By Douglas Goldstein, CFP®
If you’re a recent immigrant to Israel, you may find that your dream isn’t quite what you expected. Sure, the people are great, the falafel spectacular, and your kids are adapting to Hebrew better than you expected. But the economic situation is tenuous (to say the least).
Israel’s banking systems are different from those in America. For the most part, you can’t get any interest on your checking account, even if you maintain a minimum balance. Another huge difference is the lack of the equivalent of FDIC insurance on Israeli bank deposits. Israeli banks also have different fee structures, and it may be difficult getting an updated list in your native tongue.
The perennial question that olim face is whether their money should make aliya too, or is it better if they leave the majority of their financial assets overseas, and only bring money over as needed?
One of the best deals new olim and returning citizens have in coming to Israel is a huge tax break on foreign investment income. For years, the capital gains, interest, and dividend income they receive from overseas will not be subject to Israeli tax. As with all tax rules, though, there are many details that you should understand, so be sure to stop by and see a local tax adviser to learn the ins and outs. Shlichim may have given you informal advice, but since they don’t know your complete financial picture and aren’t experts in the ever-changing tax code, it is wise to meet with an Israeli tax professional who has expertise in foreign investments for a review of your personal situation. (Or, for an overview, come to an upcoming Lunch & Learn seminar where we’ll have a top Israeli CPA discuss some of the particulars – see www.profile-financial.com to register).
Douglas Goldstein, CFP®, is the director of Profile Investment Services. He is a licensed financial professional both in the U.S. and Israel. He offers securities through Portfolio Resources Group, Inc. Member FINRA(formally NASD), SIPC, MSRB, SIFMA. Accounts carried by National Financial Services LLC. Member NYSE/SIPC, a Fidelity Investments company. His book is available in bookstores, on the web, or can be ordered at: www.profile-financial.com (02) 624-2788 or (03) 524-0942.
