World

Israel’s tech startups look to US amid uncertainty at home

A growing number of Israel’s tech startups are incorporating in the United States, attracted by deep pocketed US funds and pro-business policies, and with an extra push from a planned judicial overhaul at home that has rattled investors.

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That marks a reversal, as Israel had managed in the past decade to persuade more of its startups to set up their legal identity domestically.
It may not mean jobs shifting overseas en masse — the tech sector accounts for 14% of Israeli jobs — but registering companies or intellectual property (IP) abroad can affect where taxes are paid and so impact government revenue.
Entrepreneurs and investors told Reuters there were good business reasons for incorporating in the United States, and particularly Delaware, which is considered pro-business and a tax haven as it has low corporate and no state sales taxes.
But some also cited Israeli Prime Minister Benjamin Netanyahu’s judicial overhaul, which his right-wing government says is needed to tackle over-reach by the courts but which critics view as an assault on democracy.
Though the overhaul does not directly affect the tech sector, Ian Amit, a former Israeli military officer, frets about its impact and is taking his startup across the Atlantic.
“It’s just a very high level of uncertainty,” said Amit, who is registering his artificial intelligence-based cloud security firm Gomboc in Delaware.
“It mainly really revolves around corruption and uncertainty of what system is there to protect me as a business, from a tax perspective, from a legal perspective or an intellectual property perspective,” he said.
The economic risk for Israel’s government is that its plans, which have sparked unprecedented nationwide protests, scare a tech industry that accounts for almost a fifth of the country’s gross domestic product and about 30% of tax income. Some entrepreneurs already appear to be voting with their feet.
As many as 80% of new Israeli tech startups in 2023 have so far chosen to incorporate in Delaware, up from 20% in 2022, according to an Israel Innovation Authority (IIA) survey that also showed companies intend to register future IP overseas. IIA did not give the number of companies surveyed.
“The fact that you are shaking up the judicial system puts Israel in a very high level of uncertainty and investors don’t like uncertainty,” said IIA Chairman Ami Applebaum, who is also chief scientist at the Ministry of Innovation, Science and Technology.
Yair Geva, a partner who runs the tech group at law firm Herzog, Fox and Neeman, said that not only were new Israeli companies incorporating in Delaware, but some existing ones were expanding research and other operations outside of Israel.
“So, it’s somewhat of a bigger issue than just the incorporation aspect of it,” he said.
A survey of 615 firms by Startup Nation Central showed that 8% of Israeli startup/tech companies had started moving their headquarters abroad, and 29% intended to do so soon.

Startup nation

Some entrepreneurs and investors said the decision to register in the United States was business, not political.
After all, Israel’s tech sector relies heavily on foreign investment, and a drop in funding to startups following interest rate rises and the collapse of major tech investor Silicon Valley Bank may be encouraging firms to go where the money is.
“If you want to operate in a global world and you want American investors … then that’s the way it is,” said Ronen Feldman, founder and CEO of ProntoNLP.ai. “It’s pure business.”
Tomer Tzach, CEO and co-founder of agri-tech company CropX, is considering switching incorporation to Delaware.
“At the end of the day as a CEO I need to do what’s right for my shareholders, my investors, my company and I feel terrible about it,” said Tzach.
Michael Fertik, founder of Heroic Ventures, a Silicon Valley-based early-stage venture investor, has invested in more than a dozen Israeli startups since 2015. He insists on Delaware incorporation and existing Israeli startups seeking a new funding round from him must switch.
“It’s better to have a Delaware C Corp from the beginning. It’s true in all cases, without exception,” he said.
But the Israeli government’s judicial overhaul is casting a shadow for some.
Adam Fisher, a partner at Bessemer Venture Partners and long-time investor in Israeli startups, has been happy to invest in Israeli-based tech firms over the past decade. He isn’t forcing existing portfolio firms to switch but now recommends entrepreneurs incorporate in Delaware and open an Israeli unit.
“I don’t view it as ‘Israel’s not good anymore’. We don’t know what’s going to happen. Nobody knows. It is just uncertainty versus certainty,” said Fisher.
Setting up shop in Delaware is mostly psychological, according to Ayal Shenhav, head of hi-tech and venture capital at law firm Gross & Co.
“It’s not something concrete that you can say ‘judges in Israel are corrupt’. No one is saying that,” he said. “It’s just a feeling that it is not as stable as it used to be and a lot of people follow the crowd.”
Yaron Samid, managing partner of the TechAviv Founder Partners fund, said that for US investors incorporating in Delaware removes “one variant in a highly uncertain business of a startup”, but investment in Israeli startups would continue.
“Israel tech is not going anywhere,” he said, “because we have a an incredible bunch of talent that is producing more and more great companies, so whether they are structured as US or Israeli corporations is really not significant for the tech ecosystem.”

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World

Crown Prince of Abu Dhabi meets with CEOs of leading Norwegian companies

H.H. Sheikh Khaled bin Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi, has met with a group of CEOs from leading Norwegian companies, as part of their participation in the UAE-Norway Investment Forum, held alongside his official visit to the Kingdom of Norway.

During the meeting, H.H. Sheikh Khaled bin Mohamed bin Zayed underscored the UAE leadership’s commitment to strengthening economic cooperation with its international partners.

He highlighted that investment in innovation and knowledge is a cornerstone for achieving sustainable development, noting that enhancing collaboration with Norwegian companies across key sectors will open new avenues for mutual economic growth between the two countries.

