Foreign Direct Investment in Israel: Developments and Trends in the Past Decade

Nonresidents’ direct investment in Israel has been growing over the past decade, largely due to net investment flow. New direct investments in equity exceeded earnings accrued for reinvestment during that period, but this trend turned around in 2023 as investment flow declined considerably as part of a global downward trend in direct investment. An international comparison of foreign direct investment (FDI) indicators over time, testing Israel against selected benchmark countries that resembled Israel in per-capita GDP, shows that Israel ranks high. This ranking recurs against an aggregate of OECD and other countries. These indicators point to the contribution of FDI to Israel’s economic growth and suggest the extent of attractiveness of the economy to foreign investors.