Israel: Regional 2024 Doing Business In Update

Published on May 16, 2024

2024 Israel Regional Update

Firm Name: Herzog
Author: Meir Linzen

1. How is the political environment impacting business in or with your country?

The current circumstances in Israel resulted in some deals being paused, as well as some uncertainty in the market. The market recovered quickly, and there have been a large number of M&As and investment rounds in the past few months. As an indication, our workload is on the high end, and we remain very busy. Some foreign VCs and MNCs without experience in Israel retain some reticence about operations in Israel, but this does not reflect the market. The labor market has been impacted by those called up for reserve duty, but the government and civil society have implemented incentives and other measures to offset such impact.

2. Which countries have you previously collaborated with and do you see potential for future collaboration with on cross-border matters within the region?

Israel remains a very international-facing market and its high-tech sector, particularly, enjoys significant investment and M&A opportunities from various jurisdictions. Our firm has collaborated with WLG firms in Europe recently on a number of occasions. Israel continues to see an increase in transactions within the region - especially with the UAE -a trend that is expected to continue despite the political environment.

3. What legislation has recently changed or is changing that a potential international client should be aware of?

ESG legislation and best practices continue to evolve. A new international arbitration law is expected to make Israel a more attractive venue for international arbitrations and increase the use of arbitration clauses within Israeli deals. Government authorities exercise increased antitrust oversight and impose more stringent filing requirements, making antitrust advice and analysis more important. Recent legislation provides tax breaks for private investors investing in small companies employing R&D. The recent ban in the USA against non-compete clauses in employment agreements (pending legal challenge) will impact many Israeli companies that have American employees.