6 relationships across the broader region, I expect some movement that may facilitate the expansion of the Abraham Accords and Israeli connectivity to a number of new markets.” Lee Noyek, A&O Shearman: “First on the list is always the concern over transferring IP out of Israel. That concern has only heightened recently with, for example, Broadcom’s Israeli subsidiary facing a $70m tax demand over such a transfer out of the country. Such cases reinforce the rigorous approach to the transfer of IP, with courts and tax authorities closely examining the valuation, documentation, and economic substance of such transactions. Second is war related economic uncertainty. Whilst core sectors like Tech, Defense and Energy remain robust, the uncertainty created by this forever war make investors pause, especially first-time entrants to the market. Third, Israel is not immune to global trends. With M&A depressed since the beginning of 2022, we waited nearly three years for confidence to return. By the end of 2024, it seemed the market was finally turning the corner, with the US election initially providing the certainty needed to unlock the M&A market, and many expecting a deregulation-driven M&A boom in its wake. However, uncertainty surrounding trade policy—including over tariffs and resulting trade wars—has since had a dampening effect on markets and investor confidence more generally.” Michael Kaplan, Davis Polk: “The key trends will be the continuing military / political situation in Israel – although Israel has been very resilient through the current situation – and how US tariffs will impact Israel.“ Jonathan Morris, BCLP: “Israel is renowned as being a tech-hub so nonIsraeli clients should be continuing to watch closely the local tech scene for potential investment / M&A opportunities.” Adir Waldman, Freshfields: “Cybersecurity remains a key area of interest for both investors and acquirers – an enduring trend we expect to continue. Despite the challenges of operating as an Israeli company over the past three years, the startup ecosystem has proven remarkably resilient.” Which sectors currently present the biggest opportunities or the greatest risks for international investors or companies doing business with Israeli entities?
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