7 “Israel and Germany have strong economic ties, especially in the high-tech sector. While the war has caused some German investors to view Israel with greater restraint, we expect that investments in Israel, especially in the hightech sector, will stabilize quickly,” said partner Dr. Nina Cohen, head of the Israel Desk at FPS, a leading independent commercial law firms in Germany. Ron Abelski, partner and head of the German desk at Israel law firm, Epstein Rosenblum Maoz (“ERM”) agrees: “In the initial weeks following October 7th, German investors, like their foreign counterparts, exercised caution regarding ongoing transactions in Israel. “We received ‘pens down’ instructions on two deals we were actively pursuing prior to the onset of the conflict. However, amidst this temporary pause in commercial activities, what stood out was the unwavering bond between German investors and the Israeli entrepreneurs they partnered with. Despite the challenges, collaboration persisted, with solidarity despite uncertainty. Witnessing the continued support from German investors during such tumultuous times was truly inspiring. Moreover, these trying circumstances fostered stronger ties and a deeper understanding between investors and entrepreneurs. Entrepreneurs being called up for reserve duty underscored the unique challenges faced by Israeli businesses, further strengthening the bond between partners. Now, we are observing a gradual return to “business as usual” and German companies continue to display keen interest in Israeli technologies. Particularly amid funding shortages, the market presents opportunities for investment and potential acquisitions at more favorable valuations than previously seen.” Andrea Schlote, Munich-based Counsel in the Venture Capital team at Bird & Bird agrees: “One might think that investors are unsettled by the war and that investment is declining as a result. However, experts assume that there will be no change in the long term, especially with the largest investors, such as SAP, VW and Siemens. We expect German companies to invest primarily in high-tech, cybersecurity and defence tech start-ups which would be related to the tax breaks that will apply to 2026. The tax concessions are granted if it is proven that the company is research and Unwavering bond and a gradual return to business as usual
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