Israel To Encourage Foreign Investment With Tax Breaks

by Lorys Charalambous, Tax-News.com, Cyprus

17 March 2004

Israel is to consider radical tax breaks in a bid to lure foreign investment, particularly in the defense and hi-tech sector, the country’s trade and industry minister, Ehud Olmert, revealed on a governmental trip to London last week.

Olmert told the Times that Israel is planning to remove all “bureaucratic hurdles” for foreign investors and revealed that his government is looking to establish a central information point so that potential investors can gain all the information they require from one place.

“We are also considering dramatic changes to tax breaks for foreign investment,” he informed the UK daily. “There will be some preconditions - this will have to be above a certain threshold - but if those conditions are met there will be no taxes to pay.”

Given Israel’s security fears in recent decades, Olmert explained how the country’s defense industry has thrived, and noted that the sector is expected to form the basis of new investment in the coming years, especially given growing global tension.

The Israeli minister also divulged that he expects the European Union to become an increasingly important trading partner in the years ahead, and expressed a desire for closer links between the Israel and the EU. However, he suggested that the possibility of Israel’s entry into the EU remains a long way down the road.

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