Generalizes on the best strategy to enter the market, e.g., visiting the country; importance of relationships to finding a good partner; use of agents.
Last Published: 12/3/2019
Distribution methods vary by type of product.
  • Commissioned Agents: used mainly for industrial equipment, raw materials and commodities.
  • Non-Stocking Agents: used mainly by manufacturers.
  • Stocking Agents: used mainly for high volume items.
  • Importers/Distributors: used often for consumer goods.
  • Franchising: since its introduction to Israel in the mid-1980s, franchises have increased in popularity. ACE Hardware, Office Depot, Re/MAX, McDonalds, Pizza Hut, Toys-R-US, UPS, and FedEx all operate in Israel.
  • Direct marketing is common. Direct marketing is common though an “opt-in” spam law was introduced to Israel in late 2008. Companies can only send individuals spam if the individual agrees in advance. Political and charity mailings are exempt.
  • Mobile phone marketing through messaging is common.
  • Internet use in Israel is widespread and represents a good marketing avenue.
  • Door-to-door salesmanship is uncommon in Israel and is considered a nuisance.
  • Cable and satellite TV offer shopping channels.
The government of Israel encourages both joint ventures and licensing.
  • Joint ventures are the most popular method of cooperation for Israeli firms, especially in technology-related industries.
  • Israeli businesses prefer obtaining five-year licensing agreements with automatically renewable clauses that extend the agreement for another five years.
  • A Commercial Agents Law became effective in 2012. The law specifies advance notice of termination of a relationship related to the duration of the supplier/agent contract and monetary compensation of the agent for the loss of potential profits.
  • Manufacturing under licensing agreements is common in Israel. Israeli businesses prefer licensing agreements in which the licensor takes equity with the licensee.
  • The norm for royalties is 4-5% of turnover. Higher rates are common for luxury articles, authors’ fees, and specialized machinery.
  • A 10-15% withholding tax on royalties and fees is often deducted at the source.
  • Licensees may repatriate royalties through an authorized bank and are entitled to claim an income tax deduction on royalties and fee payments.
  • U.S. companies should seek advice from a respected law firm and accounting firm when figuring tax liabilities.
The United States and Israel have signed a tax treaty to avoid double taxation. Tax treaty: https://www.irs.gov/pub/irs-trty/israel.pdf 

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.