Israel Shatters Records With Surprising Surge in Foreign Investment
Israel experienced a record-breaking year for foreign direct investment (FDI) in 2025, attracting approximately $26.2 billion, a significant 78% increase from $14.8 billion in 2024. This surge is particularly noteworthy as many developed economies saw a decline in capital flow. Globally, FDI rose by about 6%, while OECD countries experienced a 6% decrease. Israel ranked eighth among OECD nations for absolute FDI and seventh relative to its GDP.
The total value of investment deals in Israel also jumped by 65% to $36.6 billion in 2025, surpassing the previous peak in 2021. However, the number of deals decreased slightly from 1,643 in 2024 to 1,575 in 2025. This increase in value was largely driven by mega-deals, including Alphabet's acquisition of Israeli company Wiz for an estimated $32 billion and Palo Alto Networks' purchase of CyberArk for approximately $25 billion.
The technology sector, particularly software and IT, dominated these investments, accounting for about 90% of the deal value, or $33 billion. Life sciences and health represented only 3.4%, and communications 2%. The United States remained Israel's primary investment partner, contributing around $32 billion, or 90% of the total FDI recorded.
This positive trend continued into 2026, with Israel attracting $14.1 billion in FDI in the first quarter alone, making it the strongest quarter ever and exceeding half of the total 2025 investment. Preliminary data also indicates approximately $6 billion in deals during the first quarter of 2026.
Dr. Shmuel Abramzon, the chief economist at the Ministry of Finance, acknowledged the ongoing geopolitical and economic challenges but stated that Israel received a "clear expression of confidence from foreign investors." He noted that while Israel is attracting substantial sums and outperforming other developed nations, the growth is heavily reliant on a few large deals and the tech industry. The challenge ahead is to transform this exceptional momentum into a broader and more stable trend within the Israeli economy.
