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IBM. Microsoft. Google. Intel. Samsung. Facebook. Some of the biggest names in technology have collectively invested billions of dollars in Israel-based companies – and the reasons are simple. Find out why now is the time to explore Canadian-Israeli business investments.
Why invest in an Israeli business?
Israel is a globally recognized high-tech hub, supported by a higher number of scientists, technicians and engineers per capita than anywhere else in the world.
It is an immigrant country, with people from various cultures and with different perspectives, living together in a nation that emphasizes the importance of education, which makes it an excellent breeding ground for new ideas. And with virtually no natural resources except the mind, Israel, by necessity, has leveraged the mind better than any country in the world today across multiple industries – from technology and health care to biopharmaceuticals, telecommunications, and education services.
Israel’s strong military presence is also key. It is a nation that requires innovative intelligence, technology and security capabilities for its military forces, many of whose members go on to develop their own ideas and products in these sectors after their military service.
Lastly, Israel is a country that is internationally focused. With a population of just over eight million people, most Israeli entrepreneurs think globally from the start, broadening their market well beyond their borders to achieve the success and economic returns they – and potential investors – are looking for.
The start-up success stories of Israeli Businesses in the last five to ten years have been astounding, including Waze, Trusteer, Wix, and Evogene, each of which exited or went public in 2013 (Waze was purchased by Google, Trusteer by IBM – for about $1 billion each).
Why invest in Canada?
Israeli companies, in turn, are noticing Canada as an optimal location for investment, listing on a global exchange, or establishing operations for a number of reasons. In recent years, the Canadian government has taken a pro-Israel stance, and Canada’s prime minister, Stephen Harper, has been quite outspoken in the media, supporting Israel’s right to defend itself, which is appreciated and applauded by Israelis.
Then, there is the recognition in Israel that Canada represents a sizeable market, with a stable economy that has continued to grow right through the last number of years of recession at a better rate than the US or European markets.
Canada also has a more relaxed regulatory environment governing Canadian stock exchanges, which, unlike the US, do not operate under Sarbanes-Oxley compliance obligations – and it has drastically lower corporate tax rates, which can have a substantial impact on a company’s net profit after taxes.
Companies setting up a North American presence in Ontario, for example, find themselves not only with a direct route to the Canadian market, but in close proximity and with easy access to the large US market – all the while taking advantage of Canada’s more favourable tax regime.
As well, Toronto’s TSX stock exchange is a good alternative to the US public markets. It is Canada’s premier exchange, geographically close to New York and Chicago, and second in the world for listed issuers.
The Zeifmans – Israel Connection
Zeifmans has a long history of advising Israeli companies, investors and entrepreneurs who are going public or expanding their businesses into Canada. We also work with Canadian companies looking to enter the Israeli market, or invest in, fund or partner with start-ups in Israel.
We understand the Canadian and Israeli markets, tax and regulatory regimes, audit rules, and Canadian-Israeli business cultures. We have partners who frequently travel between both countries, are fluent in Hebrew, and have long-standing relationships with the business communities in Canada and Israel. And we enjoy a very close working relationship with our Nexia Tel Aviv affiliate Strauss Lazer and Co., one of Israel’s leading accounting firms.
These personal, cultural and commercial interests in Canada and Israel allow us to provide seamless accounting, tax, audit, corporate finance, and consulting services to Canadian and Israeli clients looking to leverage the growing opportunities for Canada/Israel trade and commerce.
To find out more about investing in Israel or Canada, contact Laurence Zeifman at 416.256.4000, ext. 7707 or LWZ@Zeifmans.ca or your Zeifmans advisor.
