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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.
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
Client insight -
Bridging the Gulf
The Legal 500 Middle East - Events
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Middle East
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Press releases
Legal Developments in Israel
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Changes in California’s Privacy Law Have Worldwide Impact
If you are the operator of a commercial internet website, an online service or a mobile application (app) ("Operator") and you collect personally identifiable information (PII) 1 about consumer residing in California, you need to update your privacy policy following the enactment of a new California law in order to avoid potentially significant penalties. -
Companies Law (Amendment No. 23), 2013
On December 23, 2013, the Israeli Knesset approved Amendment No. 23 to the Israeli Companies Law, 1999 (the " Amendment ", and the " Companies Law ", respectively). The Amendment is primarily concerning the establishment and governance of "Charitable Company Fund" (the " Fund "), which are companies established in order to finance and fund non-profit entities. Below is an overview of the main provisions of the Amendment: -
Critical Information for New Immigrants and Returning Residents Regarding Tax Benefits
A New Governmental Proposal to Significantly Narrow the Tax Benefits for New Immigrants and Returning Residents in Israel -
New Temporary Tax Relief for "Trapped Earnings"
On November 5, 2012 the Israeli Parliament (Knesset) adopted a proposal of the Israeli Ministry of Finance and passed legislation providing for a temporary tax relief with respect to the recapture tax applicable to certain Israeli companies holding undistributed earnings that were previously exempt from Israeli corporate income tax under tax incentive programs. -
The Coming of Age of Environmental Regulation in Israel – Recent Aligning with Stringent EU Standa
Environmental policy and regulation in Israel have developed significantly over the course of the past several years. After decades of what may be considered as regulatory standstill, Israeli environmental regulation has taken a tremendous leap forward. Numerous environmental matters, some of which were not previously regulated and others which were subject to outdated standards, have been revised and updated through new comprehensive statutes, innovative regulations and professional guidelines. -
Israeli Market Developments
Welcome to the 4 th edition of Unfolding, which looks at some important developments in Israel in recent months. Much has happened in Israel since the last edition of Unfolding. The Israeli economy may be small in scale, but never in the level of its business activity. -
Memorandum on the Law for Promotion of Competition and Reduction in Concentration
Following on from the Government's decision to adopt the recommendations of the Committee for Increasing Competition in the Marketplace, the Government published last week a Memorandum on the Law for Promotion of Competition and Reduction in Concentration, 5772-2012. The Memorandum aims at providing a statutory framework for implementing the recommendations of the Committee. -
Israeli Law Update February 2012
Corporate and Securities Law -
Agency Contract Law (Commercial Agent and Supplier), 5772-2012
On February 27, 2012, the Agency Contract Law (Commercial Agent and Supplier), 5772-2012 (hereinafter: the “Law”) was published. The Law shall enter into force 60 days from the date of publication. -
Why is it important to adopt Anti-Bribery Procedures? - by Adv. Gil Remeny
Is your business involved in international trade? If the answer to this question is a resounding “YES”, then it might well be time for your business to prepare and adopt a code of conduct that includes procedures to detect and prevent bribery of foreign government officials. The day is coming when not having such a code will be a bar to entering many different lucrative markets and will place you and your business in danger of breaking the law.
Press Releases worldwide
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Bundesverfassungsgericht: Sampling is permissible under certain circumstances
The Bundesverfassungsgericht, Germany’s Federal Constitutional Court, recently had to grapple with the issue of whether greater value ought to be attached to artistic freedom or copyright law in a given case. In its judgment of May 31, the Court chose to bolster artistic freedom (Az. 1 BvR 1585/13). -
VEGAS LEX discusses attracting private investment to defence industry at ARMY 2016 Forum
On September 7, 2016 VEGAS LEX organized a roundtable on Private Investment and PPP in the Defence Industry: Participants, Mechanisms and Prospects as part of the ARMY 2016 international military technical forum. -
Avoid mistakes in will
Anyone who does not wish to have their estate distributed in accordance with the rules of intestate succession needs to prepare a will or contract of inheritance. In order to prevent disputes from occurring, it is important that the testator’s final wishes be clear. -
Slovakia: Schoenherr advises Albéa on the acquisition of Scandolara Slovakia
Schoenherr Bratislava has advised the Albéa group ("Albéa") on the acquisition of 100 % of the shares in SCANDOLARA TUB-EST, s.r.o. ("Scandolara"), a Slovak subsidiary of the Italian Scandolara Group, which produces laminate tubes. read more... -
19 August 2016: BLKB invests in Robo-Advisor True Wealth
Basellandschaftliche Kantonalbank (BLKB) and the Swiss robo-advisor True Wealth AG have entered into a strategic partnership. BLKB further acquired a minority stake in True Wealth. -
22 August 2016: Recordati acquires Pro Farma AG
Recordati, an international pharmaceutical group listed on the Italian Stock Exchange, acquires the Swiss pharmaceutical company Pro Farma AG. -
2 September 2016: Sale of Majority Stake in AutoForm Group
On 22 July 2016, the shareholder sold a majority stake in the AutoForm Group to Astorg Partners. AutoForm Group is a leading provider of software solutions for the design and sheet metal forming simulation. Astorg Partners is one of the most successful independent private equity companies in Europe. -
AVELLUM Advises in Connection with Increase of Horizon Capital’s Stake in Datagroup
Kyiv, 9 September 2016 - AVELLUM advises Custos Invest & Finance Inc., one of the Datagroup’s shareholders, in connection with the increase of the stake of Horizon Capital in Datagroup from significant minority to over 70%. -
OLG Thüringen: Misleading advertising through use of a manufacturer’s logo
If a car dealership advertises with a manufacturer’s logo without being an authorized dealer, this may constitute misleading advertising vis-à-vis consumers and violate competition law. -
Baker & Partners to Hold Breakfast Briefing on Financial Institutions Caught Up in Fraud Litigation
Baker & Partners will be holding a Breakfast Briefing on fraud and asset recovery cases involving financial institutions on 22 nd September, 8.00-9.30am, at The Royal Yacht Hotel.