A technology-and-venture-capital-dense economy — sometimes called the 'Start-Up Nation' — where a large share of household and institutional wealth sits inside pension funds and tech-linked equity.
25%capital gains tax for individuals
30%for holders of more than 10% of a company
Indexedcost basis adjusted for inflation
TASETel Aviv Stock Exchange
Capital
Jerusalem (seat of government)
Currency
Israeli new shekel
Main exchange
Tel Aviv Stock Exchange (TASE)
Regulator
Israel Securities Authority (ISA)
How people invest in Israel
Mandatory pension funds are the largest pool of investable capital; many Israeli tech companies dual-list or list directly in the US, so local investors often hold Nasdaq exposure alongside TASE; real estate remains a major store of wealth given constrained supply.
Pension fundsTech equities (TASE & Nasdaq)Real estateVenture capital
Getting access
Residents and international investors face completely different mechanics here, so they are set out separately rather than blended into one set of instructions.
Living in Israel
Opening an account as a resident
Israel taxes investment gains, unlike most of the markets on this site — but it does so with an inflation adjustment that materially changes the real burden on long-held assets.
Open an account with a bank or a licensed non-bank broker. Non-bank brokers have driven costs down significantly and are now a mainstream choice.
Trade the Tel Aviv Stock Exchange in shekels, or use the same account for foreign markets — Israeli investors hold substantial overseas exposure.
Capital gains are taxed at 25% for individuals, rising to 30% for shareholders holding more than 10% of a company.
Understand the inflation indexation, because it is genuinely unusual: the cost basis of a long-held asset is adjusted for cumulative inflation before the gain is calculated, so only the real gain is taxed.
Use the employment-linked savings vehicles. Keren hishtalmut and kupot gemel are the tax-advantaged wrappers most Israeli employees have access to, and they are where a large share of household investment actually sits.
The inflation adjustment is the single most distinctive feature of Israeli investment tax. In a market that has seen meaningful inflation, taxing only the real gain rather than the nominal one is a substantial and often unappreciated benefit for patient holders.
International
Investing in Israel from outside
Israel is an open market with no exchange controls, and the reason most foreign investors are interested is not the listed market at all.
TASE is accessible through international brokers, and Israel ETFs are available in major markets.
The real Israeli technology exposure is substantially not on TASE. Many of the largest Israeli technology companies list in the United States, so a domestic index misses a great deal of what people mean by "investing in Israel".
TASE itself is weighted towards banks, insurance, real estate and defence-linked industrials.
Non-resident treatment depends on treaty position, and Israel has a broad treaty network.
This is the central practical point for a foreign investor: the technology story and the listed domestic market are two different things. Deciding which you want should come before choosing an instrument.
What you can actually buy
Israel's investable landscape splits cleanly between a conventional domestic market and a technology sector that mostly lists elsewhere.
TASE-listed equities
Both
Banks, insurance, real estate and defence-linked industrials dominate. It is a more conventional market than Israel's reputation implies.
The local mechanic: Gains taxed at 25% for individuals, with the cost basis indexed for inflation so only real gains are taxed.
Keren hishtalmut and kupot gemel
Residents
Employment-linked savings and provident vehicles that carry tax advantages and hold a large share of Israeli household wealth.
The local mechanic: The tax treatment and access conditions differ between vehicles and by contribution history — worth understanding specifically rather than treating them as one category.
US-listed Israeli technology
Both
A significant share of Israel's largest technology companies are listed in the United States rather than Tel Aviv.
The local mechanic: For a foreign investor this is where the technology exposure actually is. A TASE index fund will not give it to you.
Residential property
Residents
A dominant household asset in a supply-constrained market with persistently high prices relative to income.
The local mechanic: Purchase tax rates escalate steeply for additional properties, a deliberate policy lever against investment buying.
The fund and ETF route
Israeli investors have a well-developed domestic fund market and hold substantial foreign exposure through it.
Vehicle
Type
For
Notes
TASE-listed ETFs
Listed ETF
Both
Cover both domestic indices and global markets in shekel terms.
Kupot gemel le-hashkaa
Investment provident
Residents
A flexible provident vehicle with its own tax treatment and contribution limits.
Keren hishtalmut
Employment-linked
Residents
Among the most tax-advantaged savings available to Israeli employees, and frequently under-utilised by those eligible.
Offshore Israel ETFs
Listed ETF
International
Track TASE rather than US-listed Israeli technology — check what you are actually buying.
Israel's venture ecosystem is disproportionately large relative to the size of its economy, and it is internationally oriented by design.
