NEW YORK (Jul. 1)
The first phase of Israel’s accord with the European Common Market, which became effective today, creates unique opportunities for American investors in Israel, the Government of Israel Investment Authority said here today. The Free Trade Area agreement Israel concluded with the European Economic Community (EEC), the first of its kind with a Middle Eastern country, establishes an initial 60 percent reduction on customs duties on all Israeli industrial exports to Common Market countries and calls for a gradual phasing out of customs duties, Israeli industrial products will enter the Common Market duty free by July, 1977.
This agreement, together with the recent accord reached between Israel and the United States under which the American government agreed to promote foreign investment in Israel, makes it possible for a U.S. company to set up a manufacturing subsidiary in Israel and take advantage of the special treatment it receives under U.S. tax rules, the Investment Authority said. The company can export manufactured products to Europe and receive the benefits of the new Common Market agreement as well.
The Investment Authority pointed out further that in addition to the agreements with the Common Market and the U.S., the Israeli government offers foreign investors a special business package to help them establish manufacturing subsidiaries in Israel. The package is designed to assist the investor in the investment phase through financial leverage and in the operating phase by providing low-cost working capital and a rebate for direct taxes, the Authority said.
ADVANTAGES NOW POSSIBLE
American businesses can now take advantage of Israel’s LDC status under the U.S. Internal Revenue Service Code which entitles the Ameri-
Under terms of its agreement with the EEC, Israel’s domestic market will remain protected until 1980 when imports, intermediary products and equipment will be totally exempt from all Israeli customs duties. This should give Israeli domiciled manufacturers an opportunity to adjust to growing competition. Infant Industries will be given temporary protection as Israel increases duties on products of that segment of its economy in the interim period 1977-1989, the Investment Authority said.