Resilience in Israel’s FDI inflows in 2024 and a renewed upward trajectory in 2025.
The Chief Economist Department in the Ministry of Finance published the annual report on Foreign Investments. The report indicates a worldwide downturn in foreign investment in 2024, which was also felt in Israel, while the first half of 2025 shows a strong resurgence, reflected in a significant rise in foreign investment activity.
The report outlines key events and trends in the foreign investment landscape in Israel and globally in 2024, analyzing the leading target and source countries for investment in Israel.
The Chief Economist at the Ministry of Finance, Dr. Shmuel Abramson:
“Given the global decrease in foreign investments in 2024, and despite domestic challenges, Israel successfully demonstrated resilience in investment flows, recording a relatively moderate slowdown compared to OECD countries. Preliminary data for 2025 indicate an impressive recovery, reflecting growing foreign investor confidence in the Israeli economy. The Ministry of Finance continues its efforts to promote international economic agreements, including investment agreements. These measures, alongside the removal of regulatory barriers, improvements to the business environment, and the improving regional stability, are expected to support and strengthen investment flows to Israel. The Investment Funds Tax reform, announced by the Minister of Finance in November 2025, is set to serve as a central pillar in attracting foreign investment to Israel in the coming years.”
According to OECD data, Foreign Direct Investment (FDI) inflows into Israel totaled USD 14.8 billion in 2024, a 9% decrease compared to 2023, which recorded USD 16.2 billion. Despite the ongoing war, the decline in investment flows to Israel was slightly lower than the decrease recorded across OECD member states (-10%). Some economies experienced sharp declines such as Germany (-90%), China (-65%), and Japan (-40%), while others recorded significant increase, including Australia (+52%) and Canada (+34%).
Foreign investment transaction data, collected by the Chief Economist Department (representing announced transactions, as opposed to realized capital inflows), totaled USD 22.2 billion in 2024. The comparison to 2023 is significantly influenced by the Intel deal announced that year. Including this transaction, the total value of transactions in 2024 reflects a decrease of 33% compared to 2023. However, excluding this specific deal reveals a 24% increase.
The United States retained its position as the primary source of foreign investment transactions in Israel, with USD 13.7 billion, accounting for 62% of total investment inflows during the year. According to the database, other significant source countries include the United Kingdom, Germany, China, Sweden, and France.
The software sector accounted for 70% of total inflows, followed by the life sciences sector (10%), which includes fields such as biotechnology, medical equipment, and pharmaceuticals. The traditional energy sectors (oil, gas, and coal) also accounted for about 10% of total inflows.
Preliminary Data for 2025
FDI inflows into Israel in the first half of 2025 totaled USD 10.2 billion, marking the strongest half-year since 2021 (when inflows reached USD 14 billion), According to OECD data. This represents a 35% increase compared to the corresponding period in the previous year, when FDI inflows amounted to USD 7.5 billion.
The English report is a shortened version of the full report published in Hebrew.