Financial crisis spurs ex-pats to return

New government incentives also lure Israelis living abroad to return to their homeland.

By AMIR MIZROCH
There has been a 50 percent increase in the number of ex-pats applying for state help to return to Israel since the world financial crisis intensified, the Immigrant Absorption Ministry reported this week. Between August and mid-October of this year, some 2,050 Israelis have returned, an increase of 50% from the same period last year, when 1,370 Israelis returned. Some 7,000 Israelis have returned so far in 2008, far more than the recent annual average of about 4,050. Another 3,000 have already registered with the ministry to return next year, and the ministry expects 15,000 Israelis to return in 2009. There are an estimated 700,000 Israelis living abroad, with 60% of them in North America. The huge increase is also partly a result of the ministry's campaign to entice Israelis to come back, held in conjunction with the country's 60th anniversary celebrations. Recent reforms in tax rules for returning Israelis are playing a big part in the ministry's campaign. Early next month, the Immigrant Absorption Ministry, the Tax Authority and the Jewish Agency for Israel will embark on a joint campaign to make Israelis living abroad aware of these benefits, particularly a 10-year exemption on reporting and paying tax on all passive and earned income from outside Israel, similar to the benefit given new immigrants. This includes pensions, rents, royalties, dividends, capital gains, interest payments, and profits from overseas businesses. These benefits would also extend to qualifying trusts. Returning Israelis who lived abroad for over 5 years, and return during 2007, 2008 and 2009, would qualify for this exemption. The joint campaign will highlight Israel's current economic stability in the face of the world economic crisis, even though experts and analysts predict mounting job losses and an economic slowdown here as well. Elihu Ben-Onn, host of the IBA's popular The Israeli Connection - Conversations with Israelis Abroad weekly worldwide phone-in show, said that while he had noticed increased talk about returning home due to the financial crisis, he did not believe masses of Israelis would be returning to their homeland. "Over the past several weeks many Israelis on the show have spoken about the financial crisis, but I haven't heard anyone say 'I'm closing my shop, packing up my things and coming home because the situation is so bad'," said Ben-Onn. "We ask them how they feel about the crisis and many say that they are considering returning, but there is definitely no noticeable decision by veteran yordim to come home," Ben-Onn said, adding that some Israelis who are overseas on business projects and were now finding it hard to get credit for their projects might be more interested in coming home than long-term emigrants. What Ben-Onn has noticed is Israelis saying that due to the rising costs of living and travel, they are finding it harder to afford visits to family here. "If in the past the whole family would come to Israel for a visit or vacation, now in many cases it is not the whole family, but just a few members, and for shorter periods," he said.