MEA Q2 2018 Boecker

MEAMARKETS / Q2 2018 21 Technological innovation in Israel g arrangements in merger and acquisition (M&A) transactions - i.e., in which a founder or key employee holding shares in the target company will only receive a portion of the compensation for selling such shares if he or she remains employed by the target company or the acquirer following the closing of the transaction. In another circular, the ITA clarified provisions related to shares subject to “reverse vesting” mechanisms – i.e., in which a shareholder is required to forfeit a portion of his or her shares if he or she ceases to be employed by the company. These circulars helped to provide a level of certainty to buyers and shareholders of Israeli companies as well as to potential investors in the market. In general, the Israeli economy operates autonomously and has not suffered from the world economic dips, such as those of 2008-2009. There remains a strong culture among Israelis of discovery and invention, with Israel being a major hub for start-ups and technological developments. This culture of innovation, along with M&A exits occurring on an ongoing basis, has generated considerable revenue for the local economy. After picking up to 4% in 2016, growth is projected to stabilize around 3.25% in 2017-2018. Finally, as a consequence of the foreign investment in Israel, the shekel has remained a strong currency when measured against all the leading world currencies. Even with the regional geopolitical challenges, the Israeli economy has been identified as one of the healthiest and most stable in the world, and this is expected to continue in 2018 as strong developments seen in recent years continue to advance. In the promising field of autonomous vehicles, companies will continue to grow and there are likely to be more acquisitions in the field. In addition, Israeli companies will begin listing on foreign stock exchanges (Canada, Australia and Hong Kong) with more frequency – such as the recent first IPO of an Israeli company on the Hong Kong Stock Exchange. Furthermore, the strong M&A activity in Israel, especially in the high-tech field, will remain robust and will continue to draw in major global companies, as well as foreign investors –especially from China – that will continue to explore what this great start-up nation has to offer.