IsraelChapters
IIsrael has an exceptional innovation ecosystem and technology leadership. Often referred to as the “Startup Nation,” Israel has one of the highest concentrations of startups per capita globally, particularly strong in cybersecurity, artificial intelligence, software, medical devices, agri-tech, and climate technologies. Companies doing business in Israel gain early access to cutting-edge innovation and commercially viable R&D.
A key advantage is strong government support for innovation and foreign investment, led by the Israel Innovation Authority, which offers grants, R&D co-funding, and incentive programs that significantly reduce development risk for both local and international companies. This support is especially valuable for technology-driven and research-intensive businesses.
Israel also benefits from a highly skilled, entrepreneurial workforce. Engineers, scientists, and founders are globally oriented, English-speaking, and experienced in fast-paced problem solving. This talent base enables rapid product development and scalability, making Israel an ideal location for R&D centers and innovation hubs rather than low-cost manufacturing.
From a strategic perspective, Israel functions as a gateway to global markets. While its domestic market is small, Israeli companies are export-focused by necessity and maintain strong trade and business ties with the United States, Europe, and Asia. Many startups are built from day one with international customers, regulations, and scalability in mind.
The country also offers a mature venture capital and exit environment, with strong participation from international investors and frequent acquisitions or IPOs, particularly on US exchanges. Combined with robust legal protections for intellectual property and transparent commercial laws, Israel provides a secure environment for IP-driven businesses and cross-border partnerships.
Key indicators
- Area
- 21,937 km2
- Population
- 9,552,637 (2025 est.)
- Government type
- parliamentary democracy
- Languages
- Hebrew (official), Arabic (special status under Israeli law), English (most commonly used foreign language)
- GDP
- $610.75 billion (2025 est.)
- Growth rate
- 3.5-5%(2026 est.)
- HDI
- 19
- Capital
- Jerusalem
Macroeconomic indicators
The Israeli economy has been remarkably resilient to the shock of the 7 October terror attacks and subsequent war. This strength under exceptionally difficult circumstances stems from its sound fiscal position before the war, deft monetary management, a stable financial system and strong growth potential owing to high employment rates and a vibrant high-tech sector. Keeping the economy steady and securing solid growth requires curbing inflation and containing fiscal deficits while funding future spending needs. Economic performance would strongly benefit from reforms that address infrastructure gaps and improve educational outcomes and labour-market participation among ultra-orthodox and Arab Israelis. Removing barriers to foreign and domestic and foreign trade, by cutting red tape, easing border processes and lowering tariffs would strengthen productivity, increase incomes and durably lower consumer prices. Capitalising on an already strong artificial intelligence (AI) industry is essential, by maintaining a flexible regulatory approach and further nurturing links between higher-education institutions and AI firms. Reducing greenhouse gas (GHG) emissions further requires carbon-free power generation through higher carbon tax rates on natural gas and more energy-efficient buildings.
Source: OECD - Economic Forecast
IMF Statistics:
| Subject descriptor | 2023 | 2024 | 2025 | 2026 | 2027 |
|---|---|---|---|---|---|
|
All Items, Consumer price index (CPI), Period average, percent change Percent (Units) |
4.208 |
3.071 |
3.155 |
2.217 |
2.185 |
|
Current account balance (credit less debit), Percent of GDP Percent (Units) |
3.115 |
2.823 |
2.785 |
3.01 |
3.067 |
|
Current account balance (credit less debit), US dollar US dollar (Billions) |
15.993 |
15.308 |
17.009 |
20.061 |
21.377 |
|
Exports of goods and services, Volume, Free on board (FOB), Percent change Percent (Units) |
-1.106 |
-4.692 |
2.467 |
2.984 |
3.27 |
|
Gross domestic product (GDP), Constant prices, Percent change Percent (Units) |
2.063 |
0.954 |
2.495 |
3.926 |
3.281 |
|
Gross domestic product (GDP), Current prices, Per capita, US dollar US dollar (Units) |
52146.476 |
54294.192 |
60008.972 |
64275.33 |
66005.451 |
|
Gross domestic product (GDP), Current prices, US dollar US dollar (Billions) |
513.394 |
542.285 |
610.752 |
666.407 |
697.005 |
|
Imports of goods and services, Volume, Cost insurance freight (CIF), Percent change Percent (Units) |
-7.396 |
-0.7 |
6.19 |
2.907 |
3.9 |
|
Unemployment rate |
3.45 |
2.983 |
2.9 |
3.2 |
3.5 |
Estimates
Source: IMF Statistics - Israel
Relationships with Luxembourg
Existing conventions and agreements
Non double taxation agreement
In order to promote international economic and financial relations in the interest of the Grand Duchy of Luxembourg, the Luxembourg government negotiates bilateral agreements for the avoidance of double taxation and prevent fiscal evasion with respect to Taxes on Income and on fortune with third countries.
- Convention from 13.12.2004 (Memorial 2006, A, no. 81, p.1446)
- Effective as of 01.01.2004 (Memorial 2006, A, no. 81, p.1446)
Air Services agreement
- Agreement from 06.14.1994 (Memorial 1995, A, p. 1646)
- Effective as of 20.11.1995 (Memorial 1995, A, p. 2566)
Source:https://impotsdirects.public.lu/fr/conventions/luxembourg.html
Further information
Foreign Trade
The Statec Foreign Trade statistics provide information on the trade of goods - by product and by country. This information is collected respectively through the INTRASTAT declaration and on the basis of customs documents.
You can see the statistics on the website https://statistiques.public.lu/en.html
Contact points in Israel
Luxembourg is represented by Ambassade Royale des Pays-Bas à Tel Aviv
Honorary Consul
Honorary Consul with jurisdiction in Israel:
Mr Miron Chaim IZAKSON
Beit Asia 5ft floor
4 Weizmann St.
IL-65271 Tel-Aviv
Israel
Tel.: (+972) 3 68 55 092
E-Mail: telaviv@consul-hon.lu
Luxembourg Trade and Investment Office in Tel Aviv
Mr Itai HORSTOCK
Guinevere Ltd.
113 Hashmonaim Street
Tel Aviv 67133
Israel
Tel.: (+972) 3 6225 4454
Website: www.investinluxembourg.co.il
Source: Ministry of Foreign Affairs of Luxembourg
Country risk as defined by Office du Ducroire for Israel
Ducroire is the only credit insurer covering open account deals in over 200 countries. A rating on a scale from 1 to 7 shows the intensity of the political risk. Category 1 comprises countries with the lowest political risk and category 7 countries with the highest. Macroeconomics experts also assess the repayment climate for all buyers in a country.
Link: www.odl.lu
Other Useful Links:
- Invest in Israel
- Israeli Ministry of Economy and Industry
- Israel Export Institute
- Federation of Israeli Chambers of Commerce
- Startup Nation
- OECD – Israel Economic Surveys