Bank of Israel's latest figures on the Israeli institutional investor portfolio, valued at 2.5 trillion shekels (approximately $685 billion), show a significant 43.2% exposure to foreign markets. Foreign currency holdings account for 22.2% of these investments. Complementing these statistics, a 2024 study on Israeli investor behavior published by the Tel Aviv Stock Exchange indicates that over half of individual investors are now looking beyond national borders for investment opportunities.
This shift isn't limited to large-scale investors. There's a noticeable uptick in Israeli households opening bank accounts abroad. This trend stems from a dual desire: to spread financial risks and diversify investments, as well as to safeguard against potential domestic economic instability.
For those considering this route, several key factors warrant careful consideration, ideally with guidance from financial experts. These include selecting an appropriate country and bank, understanding the tax implications, and navigating regulatory requirements.
While Israeli law doesn't prohibit citizens from holding foreign bank accounts, it does mandate reporting these accounts to tax authorities. This is a crucial aspect to consider before proceeding. The choice of country for opening an account is the next critical decision. Factors influencing this choice may include the regulatory environment of the prospective country and whether the individual holds dual citizenship.
Selecting the right bank is equally important. Prospective account holders should be prepared for foreign banks to require extensive documentation, including proof of identity and address, income verification such as pay stubs, and evidence of additional income sources.
Thorough research into banks in the chosen country is essential. Key considerations include the bank's reputation, financial stability, and range of services offered. It's also vital to scrutinize the fee structure, including account management fees, money transfer charges, interest rates on credit balances, and foreign currency conversion fees.
It's important to note that this information should not be considered a substitute for personalized advice on taxation, regulatory compliance, and investment strategies. Individuals considering opening foreign accounts or investing abroad should consult with financial experts to navigate these complex decisions effectively.
