Doing business in Israel getting (slightly) harder, World Bank says

‘Startup nation’ slips 3 spots to overall ranking of 52 in annual ‘Ease of Doing Business’ index

Severe traffic on the Ayalon Highway in Tel Aviv on October 28, 2015. (Simcha Simon, courtesy)
Severe traffic on the Ayalon Highway in Tel Aviv on October 28, 2015. (Simcha Simon, courtesy)

Doing business in the “startup nation” is becoming increasingly difficult, new figures by the World Bank show, with Israel slipping three spots in the body’s global rankings.

In its annual “Ease of Doing Business” report for the 2017 calendar year, Israel was given an overall rank as the 52nd easiest place to do business, slightly worse than its 2016 ranking of 49th.

The 2017 ranking list was topped for the first time by New Zealand, which knocked long-time first place holder Singapore into second place.

The World Bank index measures 10 variables that affect business activity, including the opening of a business, registering of property, paying of taxes and protection of minority investors.

While Israel fared well in the “Starting a Business” category, jumping nine points from the 2016 ranking, it dropped points in every other variable measured in the index.

Despite the country’s reputation as a high-tech startup hub, politicians and business leaders have long complained of excessive red tape and government regulations that make opening and running a new business too difficult.

Earlier this year, a top Economy Ministry official warned that Israel was slipping in various business rankings compared to the rest of the world.

In a report presented to Prime Minister Benjamin Netanyahu in June, the Economy Ministry’s chief scientist, Avi Hasson, said a shortage of skilled human resources, insufficient government spending in R&D and new OECD taxation guidelines of multinational corporations could negatively affect business activity in Israel.

“If we do not take the appropriate measures now, they will be forced upon us in a few years from a position of weakness and after a lot of potential has been squandered,” Hasson said in his report.

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