The country has one of the highest concentrations of startups and venture funding per capita in the world.
Exits have historically been through acquisition by foreign acquirers or US listings rather than domestic IPOs, which is why the public market does not reflect the sector.
For individuals, access runs through venture funds and syndicates; direct angel investing is comparatively well established here by regional standards.
Israel taxes gains, and then does something most systems do not: it adjusts for inflation first.
What
Rate
Applies to
Capital gains, individuals
25%
Standard rate on investment gains
Capital gains, substantial shareholders
30%
Holders of more than 10% of a company
Inflation indexation
Applied to cost basis
Only the real gain is taxed on long-held assets
Property purchase tax
Escalating
Higher rates on additional residential properties
The inflation adjustment applies to the cost basis before the gain is computed, which reduces the effective burden considerably on assets held through inflationary periods. Rules for the employment-linked savings vehicles differ substantially from those for a general brokerage account. This is general information rather than tax advice.
Risks worth pricing in
International
What international investors should weigh
The most common mistake here is buying the wrong instrument for the thesis:
TASE is not the technology sector. Israel's reputation rests on technology, and a large share of its major technology companies list in the United States. A TASE index fund buys banks, insurance and real estate. This mismatch is the single biggest trap for foreign investors here.
Geopolitical risk is structural. Regional security risk is permanently embedded in Israeli asset prices rather than arriving as discrete events. It is part of the valuation rather than a scenario to be modelled separately.
The market is small and concentrated. TASE is modest in size with heavy weightings in a handful of sectors. Liquidity outside the largest names is limited.
Currency has been volatile. The shekel has moved substantially in both directions in response to both economic and security developments, and it drives a large share of foreign investors' realised returns.
Residents
What domestic investors should weigh
Israeli savers are generally well served by the employment-linked vehicles and often do not use them fully:
Keren hishtalmut is frequently under-used. It is among the most tax-advantaged savings available to eligible employees, and many people either do not contribute at the full rate or withdraw at the first opportunity rather than letting it compound.
Provident fund allocations are set by default. Money accumulates for decades in whatever track was chosen at the start, often by no one in particular. Reviewing the track is a small action with a large cumulative effect.
Housing is a very large concentrated position. High prices relative to income mean a home absorbs an outsized share of household balance sheets, with escalating purchase tax deliberately discouraging additional property investment.
Inflation indexation rewards holding. Because only the real gain is taxed on long-held assets, the tax code favours patience more than a headline 25% rate suggests. Frequent trading forfeits that advantage entirely.
How the market got here
Israel built a technology economy that largely lists abroad, and a domestic market that reflects the rest of the country.
1953The Tel Aviv Stock Exchange is formally established.
1968The Israel Securities Authority is created.
1990sMass immigration and the Yozma programme catalyse the venture capital industry.
2005Pension reform channels household savings into capital markets through provident and pension vehicles.
2010Israel is reclassified from emerging to developed market status by MSCI.
2019TASE itself lists, completing its demutualisation.
Trends shaping Israel
Regional investing patterns that show up strongly in Israel — read the full analysis in investing trends.
At 25% for individuals, rising to 30% for shareholders holding more than 10% of a company. Distinctively, the cost basis of a long-held asset is indexed for cumulative inflation before the gain is calculated, so only the real gain is taxed — which reduces the effective burden meaningfully on assets held through inflationary periods.
Is buying a TASE index fund how I invest in Israeli tech?
No, and this is the most common mistake foreign investors make here. A large share of Israel's major technology companies list in the United States rather than Tel Aviv. TASE is weighted towards banks, insurance, real estate and defence-linked industrials. Decide which exposure you actually want before choosing the instrument.
What is keren hishtalmut?
An employment-linked savings vehicle that is among the most tax-advantaged options available to eligible Israeli employees. It is widely under-used — either through contributing below the full rate or withdrawing at the first permitted opportunity rather than letting it compound.
What does inflation indexation actually do for me?
It adjusts the purchase price of your asset upward for cumulative inflation before the taxable gain is computed. On an asset held through a period of meaningful inflation, that can be the difference between paying tax on a large nominal gain and a much smaller real one. It structurally rewards holding over trading.
Can foreigners invest in Israel easily?
Yes. There are no exchange controls, TASE is reachable through international brokers, and Israel ETFs are available in major markets. Non-resident tax treatment depends on your treaty position, and Israel has a broad treaty network.
Rates, thresholds and regulatory references on this page were last verified on . Israel's rules are moving quickly — confirm anything you intend to act on against a primary source or a qualified adviser. Nothing here is investment, legal or tax advice.
