population have received post secondary education and 19% have academic qualifications. Israel boasts the highest number of scientists and engineers per head of population of anywhere in the world (140:10,000).

About 26% of the population work in technical professions, 5% in administration and management, 13% in the service sector, 27% in production, 4% in agriculture and 25% in other areas. Of the total, approximately 29% are employed in the public sector. Unemployment is currently 9.5% and is anticipated to rise to over 10% as world trade in general and the USA in particular continues in slowdown mode.

Under the Bank of Israel’s strict exchange rate policy, inflation is now at Western European levels. The target for the period 2002 – 2005 has been set at 1.5 – 3.5%. The Bank of Israel interest rate is presently 3.8%, the lowest recorded figure.

The Israeli Government encourages domestic and overseas investment and offers generous grants and loans in support of businesses. In addition, a wide range of fiscal and other incentives, including tax advantages, depreciation allowances and personal reliefs, are available to investing companies and their staff. In particular, the Israeli Government seeks to attract investment in high technology industries, providing one of the highest investment rates in R&D, per capita, in the world.

Despite current difficulties future prospects remain good. With past economic development, coupled with the possible effects of a renewed Middle East Peace Process, Israel remains an attractive export and investment destination for UK companies. Two way trade in 2000 reached a record high of £2,580 million, with UK exports of £1,519 million and despite the difficult situation, trade for 2001 was in excess of £2.3 billion.

Trade Statistics

Imports by principal countries of origin:

Value: Million US$ 1997 1998 1999 2000
World 29,019 27,470 31,090 36,801
USA 5,445 5,386 6,317 6,646
Belgium 3,619 2,872 3,528 3,548
Germany 2,728 2,418 2,524 2,673
United Kingdom 2,425 2,062 2,334 2,715
Italy 2,001 1,828 1,657 1,721
Switzerland 1,599 1,500 1,730 1,918
Netherlands 1.095 1,142 1,194 1,437
France 1,100 1,126 1,221 1,158
Japan 1,034 976 1,097 1,187
China 898

 

Exports by principal countries of destination:

Value: Million US$ 1997 1998 1999 2000
World 22,477 23,303 25,793 31,900
USA 7,213 8,254 9,162 11,734
United Kingdom 1,402 1,323 1,427 1,358
Netherlands 981 1,116 976 899
Germany 977 1,111 1,166 1,521
Belgium 1,116 1,103 1,382 1,873
Hong Kong 1,183 798 1,052 1,384
Japan 1,029 755 839 839
Italy 629 737 721 804
France 616 667 685 748
Malaysia 732
India 365 335 536 557

Source: IMF Direction of Trade DTI/ES Statistics

 

Top Ten UK Exports to Israel – 2001:

£million
Total UK exports 1,366
1. Non-metallic mineral manufactures 427
2. Electrical machinery and appliances 139
3. Office machines and ADP machines 102
4. Medicinal and pharmaceutical products 59
5. Other transport equipment 53
6. Telecommunications and sound recording and reproducing apparatus 49
7. Power Generating machinery and equipment 48
8. Road Vehicles 43
9. General Industrial Machinary and Equipment, nes and machine parts nes 41
10. Miscellaneous manufactured article nes 39

 

Top Ten UK Imports from Israel – 2001:

£million
Total UK imports 975
1. Telecommunications and sound recording equipment 143
2. Non-metallic mineral manufactures 140
3. Miscellaneous manufactured articles nes 88
4. Vegetables and Fruit 75
5. Articles of apparel and clothing accessories 63
6. Electrical machinery, apparatus and appliances 48
7. Professional, scientific and control instruments 45
8. Textile Yarn, Fabrics, Made-up Articles 43
9. Power Generating machinery and equipment 42
10. Office Machines & ADP equipment 38

Israel’s economy is multifaceted and highly industrialised. For the past six years, Israel’s economic growth has averaged 6% per annum, exceeding the average of the OECD countries. Its high GNP of $17,000 per capita places it firmly in the league of league of West European economies and exceeds that of some European Union Member States.

