ANALYZING EASE OF DOING BUSINESS IN ISRAEL

INTRODUCTION

Israel, often referred to as the “Startup Nation,” earned international attention for its vibrant economy, innovative technology sector, and robust entrepreneurial spirit. The country has made significant strides in enhancing its business environment, as evidenced by its ranking in the World Bank’s Ease of Doing Business Index. In 2020, Israel ranked 35th out of 190 countries, reflecting its commitment to fostering a conducive atmosphere for both local and foreign businesses.

KEY FACTORS INFLUENCING EASE OF DOING BUSINESS

Starting a Business

Starting a business in Israel is relatively straightforward compared to many other countries. Entrepreneurs typically need to complete three main procedures to register a business. The average time required to start a business is approximately 11 days and the Israeli government has implemented online registration systems, which streamline the process and reduce bureaucracy.  

Obtaining Credit

Access to credit is crucial for business growth, and Israel has a well-developed financial sector that supports business. Bank in Israel has a robust banking system with numerous financial institutions providing loans and credit facilities. The country has established a comprehensive credit reporting system, which helps lenders assess the creditworthiness of borrowers. Israel ranks 60th globally for ease of obtaining credit, indicating a relatively favorable environment for securing financing.

Protecting Minority Investors

Israel is recognized for its strong framework that protects minority investors. Minority shareholders have rights that are well-defined, allowing them to participate in corporate decisions and protect their interests. Israel ranks 23 globally for protecting minority investors, reflecting its commitment to fostering investor confidence.

Registering Property

Registering property in Israel has seen significant improvements. The government has worked to simplify the property registration process, reducing the time and complexity involved. Israel climbed 41 places to rank 89th for ease of registering property, making it easier for businesses to secure real estate.

Paying Taxes

Israel’s tax system is designed to be straightforward, making compliance easier for businesses. The corporate tax rate stands at 23%, which is competitive compared to other developed nations. The tax filing process is relatively efficient, although businesses must navigate various tax regulations. Israel ranks 90th for ease of paying taxes, indicating room for improvement in this area.

BUSINESS ENVIRONMENT

Reducing Bureaucracy

The government has introduced digital platforms for business registration and permits, significantly reducing the time and effort required to comply with regulations. Initiatives such as one-stop shops for business services help streamline interactions between entrepreneurs and government agencies.

Improving Regulation

The Justice Ministry has focused on refining regulations to eliminate unnecessary burdens on businesses. The government actively seeks feedback from the business community to identify areas for improvement.

Encouraging Growth and Innovation

Israel has a thriving startup ecosystem, supported by government grants, incubators, and venture capital funding. The government provides tax incentives and grants to encourage research and development, fostering innovation across various sectors.

CONCLUSION

Israel’s remarkable progress in enhancing its business environment is a testament to its commitment to fostering innovation and entrepreneurship. The country’s protections, efficient processes for starting a business, and access to credit create a favorable landscape for both local and international investors. However, challenges such as obtaining building permits, trading across borders, and enforcing contracts remain areas for improvement. Continued government reforms and a focus on streamlining regulations will be essential for Israel to maintain its position as a leading destination for business and investment. As the nation continues to evolve, it is poised to further enhance its reputation as a global hub for innovation and entrepreneurship.