Israel has partially or fully privatized 98 companies between 1986 and 2020 and the proceeds from it amounted to 4.5 billion dollars.
Likewise, according to the Israeli government, it is planned to continue with the process of privatizing its holdings in financial institutions, as well as in state land, seaports, the Postal Company, energy and transport utilities and parts of the defense industry. .
Historically, the government has been involved in almost every sector of the Israeli economy.
In recent decades, privatization has been an essential element of broader market reforms initiated by the government, which aim to promote private sector growth, primarily by improving competition.
Israel has made substantial progress in recent years, resulting in the privatization of many state-owned companies and the reduction of state subsidies to commercial companies.
In general, state enterprises are divided by law into two main categories: State Enterprises and Mixed Enterprises. In addition to state-owned companies, there are public limited companies established under specific laws that regulate their operations and governance structures.
On the one hand, Government Companies are companies in which the Government owns more than 50% of the voting rights or has the right to appoint more than half of the members of the board of directors.
Government Companies are subject to the Israel Government Companies Law and the regulations promulgated thereunder (collectively, the “GCL”).
Above all, government companies play an important role in the Israeli economy.
In 2020, they employed approximately 54,000 people or 1.3% of the Israeli workforce, accounted for 15.5 billion New Israeli Shekels (NIS) in exports, and owned assets worth NIS 222.1 billion (based on preliminary data).
These companies include various utilities, monopolies, and defense companies.
On the other hand, Mixed Companies are companies in which the State owns 50% or less of the voting rights or has the right to appoint less than half of the members of the board of directors.
Mixed Companies are not subject to the same degree of regulation as State Companies. However, Mixed Companies are subject to certain provisions of the LCG, including the qualifications and approvals required for the appointment of certain directors by the Government. Joint ventures play a relatively minor role in the economy.
In 2018, the Government Enterprises Authority completed the full privatization of Israel Military Industries Ltd. by establishing a new Government Enterprise to which the business of Israel Military Industries was transferred and the new Government Enterprise was sold in a private sale to an investor.