Internet / Email

Internet and e-mail are widely used. All major international Internet Service Providers can be accessed from Israel. Israeli businesses and individuals have been at the forefront of using this medium for communications. Many Internet sites accommodate English as well as Hebrew.

Telephone

From the UK the international dialling code for Israel is 00 972.

Area codes for major cities are:

Jerusalem 2
Tel Aviv – Jaffa 3
Haifa 4
Tiberius 6
Ashkelon 7
Rehovot 8
Netanya 9

To telephone the UK directly use the international prefix 00 44 and omit the “0” from the local area code.

Mobile telephones

Israelis are frequent users of mobile telephones, with up to 37% of Israelis owning their own. There are currently three mobile telephone networks in operation and a fourth is planned. Coverage is generally good.

Mobile telephones can be hired very easily once in Israel, at a reasonable price. Hire agencies are represented in the airport arrival hall at Ben Gurion or via the concierge at major hotels in the large cities and in many shopping areas.

Courier services

All major courier services will deliver to Israel, and many UK Couriers have branches in Israel.

Local representation / agents and distributors agency legislation

Israel, like other world markets, requires appropriate products and services, perseverance and personal contact. You cannot sell to Israel just by letter or mailshot. In most cases, the effective way of doing business is through an agent.

The appointment, authorisation, obligations and duties of agents and the legislation concerning the termination of an agreement are prescribed by the Deregulation Law, 1965. Among provisions of this legislation are clauses preventing life-long agreements. An English translation of this is available from Trade Partners UK’s Israel Unit.

Geographically the market is small. One agent or distributor should be able to cover the whole market, with the exception of the West Bank and Gaza where you would require a separate agent because of the differences in agency law and practices.

Advice on appointing an agent can be obtained from Trade Partners UK’s Commercial Section of the British Embassy Tel Aviv. Advice may also be obtained from the nearest Business Link International Trade Team in England or equivalent organisations in Wales, Scotland or Northern Ireland.

State trading organisations / privitisation role and contacts / trade promotion organisations

There is now wider support for privatisation in Israel, and it is no longer such a contentious issue, but is regarded as powerful economic stimulus.

In 1993, there was a total of 170 State-owned companies, of which 40 had been selected for privatisation.

State-owned companies are divided into three groups:

  • Government companies, excluding state banks, are those with Government ownership of more than 50% of the voting shares
  • mixed companies, in which the government owns less than 50% of the voting shares
  • state banks.

Privatisation of all state-owned enterprises, other than banks, is administered by the Government Companies Authority.

Government Companies Authority
3 Kaplan Street
Kiryat Ben Gurion
JERUSALEM 91001
Israel

Tel: +972 2 5317197/7498
Fax: +972 2 5617028

Of the 111 government companies, enterprises slated for privatisation including banks, cover a variety of sectors. Privatisations have been realised both through direct sales to investor groups and public equity offerings. The public equity offerings have been placed on the Tel Aviv Stock Exchange (TASE).

The first phase of privatisation in 1997 resulted in government shares being sold in:

  • Israel Chemicals Ltd
  • Bezek
  • National Oil Company
  • Yozma Venture Capital Company
  • School of Tourism

In addition, shares and options have been sold in four of the major banks:

  • Bank Leumi
  • Israel Discount Bank
  • Bank Hapoalim
  • United Mizrahi Bank

The next phase of privatisation will include: Zim Israel Navigation Company; Afridar; the District Development Council of Lod and Ramle; the Israel Foreign Trade Risks Insurance Corporation; the Industrial Development Bank of Israel; Tadmor; and the Union Bank of Israel, with further sales of shares and options in the United Mizrahi Bank, Israel Discount Bank, Bank Leumi; and Bezek.

Trade treaties

Israel’s Free Trade Agreements with the European Union date from 1975. Under the terms of the 1989 agreement, the Israeli Government ran an extensive programme of trade liberalisation aimed specifically at removing non-Customs restrictions applying to imports. The result of this is that most customs tariffs are reduced to zero.

