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Israel

Benny Axt Kumar Arunachala Story Tweedie Yates Wei-Wen Chen Sanchita Dhara

Political Risk - Overview


Persistent threat of violence Spillover from the Arab Spring Current social unrest (window) (Political Risk Services)

Political Risk - Moderate


Palestinian statehood Constant conflict with Arab neighbors Ethnic and religious differences Potential for government change (Grant)

Trade Climate Risk - Overview


Qualifying industrial zones Current import/export scenarios Anti-corruption measures

Trade Climate Risk - Moderate


Tax rules Free trade agreements Free trade zones

Foreign Investment Climate


+ Open to privatization (Country Conditions 1) Same tax rates for foreigners as for domestic industry, which depend on priority versus center zones Government incentives for foreign investment (training programs and grants for R &D) (Investment promotion) Member of MIGA (Multilateral Investment Guarantee Agency) (Country Conditions 1) Property rights enforced Monopoly protection (Country Conditions 3-4) Total GDP is rising (Market Data 1) Lack of transparency in procurement of government owned assets Intellectual property rights not enforced strongly. Must qualify for incentives through thorough government cost/benefit and performance requirement analysis (Country Conditions 2-4) July 1 end of tax exemption for foreigners buying government bonds (Country Forecasts 13)

Banks, Stock Markets & Exchange Rate = Minimal Risk


Current industrial interest rate is 3.25% (Country Forecasts 9) --compare to USA at .25% Tel-Aviv stock exchange added 6th foreign bank member in August 2011 (Scott & Shillington 1) Stock market and banking trends follows USA and Europe because of close ties Banks are currently stable Shekel is 3.5580 to 1 USD currently (Bank of Israel), the average exchange rate (to USD) over the previous five years is 3.98 (The Bank of Israel 2) Housing prices have gone up by 15% in last year (Country Report 10)

Local Developments - Overview Government reaction to social instability Major imports of 2010 Offshore natural gas and royalty scheme Upcoming election

Local Developments Risk - Moderate


Attack on Israeli gas pipeline High cost of living Income of younger generation Hot money and French Jews

Recent Business News


Market predictions Risks to predictions Present scenario More info to be added

Final Recommendations
SWOT Analysis
Strengths -Sound infrastructure -Transparent legislation -Sophisticated banking Opportunities Weaknesses -Political Instability -Social instability

Red Light

Threats

-Reduction in tax -Strike and rates political action -Qualified Industrial Zone agreements

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