150.jpg” alt=”" width=”150″ height=”150″ />With Israel’s booming economy, it makes good sense for some businesses to consider creating a market for their products and services in Israel. The US economy is expected to be stagnant at best for the foreseeable future. Entrepreneurs need to consider market factors to properly determine growth potential. While Americans and Europeans are tightening their belts, many Israelis are taking advantage of the strong shekel vs. the weaker dollar to import like never before.
With a GDP in 2010 of $225 billion, the Israeli economy is compact and agile. In spite of the most recent recession, the Israeli economy has already seen substantial consistent growth since January 2009, making it one of the fastest recovering developed countries in the world.
Roughly 40% of Israel’s 7.5 million people are concentrated in the greater Tel Aviv metropolitan area, Israel’s commercial and financial center. Another major population concentration is in the Haifa metropolitan area (15%), a major port city and center for the petrochemical and high tech industries. Almost all goods are imported through Israel’s two Mediterranean ports, Haifa in the north and Ashdod in the south, and through Ben Gurion International Airport. These ports offer good transportation links to the rest of the country. While most companies are headquartered in these areas, a growing number of firms maintain branches, showrooms, or service facilities in Jerusalem and Beer Sheva.
Consumer malls and shopping centers are popular in Israel. Many American specialty shops, chain stores, and franchises have outlets in the 200 malls and shopping centers now there. Key to success is offering an increasing variety of new products and services to the Israeli consumer.
For first-time exporters to the market, it’s important to note that distinct cultural differences in Israel may in some cases dictate changes in selling, advertising, and marketing. Although many strategies used by US firms can be equally effective in Israel, U.S. companies should not assume that selling in Israel is the same as selling in the domestic U.S. market. Companies should carefully research promotional activities prior to their implementation in Israel.
Partnering with a local representative who has good industry contacts, proven reliability, technical skills and after-sales service capabilities is important for selling and maintaining a continued presence in Israel.
U.S. businesses interested in establishing an office in Israel are required to register with the Registrar of Companies at the Ministry of Justice. The business must file a copy of documents certifying that it is incorporated in the United States and other information. If these documents are in English, they must be accompanied by a Hebrew translation. There is no requirement for the company managers or directors to be Israeli citizens or residents. However, U.S. representatives assigned to manage the Israel office must first obtain work permits from the Employment Service Division of the Ministry of Industry, Trade & Labor. Authorization from the Ministry and, if applicable, the Investment Center, is necessary before the Ministry of Interior can issue a visa. U.S. businesses establishing an office in Israel are advised to consult with a local accounting or law firm.
Doing business overseas is not for everyone. However, think about all options when charting a growth course for your business. In the Chicago area, the America – Israel Chamber of Commerce is a great place to start if you’re considering doing business with and in Israel.