The UAE-Norway Investment Forum, taking place in Oslo, aimed to highlight available investment opportunities and strengthen trade relations between the UAE and Norway, fostering shared interests and supporting innovation and knowledge-based economic visions.

-wam

World

At the Indonesia International Book Fair 2024, TRENDS inaugurates 10th global office, releases four books

As part of its Asian research tour, partnership with Aletihad News Center, and
primary sponsorship of the Indonesia International Book Fair 2024, TRENDS
Research & Advisory inaugurated its office in Jakarta, marking its 10th location
worldwide. It also released four books in Indonesian.
The inauguration event was attended by ambassadors of the UAE, Bahrain, and
Jordan to Indonesia, chairpersons of the UAE and Indonesian Publishers’
Associations, the Director of TRENDS’ Jakarta office, and a group of researchers
and academics.
Speaking at the event, Dr. Mohammed Abdullah Al-Ali, CEO of TRENDS
Research & Advisory, stated that TRENDS’ international offices—set to reach 15
by the end of 2024—aim to enhance the Center’s research efforts and deepen its
role in disseminating knowledge, thus serving as a global knowledge bridge.
He emphasized, “At TRENDS, we believe in the importance of cooperation
between think tanks and prioritize this endeavor. We believe the TRENDS office in
Jakarta will enhance the exchange of knowledge and ideas between think tanks in
Asia and the Middle East, opening new horizons for collaboration in various
fields.”

Four books in Indonesian
As part of the Jakarta office’s inaugural activities, four books were released in
Indonesian, including the 11th and 12th books of the Muslim Brotherhood
Encyclopedia and Global Trends in AI and Automation and the Future of
Competition between Man and Machine: An Analytical Forward-looking Vision.

Hostility to Arab states
The 11th book of the Muslim Brotherhood Encyclopedia, The Concept of the State
According to the Muslim Brotherhood, highlights its hostile stance toward Arab
states since its inception. The group views them as an obstacle to its ascent to
power. It opposed the modern principles upon which these states were built,
considering them incompatible with the group’s unique interpretation of Islam,
which it claimed to embody exclusively.

Exclusion of nonconformists
The 12th book, The Muslim Brotherhood: Rejection of Tolerance and Exclusion of
Nonconformists, examines the Muslim Brotherhood’s stance towards
nonconformists, individuals, and entities. The book reveals the group’s binary view
of the world, categorizing others as allies or adversaries. It ties these relationships
to the Brotherhood’s internal power struggles and self-serving interests.

Global Trends in AI
The third book, Global Trends in AI, explores significant developments in AI and
its impact on various aspects of life, including the economy, society, and
governance. It also offers a comprehensive analysis of technological advancements
in AI, its applications across sectors, the ethical and social challenges it presents,
and its future trajectory.

Automation

The fourth book, Automation and the Future of Competition between Man and
Machine: An Analytical Forward-looking Vision, addresses the growing challenges
faced by the human workforce in the face of widespread automation and AI
applications. The book concludes that while automation presents a significant
challenge to the labor market, it simultaneously creates new opportunities. It
emphasizes the importance of preparing for this shift through skills development,
continuous education, and adopting economic and social policies that support the
workforce.

Prominent pavilion and active presence
The TRENDS’ pavilion at the Indonesia International Book Fair has attracted
numerous visitors, including academic researchers and officials, such as the
ambassadors of the UAE, Bahrain, Qatar, Jordan, and Turkey. Additionally,
chairpersons of Arab and Indonesian publishers’ associations, authors, publishers,
and students visited the pavilion. All were impressed with and praised TRENDS’ diverse, valuable publications. They also commended TRENDS’ active
international presence and ability to address global developments with rigorous
analytical research.
Dr. Mohammed Abdullah Al-Ali honored the esteemed guests, including
ambassadors of the UAE and Bahrain to Indonesia, Wedha Startesti Yudha,
Chairperson of the Indonesia International Book Fair Committee, Arys Hilman
Nugraha, Chairman of the Indonesian Publishers Association, and others,
presenting them with TRENDS’ publications and commemorative shields.
Additionally, he awarded TRENDS’ Research Medal to Ni Made Ayu Martini
Indonesian Deputy Minister of Marketing, Tourism and Creative Economy
It is worth noting that during its current Asian research tour, TRENDS announced
the launch of the TRENDS Research Medal, awarded to individuals who make
significant contributions to the development of scientific research and promote collaboration with TRENDS in strengthening a culture of research across various fields.

World

US determined to prevent full-scale war in Middle East, Joe Biden tells UNGA79

US President Joe Biden highlighted the US Administration’s determination to prevent a wider war that engulfs the entire Middle East region, noting that a diplomatic solution “remains the only path to lasting security to allow the residents from both countries to return to their homes on the border safely”.

In remarks he made today before the 79th Session of the United Nations General Assembly (UNGA79), the US President said, “Full-scale war is not in anyone’s interest,” adding that a diplomatic solution is still possible.

He also touched on “the rise of violence against innocent Palestinians on the West Bank”, and the need to “set the conditions for a better future”, which he said featured “a two-state solution, where the world — where Israel enjoys security and peace and full recognition and normalised relations with all its neighbours, where Palestinians live in security, dignity, and self-determination in a state of their own”.

President Biden underscored the ceasefire and hostage deal put forth by Qatar and Egypt, which the UN Security Council endorsed. He said, “Now is the time for the parties to finalise its terms, bring the hostages home,” adding that this would help ease the suffering in Gaza, and end the war.

-WAM