Middle East

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Israeli has recently announced it will keep cryptocurrency companies off the stock market and announced a draft tax plan for ICOs. While the country would benefit from ICO attention, as it lacks a financial hub such as London, the government does not seem clear in which direction it wants to go, outside of current regulations.

Israel is located in the MIddle East: The cryptocurrency landscape in the Middle East has been dominated by Israel, with its high concentration of start-ups and influence on the global technology scene.


Cryptocurrency trading in Israel

Cryptocurrency, which was previously unregulated in previous years in Israel, has come unders scrutiny in the last 18 months. In late 2017, according to Bloomberg, Shmuel Hauser, head of Israel Securities Authority, Hauser has said that the country should undertake “daring” cryptocurrency regulations in an effort to boost digital projects and start-ups. That being said, he also state that ICOs and “investments in bitcoin reminds me of the 19th-century gold rush,” in addition to the fact that bitcoin has “gotten out of control.”

Early in 2017 Hauser also announced the formation of a new task team to define new regulations for digital currencies. It was eventually announced at the end of 2017 that Israel’s markets regulator proposed regulation to ban companies based on bitcoin and other digital currencies from trading on the Tel Aviv Stock Exchange. While he didn’t say what companies would be affected, there are two self described cryptocurrency companies on the exchange.

Regulation of ICOs in Israel

In January of 2018 the Israeli Tax Platform released their draft circular. The plan proposes imposing value-added tax (VAT) on ICOs. It also differentiates them into two categories, service transactions and sales transactions. The draft implies that goods or services offered to foreign residents would result in “a zero tax invoice” under standing laws.

The draft only outlines taxing companies launching token sales (ICOs) but it does not touch cryptocurrencies directly.

Cryptocurrency markets in Israel

There are few prominent ICOs in Israeli but the country has not seen the practice become widespread, as many Israeli CEOs of ICOs run their companies out of more ICO friendly countries such as Switzerland or Gibraltar.

IBC’s planning and strategy team can provide expert advice on ICOs in different jurisdictions. If you’re thinking of holding an ICO in COUNTRY and you’d like more information, contact us here.

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