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Acquiring an Israeli Company – Becoming an Israeli Employer

Israel has become an attractive destination for businesses, whether opening operations in Israel or acquiring existing operations. The Israeli market includes cutting-edge research and development and access to some of the leading talents in a range of industries. Many international entities have development centers in Israel (among the many are Intel, Microsoft, Google and SONY). Israel is known for its innovative start-ups that had phenomenal success over the years (such as Waze, Mobileye, and many others). Due to many Israeli talents and local workforce achievements, it was named, over the years, the “Start-up Nation”. In light of the workforce’s major influence on the achievements, it is vital to get familiar with Israeli labor market and Israeli labor laws.

 

According to Israeli labor laws, wage, hour laws, annual leave, pension and a range of benefits should be very clear and agreed, and should be at least according to the minimum required by law. In addition to the legislation, court decisions are also very developed in Israel and constitute part of the law. Israel’s specialized labor courts are handing down decisions and rulings on all aspects of labor and employment, which provide interpretation of the law.   

 

The act of entering the Israeli labor market raises legal issues from a labor and employment perspective. For companies looking to acquire existing Israeli companies or operations, conducting proper due diligence on this front can support a smooth and structured transition into the Israeli market. It is important to ensure that the acquiring company is fully aware of and prepared for all current and future labor and employment costs and culture embedded in the company being acquired.

 

The task of moving employees out of the old and into the new presents yet another set of legal preparations. Purchasers should determine how they would bring their new employees over by maintaining employment continuity or ending employment relations in the workplace with the previous employer and hiring them anew. Both methods are optional and often used, and each has its own advantages. Choosing the most cost-effective and legally sound method under the circumstances can assist with employees’ successful transfer.

 

The Israeli labor market includes many new interesting opportunities based on solid legal grounds. A clear business decision followed by a structured study and understanding of the local laws and workforce would help acquire companies plan their transition to Israel.

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