The Israeli Marketplace: It's Not Just Stocked With Milk and Honey
May 01, 2008 - Frank Rosci, Jewish Exponent Feature  |
| Yair S. Shiran |
For most U.S. companies, big and small, doing business in Israel is a combination of inviting opportunity and engaging challenge, marked by cultural, institutional and administrative differences, that once understood and bridged can lead to fulfilling and prosperous partnerships.
With these distinctions in mind and to explore in particular the major legal refinements between business in the U.S. and Israel, as well as to present proven ways to work successfully within the framework of the Israeli business world, the America-Israel Chamber of Commerce (www. americaisraelchamber.com), Central Atlantic Region, recently co-sponsored with Gratz College a session on "Doing Business in Israel -- Legal Considerations & Incentives."
Hosted by Temple Adath Israel of the Main Line, Merion Station, the event, through the Sylvia and Stanley Leven Continuing Legal Education Program for Attorneys, earned participants three CLE credits toward the 12 needed annually by anyone who practices law in Pennsylvania.
"In 2006, AICC held a session on taxation of wealth in Israel, but this was the first session of its kind for us since we, at AICC, think it's important for practitioners and businesses to understand the legal aspects of doing business in Israel, and the legal characteristics that distinguish Israel as an international trade venue; and to educate practitioners and business representatives of the questions that may arise when involved in international treaties with Israel," stated Debbie Buchwald, AICC's executive director.
She said she was pleased with the way the what-you-need-to-know event played out. "I thought the program provided a good overview of the topic, was well-attended and served as a catalyst for additional topics on doing business in Israel, such as licensing Israeli technology and government incentives for developing Israeli technology."
The informative session featured presentations by attorney Ari Afilalo, professor, international trade & business transactions, Rutgers-Camden School of Law, who served as moderator; Rabbi Gary Charlestein, CEO, Premier Dental Products Co., in Plymouth Meeting, Pa., and an AICC board member; Eli Gabay, general counsel, Obey Your Body, a company that specializes in the distribution of Dead Sea cosmetic products; Yair S. Shiran, economic minister to North America, Government of Israel Economic Mission, New York; and attorneys Ephraim Schmeidler of Wolf Block/New York and Shaun Snitman, Wolf Block/Philadelphia.
Shiran, a negotiator of Israel's Free-Trade Agreements (FTA), spoke of the assistance available from his office. "We can play the role of facilitator for those who need it [when it comes to] the legal and business atmosphere in Israel, which is quite direct and honest, not aggressive and rude, as some may think."
Israel's international trade policy is structured at multilateral, bilateral and unilateral levels, he said, noting that Israel, a founding member of the World Trade Organization, and the U.S. have had an FTA since 1985.
"Government support programs in Israel for investments include competitive grants packages of up to 20 percent of the investment, a tax exemption on venture capital investments and a tax exemption on capital gains for foreigners until the end of 2008," Shiran said.
Common Law Tradition
Schmeidler and Snitman, each licensed to practice law in Israel and New York, offered practical tips and advice. "Israel has a very strong common law tradition rooted in U.K. law, so a sense of rule of law and precedents exists in Israel," said Schmeidler.
Snitman said the three common methods for American companies to establish a business presence in Israel are formation of an Israeli entity; registering a foreign company; and either acquiring or investing in an existing Israeli company. "But you have to be very careful of the third option since you can't be sure completely of the company's past," he warned.
In each instance, Snitman said, "every company in Israel is required by law to update itself with the registrar of companies, a tool that can be very useful when it comes to knowing with whom you're dealing."
In his experience, Charlestein observed, certainly there are regulatory hurdles that must be overcome in Israel, as in all countries, "but they are not as onerous as many obstacles we face in other markets."
He praised the fact, for example, that there aren't import duties on either the American or Israeli sides, a legal consideration that "makes sales transactions easier than in many other markets."
"There is a deep understanding on both sides of each other's conditions and cultures," remarked Charlestein, whose 95-year-old company is a fourth-generation manufacturer and "master distributor," he said, of dental and medical supplies worldwide.
"All in all, we find Israel an exciting and welcoming place to do business on both sides of the table, and a fertile field for new ideas and new technologies ripe for cooperation. Personally, dealing with Israel is the fulfillment of a core value for our family."
Meanwhile, Gabay advised that all U.S. residents involved in doing business with Israel retain an attorney who speaks English and Hebrew. "Also, Gov. Rendell is very supportive of U.S. companies doing business in Israel, so having a letter from Harrisburg, for example, can be very helpful when doing business there."
On a closing note, Shiran stressed that Israel is a country of only seven million people, "so the challenges of getting business and doing business are great."
