Israel Culture of Business

By | July 24, 2022
Basic data
Capital Jerusalem
Population 9.45 million
Language Hebrew, Arabic
Religion Judaism (74%), Islam (21%)
State system parliamentary republic
Head of State Yitzchak Herzog
Head of government Naphtali Bennett
Currency name Israeli new shekel (NIS)
Travel
Time shift +1h
Economy 2021
Nominal GDP (billion USD) 419,673
Economic growth (%) 8.1
Inflation (%) 2.9
Unemployment (%) 4.6

Israel is a parliamentary democracy with strong powers of the Prime Minister. The government is appointed by the president and managed by the prime minister. The elected unicameral parliament (Knesset) has 120 members. The judicial system is 3-level and has formal independence, which is supervised by the Constitutional Court, which can express itself on important issues of the protection of constitutional rights and freedoms. The majority of the population (74%) subscribes to Judaism of various orientations and varying degrees of observance of religious rules. The second largest group are Muslims (21%), mainly Sunnis.

Israel is one of the most developed countries in the Middle East and is the only Western-style democracy in the region. For Israel, a country with a relatively small size of the economy and a limited domestic market, foreign trade is a decisive factor for the functioning and growth of the economy. A significant specific feature is that Israeli companies cannot export to a significant part of the countries of the region (the exception – even with major restrictions – are Egypt, Jordan and from 2020 the United Arab Emirates, Bahrain, Sudan and Morocco), as it does not have trade relations with most Middle Eastern countries State of Israel established diplomatic relations. Israeli exporters/importers are thus traditionally used to doing business with countries far beyond the horizon of the immediate geographical neighborhood (USA, Asia, EU). The trade balance from Israel’s point of view is a long-term deficit,

The United States of America is Israel’s most important trading partner after the European Union. They are also the main source of investment inflows to Israel. To fully understand the economic-strategic partnership between the two countries, it is important to understand the hard-to-quantify economic and ideological ties. The American Jewish community (almost comparable in number to the Jewish population in Israel) has a large share in both the success of Israeli exporters in the United States and Wall Street’s interest in Israeli technology firms.

Culture of business dealings

Subchapters:

  • Introduction
  • Addressing
  • Business Meeting
  • Communication
  • Recommendations
  • Public Holidays

Introduction

Israeli business etiquette is close to customs in Europe and the USA, but there are several local specifics that Czech entrepreneurs operating in the local territory should pay attention to. In general, this is mainly a more relaxed way of conducting business relations (more relaxed dress code, addressing by first name, less emphasis on punctuality and corporate hierarchy, less formalities, etc.)

Addressing

How to reach business partners?

  • Business partners in Israel can be contacted by email or phone.
  • It is common for messages sent to general company emails to go unanswered. A similar situation is repeated when dialing the company’s general telephone number.

It is therefore key to know a specific person within the company, who may be able to refer you to his colleagues.

  • PaulSourcing: Tips and recommendations for doing business with Israel. Also includes country basic data and information for entering the its market.

You can also use LinkedIn, a widely used platform in Israel, to search for contacts.

  • If you do not have any contacts in the given company and cannot find them, you can contact the Embassy of the Czech Republic in Tel Aviv, PaulTrade or chambers of commerce (ICCCI, FICC, etc.) with a request for contacts or contact.

