Israel has the second-largest number of startup companies in the world
Capital city: Jerusalem
Currency: New shekel (₪) (ILS)
Language: Hebrew and Arabic
GDP: USD$316 billion
GDP per capita: USD$36,071
Israel, officially the State of Israel, is a Middle Eastern country bordering with Lebanon, Syria, Jordan, Palestine, and Egypt. Israel is the world’s only Jewish-majority state, with 74.8% of the population being Jewish (and 20.8% Arabs).
Since the existence of the earliest Jewish diaspora, many Jews have aspired to return to ‘Zion’ and the ‘Land of Israel’. After the Jews were expelled from Spain in 1492, some communities settled in Palestine. During the 16th century, Jewish communities struck roots in the Four Holy Cities—Jerusalem, Tiberias, Hebron, and Safed. In 1881, the first wave of modern Jewish migration to Ottoman-ruled Palestine began (as the Jews fled pogroms in Eastern Europe).
In 1947, the United Nations adopted a Partition Plan for Palestine recommending the creation of independent Arab and Jewish states and an internationalised Jerusalem. The plan was accepted by the Jewish Agency for Palestine and rejected by Arab leaders. On 14 May 1948, David Ben-Gurion, the head of the Jewish Agency, declared the establishment of a Jewish state in Eretz-Israel (to be known as the State of Israel). The following day, the Egyptian, Syrian, Transjordan and Iraq armies invaded Palestine, launching the 1948 Arab–Israeli War.
Over the years Arab/Israel relations deteriorated to the point of actual battles taking place between Israeli and Arab forces. This came to a head in May 1967, when Egypt massed its army near the border with Israel, expelled UN peacekeepers, and blocked Israel’s access to the Red Sea. On 5 June, Israel launched a pre-emptive strike against Egypt. In a Six-Day War which followed, Israel defeated Jordan and captured the West Bank, defeated Egypt and captured the Gaza Strip and Sinai Peninsula, and defeated Syria and captured the Golan Heights.
Israel’s quality university education and the establishment of a highly motivated and educated populace is largely responsible for spurring the country’s high technology boom and rapid economic development. It has the second-largest number of startup companies in the world after the United States and the third-largest number of NASDAQ-listed companies after the U.S. and China.
Israel is home to more than 250 multinational R&D centres, including Google, Facebook, Apple, Microsoft and Intel. The ministry said most of them list their IP in countries other than Israel, including in Ireland, the Cayman Islands, the Channel Islands and the Virgin Islands to avoid paying taxes.
Although Israel has a standard company tax rate of 25%, from 2017 medium and large technology companies will pay sharply lower taxes. Tech companies with annual revenue higher than $2.6 billion will only pay 6% (and 4% for the distribution of dividends).
"You’d be stupid not to try to cut your tax bill and those that don’t are stupid in business"
- Bono: U2