Many Israelis still look to US to expand their businesses

Philip Stein, CPA: “There is competition between the various states in the US, as each state makes its effort to attract outside investors to it. Israeli businesspeople tend to run as a default to Brooklyn, Los Angeles or Silicon Valley because there are many Israelis there. However, it is much smarter to shop between the various states.

“My recommendation is to look at the headlines and find the states that suffered, and continue to suffer, the most from the economic crisis, because those are the ones that will make more of an effort for a business owner through lowered corporate taxes and other benefits.

“For example, New Jersey is a state worth looking into in terms of investment because it is suffering a very big deficit. Recently, a new governor was voted in, and he is making a super effort to grant incentives to overseas businesses and investments.

“Texas is another state that an Israeli businessperson should consider seriously, because it is a state that has always wanted to be different and to stand out, and it is sometimes viewed in the US as a country of its own. Texans have a special pride and a competitive nature. Their mind-set is essentially, ‘We won’t wait for Obama to give incentives, we’ll do it ourselves.’ For example, in Texas there are various tax benefits, such as no individual income tax. That means only federal, not state, taxes are paid.

“The idea of shopping between states can also be extended to shopping between specific cities. Here, too, my recommendation is to look for the cities whose economic situation is lower. For example, Newark [in New Jersey] is today in that situation and offers wonderful opportunities for outside investors.”

TECHNION RESEARCHERS WARN OF ISRAELI REAL ESTATE BUBBLE

While the housing market in Israel is showing signs of a bubble similar to that of the pre-crisis year of 2007, a similar collapse in housing prices is unlikely, say researchers from the Technion-Israel Institute of Technology in a paper.

Dr. Daniel Ben-Shahar and PhD candidate Yaakov Varchevsky examined home prices patterns and housing availability in Israel form 1989-2010 and found that the average home price in terms of the average net monthly household income had risen to 60 salaries in 2009 from 47 salaries over a 20-year period.