Israel - Country Commercial Guide
Trade Financing
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Methods of Payments

Israeli businesspeople are generally reliable and pay on time. However, as there are always exceptions to the rule, common precautionary measures should be taken when doing business in Israel. The most common method of payment is by Letter of Credit (L/C). Collection without a L/C is not unusual, however. Cash against Documents (CAD) is the most preferred mechanism by many Israeli importers. Since there is no guarantee of payment, as there is in a L/C transaction, some exporters prefer to collect an advance payment or an irrevocable bank guarantee on a certain portion of the sale. This practice is appropriate and recommended when there is no past relationship and experience with the buyer. A combination of L/C and CAD issued for the same Bill of Lading is also accepted by most local banks. Payment schedules vary. The acceptable terms of payment range from EOM + 30 to EOM + 60 days. It is not unusual for payment to be made after a 90 (sometimes 120) day period. The local banking system provides sources of short and long-term credit and access to venture capital. Some importers have preferred to seek U.S. Export-Import (Ex-Im) Bank financing. Ex-Im Bank has most of the leading Israeli banks as correspondents and may supplement private sources of export financing with medium and long-term loans. For more information about the methods of payment or other trade finance options, please see the Trade Finance Guide available at:

Banking Systems

Israel has a modern and sophisticated banking system. There are five major domestic commercial banks in Israel, with a number of smaller banks, some of which are subsidiaries of the larger banks. The two largest banks, with similar asset size are Bank Hapoalim and Bank Leumi, followed by Israel Discount Bank, Mizrahi Tefahot Bank and First International Bank of Israel. There are currently five foreign banks with commercial activities in Israel: Citibank NA, HSBC Bank plc., Barclays Bank plc., BNP Paribas Israel and State Bank of India. In addition, there are several foreign banks with representation in Israel: Bank Julius Baer & Co., Bank Lombard Odier & Co., Banque Pictet & Cia SA, BNP Paribas Israel, CBH Compagnie Bancaire Helvetique S.A., Dreyfus Sons & Co., Hyposwiss Private Bank Geneve SA, JP Morgan Chase Bank N.A., Silicon Valley Bank, and Union Bancaire Privee. According to Bank of Israel’s annual survey, Israel’s banking system is stable and resilient with high liquidity levels. The banks accumulated profits from business activity and have adopted policies to attain capital levels that are appropriate to their risk profiles.

Foreign Exchange Controls

Israel abolished most of its foreign exchange controls in the 1990s. The last major restriction, on the amount Israeli institutional investors may invest overseas, was eliminated at the end of 2002. The main transactions which will no longer be restricted are:

Individual investments abroad: Individuals are permitted to invest abroad freely, including in land and real estate. Hitherto, such investments were allowed only in time-sharing projects. Bank accounts: Individuals and companies are permitted to manage bank accounts abroad, in either NIS or foreign currency. Hitherto, only exporters could do so. Unilateral transfers: All quantitative restrictions applicable to all types of unilateral transfers abroad, including support payments, gifts, and transfers abroad by a resident who has emigrated from Israel, have been abolished. Holding foreign currency in cash: The restriction on holding foreign currency in cash has been abolished, and payments in foreign currency are permitted in cash or by check, between Israeli residents as well as between residents and nonresidents. The restriction on taking NIS out of Israel and on receiving NIS from nonresidents including receipt of NIS as payment for exports has been removed. It should be noted, however, that as of January 2020, prohibits cash payments in Israel over certain amounts (up to NIS 6,000 between businesses, or up to NIS 15,000 – between private individuals). Presentation of documents: The requirement to present documents when carrying out a transaction with a nonresident in NIS or in foreign currency has been abolished. However, a report on the nature of such transactions will be required, in order to enable reliable and informed analyses of capital flows to be performed. Direct activities in foreign currency or with abroad: Such activities will be permitted not only via authorized institutions in Israel, i.e., authorized dealer banks, brokers, moneychangers, and credit-card companies, but directly with foreign financial intermediaries. This will increase competition in the financial sector and improve its efficiency.

U.S. Banks and Local Correspondent Banks

Most U.S. banks maintain correspondent relationships with Israel’s leading banks, including Bank Leumi, Bank Hapoalim, Israel Discount Bank, Mizrahi Bank and the First International Bank of Israel. Many Israeli banks have their own subsidiaries in major U.S. cities: Bank Hapoalim has branches in New York and Miami; Bank Leumi has a U.S.-based subsidiary, Leumi USA, with offices in New York, Chicago, California, and Florida; Israel Discount Bank has a subsidiary in New York; and Mizrahi-Tefahot has a branch in Los Angeles. Interested parties should contact their U.S. banker or the Israeli banks in the United States directly for more detailed information on their respective services.

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