Business meeting

  • A business meeting can be arranged by email or by phone.
  • The rules of business relations in Israel are similar to those in Europe, except for some minor differences
  • Courtesy meetings are almost non-existent in Israel. Before the Israelis confirm the negotiations, they usually want to know the prices to find out if the meeting even makes sense. And if they agree to a meeting, they expect to be met with specific information. They get straight to the point, they are interested in price, quality and references. You need to go to the meeting perfectly prepared.
  • Small talk at the beginning of a business meeting is welcome, but it is recommended to avoid discussing political topics (Israeli-Palestinian conflict, occupation), especially if you do not know your partner’s position on these topics.
  • The partner will usually require references. Provide US/Western European references if possible.
  • The business meeting usually takes place at the partner’s office or, for example, at the chamber of commerce, but it can also take place in an informal environment (cafe). Israelis often go to business meetings, especially in the summer, in informal clothes (without a jacket and tie, in sandals). Therefore, it is also possible for you to choose less formal clothes, a tie and a jacket are not necessary.
  • Bringing gifts to business meetings is not common, nor is it common to invite a business meeting to your partner’s home. On the contrary, it is important not to forget business cards. A business meeting can take place at any time during the day during the local working week (Sunday to Thursday), or also on Friday mornings.
  • Israelis are tough businessmen and deal very directly. It is necessary not to interpret this absence of a politeness filter in a negative light. At the same time, it is necessary for you to act assertively yourself – if you do so, you will be an equal partner to the Israelis.
  • In connection with the COVID-19 pandemic, holding meetings via digital platforms (mainly Zoom) has become common.
  • Punctuality is not given the same emphasis as in Europe. It is common for a partner to be slightly late for a meeting, often due to congested roads and the difficulty of finding parking around Tel Aviv.
  • It is not customary to offer alcohol at business meetings.
  • Territorial differences in trade negotiations within the country exist between individual groups of the population (Arabs, secular Jews, ultra-orthodox Jews). For example, it is not appropriate to shake hands with ultra-Orthodox partners of the opposite sex. It is not appropriate to offer or gift alcoholic beverages to Muslim Arabs.

Communication

International business negotiations are mostly conducted in English, although Hebrew is the national language. You can also communicate in Russian, and with Israeli Arabs in Arabic. If possible, try to familiarize yourself with some basic terms or at least the pronunciation of the Hebrew/Arabic names of business partners. An interpreter is not needed in most cases. If you are in Israel, it is ideal to arrange a personal meeting with your partner. You can communicate otherwise via e-mail and phone. Visit Animalerts for more information about Israel culture and traditions.

Recommendation

  • When choosing gifts, it is necessary to pay attention to whether it is acceptable for the partner, e.g. whether the food meets the requirements of kashrut, alcoholic beverages may not be a suitable gift for Muslims, the same applies when choosing a restaurant – it is good to invite the partner and leave it to him for reasons of his own lack of knowledge of local conditions for choosing a restaurant.
  • It should be taken into account that it is not advisable to try to arrange meetings for Friday afternoon and evening and for Saturday; on the contrary, you can work on Sundays. When it comes to Saturdays, we prefer not to even call our business partners – unless we know them well – it can be taken as impoliteness.
  • It is recommended to always confirm a business meeting in advance by phone.
  • Enforcing additional price adjustments or changes in payment terms are practically impossible.
  • It is always advisable to confirm the results of the meeting in writing
  • When visiting religiously or ethnically defined areas and communities, local codes of dress and behavior must be observed, for example not driving into Orthodox neighborhoods and settlements on Shabbat. Due to the diversity of Israeli society, we recommend that you familiarize yourself in advance with the basic realities of life in Israel and with the opinions of local partners.
  • The working week in Israel begins on Sunday and ends on Friday around noon, but formally at the rising of the three stars, i.e. beginning of Shabbat. State offices are also closed on Fridays, when the same regime as in the Czech Republic on Saturdays generally applies. After the beginning of Shabbat, public transport is limited or is completely suspended in some cities (Jerusalem, Tel Aviv).

Public Holidays

The Hebrew calendar is lunisolar, the dates of the Jewish holidays are variable in terms of the Gregorian calendar. This also applies to Independence Day, a public holiday that can also fall in April, even though independence was declared on May 14, 1948. Major holidays and the month (period) in which they usually fall:

  • Rosh Hashanah – New Year – one-day holiday (September-October)
  • Yom Kippur – Day of Atonement – ​​a one-day holiday, all life in the country stops, no TV or radio broadcasts, motorized traffic on the roads practically stops (September-October)
  • Sukkot – Feast of Tabernacles – lasts a week, no work on first and last day (October) • Simchat Torah – Joy of Torah (October)
  • Hanukkah – Dedication (temple) holidays – eight-day holidays, no work on the first and last day (December-January)
  • Purim – Feast of “casting lots” – one day (February-March)
  • Passover – Feast of Transcendence – seven-day holiday, no work on first and last day (March-May)
  • Yom haacmaut – Independence Day (April/May)
  • Lag ha-Omer – Feast of Scholars – one day, school holiday (May)
  • Shavuot – Feast of Weeks (May-June)

Israel Culture of Business