Israel

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

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) .Political Risk .

Overview • Qualifying industrial zones • Current import/export scenarios • Anti-corruption measures .Trade Climate Risk .

Moderate • Tax rules • Free trade agreements • Free trade zones .Trade Climate Risk .

Foreign Investment Climate + •Open to privatization (Country Conditions 1) •Same tax rates for foreigners as for domestic industry. •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) - . 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.

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 3.98 (The Bank of Israel 2) • Housing prices have gone up by 15% in last year (Country Report 10) . the average exchange rate (to USD) over the previous five years is 3. Stock Markets & Exchange Rate = Minimal Risk • Current industrial interest rate is 3.Banks.5580 to 1 USD currently (Bank of Israel).

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

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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