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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.

Electric Vehicle Leaders Urge EU To Maintain 2035 Zero Emission Mandate

Industry Voices Emphasize the Importance of Commitment

Over 150 key figures from Europe’s electric car sector, including executives from Volvo Cars and Polestar, have signed a letter urging the European Union to adhere to its ambitious 2035 zero emission goal for cars and vans. These industry leaders warn that any deviation could hamper the progress of Europe’s burgeoning EV market, inadvertently strengthen global competitors, and weaken investor confidence.

Evolving Perspectives Within the Automotive Community

This call comes in the wake of a contrasting appeal issued at the end of August by heads of European automobile manufacturers’ and automotive suppliers’ associations. That letter, endorsed by the CEO of Mercedes-Benz, Ola Kaellenius, argued that a 100 percent emission reduction target may no longer be practical for cars by 2035.

Discussion With EU Leadership on The Horizon

European Commission President Ursula von der Leyen is scheduled to meet with automotive industry leaders on September 12 to deliberate the future of the sector. Facing stiff challenges such as the rise of Chinese competition and the implications of US tariffs, the stakes for the EU’s policy decisions have never been higher.

Potential Risks of Eroding Ambitious Targets

Industry leaders like Michael Lohscheller, CEO of Polestar, caution that any weakening of the targets could undermine climate objectives and compromise Europe’s competitive edge in the global market. Michiel Langzaal, chief executive of EU charging provider Fastned, further highlighted that investments in charging infrastructure and software development are predicated on the certainty of these targets.

Regulatory Compliance And The Mercedes-Benz Exception

A report from transport research and campaign group T&E indicates that nearly all European carmakers, with the exception of Mercedes-Benz, are positioned to meet CO₂ regulation requirements for the 2025-2027 period. To avoid potential penalties, Mercedes must now explore cooperation with partners such as Volvo Cars and Polestar.

Conclusion

The industry’s unified stance underscores the critical balance between environmental aspirations and maintaining competitive advantage. With high-level discussions imminent, the EU’s forthcoming decisions will be pivotal in shaping not only the future of the continent’s automotive sector but also its global positioning in the race towards sustainable mobility.

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