Trade Promotion and Advertising
Aggressive product promotion and advertising are effective tools in Israel, especially for consumer goods, where brand image is important and U.S. products face fierce competition from both local and European sellers. There are several effective means of advertisement through social media, commercial television, and radio. Channels 12, 13 and 14 are three commercial Israeli TV stations broadcasting nationwide and are permitted by law to carry private TV commercials, while state-owned KAN 11 carries sponsored advertising by public corporations. Some Israeli and internationally broadcast cable stations also carry advertisements. The state-owned Koll Israel (the Voice of Israel) radio station broadcasts commercial ads via two of its channels. In addition, 13 privately owned and authorized regional radio station operators accept commercial ads. Digital printing and commercial graphics are widely used in Israel, including billboards that cover entire building facades.
Local trade shows showcase the local industry and attract visitors from foreign governments and industries. Many business events, conventions, seminars, trade shows and private promotional events take place throughout the year. Here are links to some of the main conventions and event organizers:
Israel is a highly competitive market and price is a key factor driving Israeli corporate and consumer purchasing decisions. Presenting U.S. products as high quality at fair market prices is a good long-term sales strategy. Distributors prefer exclusivity and annual sales targets should be incorporated into representation contracts.
Israel’s VAT is 17% and charged on almost all services and products sold in Israel (except fresh fruits and vegetables). The VAT on imports is levied on the CIF (Cost, Insurance and Freight) landed cost plus purchase tax. VAT is recovered by the importer upon resale of the goods and is ultimately paid by the consumer.
Israel also levies purchase taxes on many consumer goods. The Government of Israel has reduced or eliminated the purchase tax on more than six hundred items since 2000, including televisions, washing machines, electrical appliances, and cosmetics. The purchase tax on standard vehicles with combustion engines is 83%, hybrids 45%, and electric vehicles 20% (35% starting January 2024).
Sales Service / Customer Service
The Ministry of Economy requires that all businesses provide adequate after-sales service and customer support. Regulations oblige local distributors to provide customers with full technical support for a period of up to ten years. To increase competitiveness in Israel, U.S. businesses should include a clause related to after-sales service and client support in their contracts with local representatives. U.S. firms should ensure that their local representatives receive adequate and ongoing customer service training and technical support. The time between a product failure and the time to repair it is one of the main issues affecting purchasing decisions by Israeli companies and government-owned entities. Providing reliable, long-term, after-sales service is the key to successful sales of most products and services.
Local Professional Services
Israel has a highly developed professional services market. A wide variety of service providers are available to support U.S. companies doing business in Israel, from the largest global firms to small local companies. Additional information is available upon request. Please contact Karen Kelich at email@example.com.
Principal Business Associations
- Manufacturers Association of Israel (MAI): Representative body of all industrial sectors in Israel: private, public, kibbutz and government industries. It consists of more than 2,000 organizations and industrial factories that are responsible for more than 95% of the industrial production in Israel.
- Israel Export and International Cooperation Institute (IEICI): Promotes exports of Israeli goods and services, fosters international cooperation and strategic alliances.
- Israel Advanced Technology Industries (IATI): IATI is Israel’s umbrella organization of the high-tech, life science and other advanced technology industries.
Limitations on Selling U.S. Products and Services
The Free Trade Agreement (FTA) between Israel and the U.S. contributes to the free flow of goods and services, and consequently there are no major limitations on selling U.S. products and services in the country. In some cases, however, nontariff barriers and technical barriers to trade arise from local regulations or a lack of transparency on specific public tenders. Please see the chapter on Customs, Regulations and Standards for additional information. U.S. companies are also advised to contact the U.S. Commercial Service should they encounter any perceived limitations.