Current business situation
Driven by deliberate government policy, Israel’s innovation eco-system is one of the most developed in the world, shaped by a sophisticated system of major global investors, start-ups and universities engaged in proactive commercialisation of research. The Compass Global Startup Ecosystem, which ranks startup ecosystems around the world, ranked Tel Aviv in 2015 as the best startup centre outside the United States (US).
There are more than 350 multinational R&D centres in Israel, established by global companies such as Alcatel-Lucent, Apple, Applied Materials, eBay, Facebook, GE, General Motors, IBM, Intel, Microsoft, PayPal, Philips, Salesforce, Samsung, Sears, SingTel and Google. Apple opened its first R&D outside the US in Israel.
The Israel Venture Capital Association reports that in 2015, venture capital funds in Israel raised US$4.43 billion in 708 deals, with Israel raising more venture capital per capita than any other country. According to IVC Research Centre in Tel Aviv, the amount of raised venture capital funds in all of 2016 is expected to hit $US6 billion.
All of this makes Israel a natural destination for Australian innovation entrepreneurs, corporates and researchers interested in collaborating with the local innovation eco-system. In 2016, an Australian Landing Pad was opened in Tel Aviv to assist Australian startup companies interested in going global or seeking strategic partners and collaboration.
Israel is made up of a large variety of ethnic and religious groups (large Jewish majority with significant Muslim/Christian minorities), and as such, is a multi-cultural society with a wide range of behaviours, ranging from Western customs to Middle Eastern customs.
The official languages are Hebrew and Arabic, however most Israelis do speak English. Israeli business culture can be characterised as Mediterranean and sophisticated. The majority of local business people are quite knowledgeable in regard to international business trends, technologies and practices.
People usually refer to each other by their first name without the use of formal titles. Israeli business people tend to be less formal than their European foreign counterparts and in most cases, the dress code is quite informal. Usually, there is no clear distinction between social and business interactions.
The pace of business is usually faster than Australia and people expect to receive responses quickly. Like Australia, Israel is an egalitarian society where people speak their mind and mean what they say.
Israelis are usually quite 'to the point' and the negotiation style can be considered blunt and direct and they will usually tell you where you stand. However, the local business culture tends to be quite flexible, resilient, and creative and can be friendly and warm towards foreign counterparts that come to visit the country.
Kosher is the Hebrew term meaning fit for consumption or what is ritually correct. Based on Old Testament passages, the kosher regime dictates a variety of dietary rules that are observed by some Jews, mostly based on a separation of diary and meat/poultry based products. Certain seafood products (such as shrimp) are considered non-kosher. There are different levels of kosher observance and many non-religious Jews in Israel do not observe the kosher tradition.
Restaurants in Israel may be kosher or non-kosher, depending on the clientele. It is estimated that about 60 per cent of Israelis will respect kosher rules to some degree. When interacting with religious Jews, sensitivity regarding kosher food should be displayed (e.g. non-kosher food gifts for religious Jews would not be proper).
Setting up in Market
Setting up in market is comparable to most advanced economies and can range from a local distributor to a fully owned subsidiary, depending on particular needs. Regardless of the nature of local representation required, a local commercial lawyer should always be consulted first.
Banking and finance
The banking system in Israel is sophisticated and comparable to any Western nation. Opening hours change from bank to bank.
The three largest banks in Israel are:
- Bank Hapoalim
- Leumi Bank
- Israel Discount Bank.
ATM machines are readily available in most areas and local currency can also be obtained upon arrival at the airport.
There are currently no Australian banks officially represented in the market.
Links and resources
Government, business and trade
Australia-Israel Chamber of Commerce
The Federation of Israeli Chambers of Commerce
Israeli Customs and VAT Department
Israel Ministry of Economy
Israel Ministry of Foreign Affairs
Israel Venture Capital Association
Ministry of Finance
Standards Institution of Israel
News and media
The Jerusalem Post
The Times of Israel
Please note: This list of websites and resources is not definitive. Inclusion in this list does not imply endorsement by Austrade. The information provided is a guide only. The content is for information and carries no warranty; as such, the addressee must exercise their own discretion in its use. Australia’s anti-bribery laws apply overseas and Austrade will not provide business related services to any party who breaches the law and will report credible evidence of any breach. For further information, please see foreign bribery information and awareness pack.