Obstacles to Overcome The Israeli market has had a strong showing in the past 10 years, but is still quite young and in some ways remains untested. The most significant—and unknown—obstacle to Israeli success is conflict with its neighbors, particularly Palestine. Peace is tentative at best, and violence could disrupt production, scare off foreign business partners and investors, and siphon the workforce into the military. Furthermore, Israel's tax system is an encumbrance for investors. In order to gain the tax-free status they have in America, investors must appeal to an Israel tax commission that will either allow an exception or mandate a 20 percent tax.