Israel is a highly-developed and westernised market that has a growing trade relationship with the UK – Israel is now the UK’s fourth largest market across the Middle East and Africa, with exports worth £1.3 billion, while bilateral trade regularly tops £3 billion year-on-year.
The region is not without it’s problems though, and the Foreign Office advises against travel to certain areas – for the latest information, check out the latest travel advice at GOV.UK.
For everything else you need to know about exporting to Israel, read on…
What are the pros and cons of exporting to Israel?
Although Israel sits in a volatile part of the world, there are actually no major challenges to any British companies looking to do business out there, and UK operations as prominent as Barclays, Rolls Royce and Unilever all have a presence there.
The strengths of the market in Israel include:
- growing economy
- low inflation and unemployment
- Shekel is a freely convertible currency
- reduced government involvement in business
- strong technological knowledge and entrepreneurship
- top market for a number of approved patents per capita
- high density of start-up companies
- major technology companies, such as Google, Microsoft and Motorola, have their Research and Development (R&D) centres in Israel
And the benefits of doing business out there are:
- quick adoption of new technologies
- open to new ideas
- English widely spoken and accepted as business language
- Israeli business community familiar with UK business practice
- free trade agreement between the EU and Israel
- similar commercial legal systems to UK
- only 2 hour time difference
- regular flights between UK and Israel.
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How does tax work in Israel?
The main tax rates in Israel are:
- VAT – Charged at a rate of 18%, VAT in Israel is based upon the value of duty paid plus any other taxes and charges that are applied to imports
- Corporation tax – charged at 25%
- Income tax – ranges from 10% to 50%, depending upon income.
There is no inheritance tax and no gift tax in Israel.
How will I be affected by customs in Israel?
When importing goods to Israel, additional fees will be charged for services rendered in national ports.
It’s also worth noting that all imports must be labelled in Hebrew, and any supplementary English labels cannot have a type size that’s bigger than the Hebrew lettering. These labels must also specifically reference:
- the country of origin
- the producer’s name and address
- the name and address of the Israeli importer
- the contents of the package/crate
- the weight or volume in metric units
Israel has a free trade agreement with the EU, and while this has led to a gradual reduction in the level import duties levied on UK products, any eligible products must meet certain ‘rules of origin’ – for more on these rules, check out Rules of origin in free trade agreements.