The treaty was completely modernised and re-negotiated in 1995 and has been ratified by Parliament in the UK but this process has not yet been completed throughout the remainder of EU Member States. The trade elements of the new treaty came into force in 1996.

Israel also has Free Trade Agreements with the USA the former European Free Trade Association (EFTA) States and Canada and is currently negotiating treaties with North American Free Trade Association (NAFTA) and Mexico.

Israel and Great Britain also have a treaty preventing double taxation.

Israel as a member of the EU 5th Framework Programme

The European Union and Israel have signed a scientific and technical co-operation agreement that associates Israel with all the non-nuclear activities of the Fifth Framework Programme and, in return, gives European researchers access to Israeli research programmes in similar fields.

Under the terms of the agreement, Israel becomes an Associated State therefore project participants can receive funding from the European Union and operate under the same conditions as partners from within the European Union.

Britain-Israel Industrial R&D Fund (BRITECH)

Owing to its high GDP, Israel is ineligible for support from the British Government by way of overseas aid. However, the British Government regards Israel as a country with significant trade potential. As a result, the British and Israeli Governments have signed an Agreement to set up a £15.5m British-Israel industry R&D Fund. This is used to promote and encourage joint industrial R&D collaboration between firms in the two countries. The Fund is known as BRITECH.

Standards and technical regulations

Mandatory Israeli standards exist for a wide range of goods. The statutory body, the National Centre Quality – Standards Institute of Israel (SII) administers these standards. Where differences between European or international standards exist, UK exporters may obtain English translations via the British Standards Institution.

Labelling and packaging regulations

Israel has strict marking, labelling and packaging requirements and the complete list of items subject to these regulations is available in Hebrew only. Here are the rules you must follow:

  1. Goods and packages should be marked directly either by printing, engraving, stamping or any other means. On a multi-layered package, the external layer should be marked.
  2. It is prohibited to import goods bearing any name or trade mark of a manufacturer, dealer, or trader in Israel, unless the name is accompanied by an indication of the country in which the goods were made or produced.
  3. Imports into Israel must be accompanied by an indication of the country of origin, the maker’s name and address, the importer’s name and address, the content, and the weight and the volume in metric units.
  4. While Hebrew must be used in all instances, labels in English may be added provided that the printed letters are not larger than those in Hebrew.

 

Patents and trademarks

The Patents, Designs and Trade Marks Office is under the auspices of the Ministry of Justice, administers Intellectual Property Rights (IPRs) in Israel.

Patents

Israel is a member of the Paris Convention for the Protection of Industrial Property and other treaties protecting patents and other intellectual property. Patents should be filed with the Israeli Patent Office. It normally takes two to three years to obtain patents in Israel, but once granted, they will last for periods of up to 20 years from the date of filing.

Trade marks

Trade marks and goodwill are protected under the Trade Mark Ordinances of 1938, as amended in 1972. Trade mark registrations are valid for seven years after the initial filing date and may be renewed for 14-year periods. Infringement of copyright is a criminal offence.

Patterns and Designs

Original patterns and designs may be protected from five to fifteen years. Patterns and designs have to be new and original, unsold and unpublished in Israel and not exhibited before an application for registration.

Copyright

Israel Copyright Law is based on the UK Copyright Act 1911, as modified by the Copyright Ordinance 1924. The law was further modified in 1988 to protect computer software.

Both the UK and Israel are party to international conventions in the field of copyright and neighbouring rights which entitle works of British origin to protection in Israel in accordance with her national law.

Advice from local lawyers is strongly recommended, as piracy of sound recordings is high due to a weak law.

Trade secrets

There is no formal protection under Israeli law. However, they are classified as privileged information under the Evidence and Civil Procedure Law.

Intellectual property rights

On intellectual property rights, Israel is in the process of amending its laws to comply with its Trade Related Intellectual Property Rights (TRIPs) obligations.

Exchange controls

The latest available information about import duties, import control regulations, taxes, and other legislation in Israel affecting British exports, may be obtained from Trade Partners UK’s Israel Unit.