U.S. Is Top Foreign Investor in Israel, Trailed by Cayman Islands

Foreign direct investment in Israel rose 14.5% to $74.4 billion in 2012; Israeli investments abroad were up 4.3% to total $73.9 billion.

Bloomberg / Haaretz Archive

The United States was the biggest foreign investor in Israel as of the end of 2012, with the Cayman Islands - a global tax shelter that serve as corporate headquarters for many companies - No. 2 on the list, figures released by the Central Bureau of Statistics last week show.

American investors accounted $19.7 billion of the $74.4 billion in foreign direct investment, or 26.5% of the total. The Cayman Islands accounted for 11.6%, or almost $9 billion of FDI, which includes investment in factories and business as against investments in stocks and bonds.

Israel’s total stock of FDI rose 14.5% from the end of 2012 and was up 23.5% from the end 2011, the CBS said. There were no equivalent figures for 2013 or 2014, but in 2013 foreigners made $12 billion in new direct investments in Israel.

Other big foreign investors in Israel included Canada, with over $4 billion in investments at the end of 2012, followed by the Netherlands, with slightly less than $4 billion. North America stood out with 34% of the investments, compared with only 17% for Europe and 13% from South and Central America.

Israelis held $73.9 billion in direct investments overseas at the end of 2012, up 4.3% from a year earlier and 6.8% more than at the end of 2010. Israeli FDI went first and foremost to the Netherlands, which accounted for just over a third of the total.

The United States followed with a 23% share, Canada drew 5% and Singapore, 3.7%. This was basically the same list for financial investments, except that the Isle of Jersey, another tax haven off the coast of Britain, made the top four.

Of the total FDI in Israel at the end of 2012, 25% was in the commercial and service sector, 34.6% in industry, 17% in computer, electronics and optics industries, 16% in research and development and 15% in communications and information services.

Almost $42 billion of Israeli direct investments overseas, some 56.7% was in industry and 19.2% in commerce and services. The biggest industries were oil, chemicals and pharmaceuticals accounting for 46.2% of the total and 15.2% in the financial industry.