Israel's newest investment market- Judea and Samaria
By: Joel Bainerman
Tekoa, Israel- In recent years more and more Diaspora Jews have discovered that Israel presents attractive investment opportunities in high tech and real estate.
Now, a new investment market is emerging- in Judea and Samaria.
Despite more than 30 years of building Jewish communities in J-S - the commercial infrastructure in these regions is very undeveloped.
That's the bad news.
The good news is that for Diaspora Jews seeking profitable investment opportunities in Israel, they will be found in Judea and Samaria (J-S).
Says local Israeli business writer Avi Miron: "Without a doubt- there is a tremendous potential to develop J-S's commercial and economic infrastructure by investing private capital in new and existing enterprises. Private capital will find many very attractive investment opportunities."
Unlike the situation in the construction of new housing units in J-S, no special restrictions are issued by the Israeli government as to how many new companies can be created or in which communities. The business registrar office at the Ministry of Justice does not distinguish between a company operating in J-S as opposed to anywhere else in Israel. Thus an investment in a company based in J-S or targeting just this market is governed by the same laws and regulations that the Israeli government applies to all Israeli commercial enterprise.
A major attraction for private investors are that the residents of J-S, who are extremely educated, motivated- and like all Israelis- very entrepreneurial. Collectively, as a target for investment, they represent an untapped reservoir of talent that has never been in the focus of any Israeli or foreign investment vehicle.
For private investors, the most attractive opportunities would be to invest in companies that provide a service or product to the local market. This could be by providing a service not currently existing in J-S- or a product that is sold in J-S and in the general Israeli market.
Miron: "In certain sectors-, such as the gourmet food market, unique opportunities exist. For instance, there are currently a small group of boutique wineries operating in Judea and Samaria that if purchased and merged- would create a more efficient, competitive, and profitable company. With some financial advice and capital from one Diaspora Jew- a major new winery could be created to rival the success of the Golan Heights Winery (Gamla, Yarden labels)."
Diaspora Jewish investors will find attractive investment opportunities in these targeted sectors:
- Gourmet and organic food companies, boutique wineries
- Retail outlets and distribution of consumer products
- Knowledge-based software start ups, publishing, translation, R&D facilities for Israeli high tech companies
- Tourist attractions and hotels
- Private education institutes
- Transportation services
- Specialized medical centres and senior citizen facilities
- Small industrial enterprises that can provide inexpensive sources of labor
- Real estate and housing projects.
Miron is one of the few Israeli business journalists to take an interest in covering business developments in Judea and Samaria. He states that what most people don't understand is that urban West Bank Arabs saw their standard of living skyrocket from 1967-1987 - which created enormous opportunities for Israel companies to sell products and services to the local population.
"But growth was a two-way," he points out.
Israel, he believes, has an interest in raising the living standards of the rural Arabs- those that didn't enjoy the benefit of earlier Jewish-Arab cooperation such as the Israeli Arabs and the urban West Bankers did. If the rural West Bank Arabs are brought into contact with the Jews of J-S- their living standards will rise.
"The fact is whenever Arabs become closer to the Jews economically, the more they work with/for the Jews- the more money they have- and the more products and services Israeli companies can provide them with. When Arabs and Jews do business together- and cooperation and coexistence occurs- both sides benefit. It's always been this way- and will always be."
Joel Bainerman writes on Israeli business and economic issues. His published archive can be viewed on his website at www.joelbainerman.com
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