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Doing Business in Israel

Contributed by Adv. Zvi Bar-Nathan (Partner) and Adv. Dr. Daphna Kapeliuk (Partner), Goldfarb Seligman Law Offices

Business Environment

Often referred to as ‘the start-up nation’, the State of Israel offers exceptional opportunities for foreign investors in a variety of industries. The technology industry, and especially the hi-tech sector, have played a prominent role in Israel in the past decade and have been the major driving force of the country's economy. Although small in size, Israel's investment opportunities are diverse and include, among others: hi-tech, aeronautics, telecommunications, biotechnology, security, chemical industry, agro-technology, environment and more. Alongside its vibrant hi-tech industry, Israel discovered offshore natural gas reserves in 2009-2010.

With its long standing financial and monetary stability, pro-investment policies, entrepreneurial culture and innovative, bright, creative and talented human resources, Israel has attracted large investments by major multinational companies over the years. Seeking top-notch research and development hubs for their businesses, these companies view Israel as an innovative and daring environment.

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Legal market overview

The Israeli legal market is sophisticated and foreign investors will find a market replete with lawyers of international standard charging rates that are much lower than New York or London equivalents. In recent years, several of the larger firms have engaged in mergers that upscaled the size of the market’s largest competitors. At the same time, it is a market that is heavily overlawyered – having almost as many attorneys as France, despite the gulf in population size – and this has driven down fees and pushed a number of lawyers to establish boutique firms. Recent examples include former Yuval Levy & Co partner Tomer Maharshak opting not to join newly merged firm Tadmor & Co. Yuval Levy & Co. and instead establishing corporate boutique Tomer Maharshak & Co.

December 2015 saw Epstein, Knoller, Chomsky, Osnat, Gilat, Tenenboim & co merge with M. Firon & Co Advocates and Notaries. Large full-service firms have been actively hiring and several of them recruited during the disintegration of Zellermayer, Pelossof, Rosovsky, Tsafrir & Co in early 2016, as prominent figures and teams from that firm variously moved to Erdinast, Ben Nathan, Toledano & Co. Advocates; Meitar Liquornik Geva Leshem Tal Law Offices; and Fischer Behar Chen Well Orion & Co. Erdinast, Ben Nathan, Toledano & Co. Advocates also recruited a team of project finance lawyers, led by Jonathan Finklestone, from Tadmor & Co. Yuval Levy & Co..

As yet, international law firms are not a significant on-the-ground presence in the market despite legislative changes in 2012 allowing foreign firms to operate in Israel; notable firms with a limited presence include Freshfields Bruckhaus Deringer LLP, Greenberg Traurig P.A and Finnegan, Henderson, Farabow, Garrett & Dunner LLP. International firms considering accessing the market on a greater scale must wrestle with the much lower fee structures in Tel Aviv and the political difficulties of doing business in Israel and the rest of the Middle East.

Dispute resolution is a cornerstone practice of the Israeli legal market but the chief standout practice areas in 2015 were real estate, where a scarcity of residential facilities continues to drive significant renewal and newbuild projects; hi-tech, and in particular cyber security; and general corporate and commercial transactions. The recent opening of a number of gas fields, which followed the discovery of significant offshore gas reserves, means that a number of law firms are attracting a markedly increased level of projects and energy work.

Interview with...

Law firm managing partners and practice heads explain how their firms are adapting to clients' changing needs

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Legal Developments in Israel

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Press Releases worldwide

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