Israel Country Commercial Guide
Learn about the market conditions, opportunities, regulations, and business conditions in israel, prepared by at U.S. Embassies worldwide by Commerce Department, State Department and other U.S. agencies’ professionals
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Investment Climate Statement
Last published date:

The U.S. Department of State’s Investment Climate Statements help U.S. companies make informed business decisions by providing up-to-date information on the investment climates of more than 170 countries and economies. They are prepared by our embassies and consulates around the world and analyze each economy’s openness to foreign investment. Topics include:

•    Openness to, and Restrictions upon, Foreign Investment, 
•    Investment and Taxation Treaties,
•    Legal Regime,
•    Industrial Policies,
•    Protection of Property Rights,
•    Financial Sector,
•    State-owned Enterprises,
•    Corruption,
•    Labor Policies and Practices,
•    Political and Security Environment, and
•    U.S. International Development Finance Corporation (DFC) and Other Investment Insurance or Development Finance Programs

Each statement provides a starting point for U.S. firms and offers a point of contact at the relevant U.S. embassy or consulate abroad.

These reports are also a resource for foreign governments to create business environments that ensure fair treatment for the United States and our companies and investors. 

To access the full Investment Climate Statement, visit the U.S. Department of State Investment Climate Statements website.

Executive Summary - Israel

Israel has an entrepreneurial spirit and a creative, highly educated, skilled, and diverse workforce.  It is a leader in innovation in a variety of sectors, and many Israeli start-ups find good partners in U.S. companies.  Popularly known as “Start-Up Nation,” Israel invests heavily in education and scientific research.  U.S. firms account for nearly two-thirds of the more than 400 research and development (R&D) centers established by multinational companies in Israel.  Israel has 135 companies listed on the NASDAQ, the fourth most companies after the United States, Canada, and China.  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.  Private venture capital funds have flourished in Israel in recent years.

Israel suffered the worst terrorist attack in its history on October 7, 2023, when Hamas terrorists infiltrated Israel, killing over 1,200 people and taking more than 250 people hostage. The Hamas attack and subsequent rocket attacks from Hizballah along Israel’s northern border with Lebanon forced over 200,000 Israelis from their homes.

The wars in Gaza and Lebanon disrupted the previously vibrant $565 billion Israeli economy, and GDP growth for 2024 was only 1.0 percent (compared to pre-war estimates in the 4-5 percent range).  Increased war-related spending created significant budget deficits, triggering credit downgrades in 2024, though Israel’s debt remains investment grade.  Forecasts for 2025 GDP growth average about 3 percent. The high-tech sector is the primary growth engine of the Israeli economy, accounting for roughly 12 percent of the workforce, 20 percent of GDP, and 53 percent of exports.  Its resilience throughout the war remains a bright spot.

Since the signing of the U.S.-Israel Free Trade Agreement in 1985, the Israeli economy has undergone a dramatic transformation, moving from a protected, low-end manufacturing and agriculture-led economy to one that is diverse, open, and led by a cutting-edge high-tech sector.  The U.S.-Israeli bilateral economic and commercial relationship is strong, particularly in high-tech and R&D, anchored by two-way trade in goods and services that exceeded $50 billion in 2024.  

Total U.S. foreign direct investment (FDI) in Israel was $45.9 billion in 2023, according to the U.S. Department of Commerce Bureau of Economic Analysis. The Israeli government generally seeks to remove 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.  To increase competition and reduce costs, over the last several years the Israeli government has instituted a series of standards reforms, which favored products certified to European standards. In March 2025, the Israeli government announced its intention to expand the standards reform to include U.S.-certified products.

Though most tariffs were eliminated with the 1985 free trade agreement, Israel maintains some tariffs on certain U.S. goods, mainly food and agricultural products.  In April 2025, the Israeli government announced its intention to eliminate all tariffs on U.S. imports, but this action is still pending final Knesset approval as of August 2025.  

To access the ICS, visit the Israel Investment Climate Statement on the U.S. Department of State’s Investment Climate Statements website. 

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Global Business Navigator Chatbot Beta

Welcome to the Global Business Navigator, an artificial intelligence (AI) Chatbot from the International Trade Administration (ITA). This tool, currently in beta version testing, is designed to provide general information on the exporting process and the resources available to assist new and experienced U.S. exporters. The Chatbot, developed using Microsoft’s Azure AI services, is trained on ITA’s export-related content and aims to quickly get users the information they need. The Chatbot is intended to make the benefits of exporting more accessible by understanding non-expert language, idiomatic expressions, and foreign languages.

Limitations

As a beta product, the Chatbot is currently being tested and its responses may occasionally produce inaccurate or incomplete information. The Chatbot is trained to decline out of scope or inappropriate requests. The Chatbot’s knowledge is limited to the public information on the Export Solutions web pages of Trade.gov, which covers a wide range of topics on exporting. While it cannot provide responses specific to a company’s product or a specific foreign market, its reference pages will guide you to other relevant government resources and market research. Always double-check the Chatbot’s responses using the provided references or by visiting the Export Solutions web pages on Trade.gov. Do not use its responses as legal or professional advice. Inaccurate advice from the Chatbot would not be a defense to violating any export rules or regulations.

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The Chatbot does not collect information about users and does not use the contents of users’ chat history to learn new information. All feedback is anonymous. Please do not enter personally identifiable information (PII), sensitive, or proprietary information into the Chatbot. Your conversations will not be connected to other interactions or accounts with ITA. Conversations with the Chatbot may be reviewed to help ITA improve the tool and address harmful, illegal, or otherwise inappropriate questions.

Translation

The Chatbot supports a wide range of languages. Because the Chatbot is trained in English and responses are translated, you should verify the translation. For example, the Chatbot may have difficulty with acronyms, abbreviations, and nuances in a language other than English.

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