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U.S. Regulatory Climate Attracts Nearly Half Of Israeli Startups For Incorporation

Overview Of A Shifting Landscape

The Israel Advanced Technology Industries Association (IATI) has revealed a striking trend: nearly 45 percent of startups in 2025 are incorporating outside Israel. This marks a significant departure from 2022, when approximately 80 percent of new companies registered domestically. The shift is largely attributed to the relatively easier regulatory environment in the United States, with Delaware emerging as a preferred hub.

Government Policy And Economic Ripple Effects

The tide began to turn in 2023 when an anticipated overhaul of Israel’s judicial system prompted many startups to look abroad. Although the controversial reforms were set aside following the October 7, 2023 attacks and the subsequent conflict, the momentum for U.S. incorporation has persisted. Industry leaders have raised alarms about these trends, warning that the relocation of economic activity abroad could undermine the strong global reputation of Israel’s high-tech sector, which is a critical driver of national economic performance.

Industry Voices And Strategic Concerns

Dan Shamgar, chair of the IATI’s lawyers and accountants committee and partner at the Meitar law firm, emphasized, “Incorporation abroad gradually shifts economic activity out of Israel and erodes the brand of Israeli high-tech.” Shamgar highlighted that while U.S. policies in the past year have actively encouraged companies to register and operate domestically, economic policymakers in Israel have yet to implement comparable incentives. The absence of robust governmental support raises questions about maintaining the nation’s competitive edge in high technology, which encompasses roughly 20 percent of the country’s economic activity, 15 percent of its jobs, and more than half of its exports.

Challenges And The Road Ahead

Further concerns at the IATI conference include the sector’s reliance on foreign capital, with domestic investment lagging behind, and the critical need for renewed focus on health technology—a market segment that has recently experienced a downturn. These issues underscore the imperative for state intervention to ensure that Israeli high-tech companies continue to thrive on home soil.

Conclusion

The current trend of startups incorporating in the United States is symptomatic of broader regulatory and economic challenges facing the Israeli high-tech industry. As global competition intensifies, the call for policy reforms and strategic incentives in Israel becomes ever more urgent. How the government responds in the coming months will be pivotal for preserving the nation’s high-tech legacy and securing the future of its economic ecosystem.

Cyprus President Champions Domestic Defence Industry For National Security And Economic Growth

Government Commitment To Strengthen National Defence

The President of the Republic, Nikos Christodoulidis, reaffirmed the government’s intention to enhance the country’s deterrence capabilities while expanding the potential of the domestic defense industry. Speaking during a high-level meeting at the Presidential Palace with members of the Cyprus Defence Industry Council, he outlined a strategy that connects national security priorities with long-term economic development.

Performance Assessment And Strategic Objectives

In the presence of Defence Minister Vasilis Palmas, the meeting focused on evaluating the achievements of the council one year following its establishment and delineating the path ahead. The President recalled, “Last year, we decided to institutionalize the Cyprus Defence Industry Council. Today, we review our targets and assess what has been achieved and what remains pending. We discussed the need for a registry of Cypriot companies. It is crucial to amplify the international presence of our enterprises. I remain deeply confident in your capabilities,” emphasizing a performance-driven approach aimed at enhanced operational transparency and market expansion.

Positioning The Industry As A New Economic Pillar

President Christodoulidis expressed his firm belief that the Cypriot defence industry could emerge as a significant economic driver. He described it as a “promising new pillar” for the nation’s economy, bolstered by European initiatives such as the SAFE framework, supplementary equipment procurement plans from third countries, and participation in international trade exhibitions. Such strategies, he noted, open up further opportunities for local businesses to integrate into the global arms market.

International Outreach And Future Economic Impact

The President also pledged active support at an international level, citing his positive response to an invitation to Athens to engage in initiatives aimed at enhanced exposure and collaboration. He was confident that the industry’s contribution could realistically reach a double-digit share of Cyprus’ GDP in the coming years, a target he described as not only ambitious but entirely attainable given current capabilities.

Clear Vision For Measurable Progress

Concluding the meeting, President Christodoulidis reaffirmed his commitment: “I am fully aware of your potential. This is an emerging sector critical to both our economic future and our national security. Today, I expect us to review our concrete achievements, address the areas requiring improvement, and steer this initiative toward even greater success.” This decisive call for accountability and action underscores a broader strategic agenda that intertwines national defence imperatives with forward-looking industrial and economic policies.

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