A 2025 survey by the Israel Advanced Technology Industries Association (IATI), an umbrella group for the high-tech sector, found that nearly half of Israeli founders are choosing to incorporate outside of the country.
That marks a sharp reversal from 2022, when 80% of new startups incorporated in Israel and only about 20% chose foreign jurisdictions.
The shift reflects both political uncertainty at home and the appeal of U.S. regulatory frameworks. Delaware, with its favorable incorporation laws and investor-friendly legal environment, has become a particularly popular choice.
The trend began in 2023 after the Israeli government advanced a controversial plan to curb the Supreme Court’s powers and increase political control over judicial appointments.
The proposal sparked widespread protests, rattled investors, and raised concerns about the rule of law.
While the plan was shelved following the October 7, 2023 attacks by Hamas militants and the ensuing war in Gaza, the momentum toward U.S. incorporation has continued. Not everyone in the ecosystem welcomes the shift.
“Incorporation abroad gradually shifts economic activity out of Israel and erodes the brand of Israeli high-tech,” said Dan Shamgar, chairman of IATI’s lawyers and accountants committee, speaking Tuesday at an industry conference in Tel Aviv.
Among U.S. hubs attracting Israeli startups, New York City has emerged as the leading destination. For founders, the city offers access to investors, customers, and talent, along with proximity to Wall Street and U.S. public markets.
A new report from 97212 Ventures, a $20 million VC firm backing Israeli startups, shows that NYC is now home to 560 privately held Israeli-founded startups — up from 450 last year.
“We are seeing dramatic growth of Israeli founders moving to the Big Apple,” said Eyal Bino, founder of 97212 Ventures, in an interview with The Times of Israel.
“Founders who raise their first funding are moving to New York quicker than ever before to build a U.S. base, typically six to 12 months after recruiting an R&D team in Israel.”
The report also found that about 30% of Israeli-founded businesses setting up in New York are early-stage startups.
Around 60 operate in cybersecurity, while others are focused on artificial intelligence, fintech, enterprise software, and financial services.
Out of the 560 companies, 27 are unicorns valued at more than $1 billion — up from just five in 2019. California still leads with 35 Israeli-founded unicorns.
“If before, the number one destination for Israeli startups, especially for cyber companies, was Silicon Valley, there’s no question anymore about why many choose New York versus the Valley,” Bino said.
“The time difference, the Israeli community of entrepreneurs, vast access to capital and customers, and a thriving ecosystem all make New York the obvious choice.”
Despite the ongoing war, Israeli tech startups raised $9.3 billion in 365 funding rounds during the first half of 2025 — a 54% increase from the $6 billion secured in the second half of 2024.
It was the sector’s strongest half-year in three years, with foreign investor participation rising from 61% to 69%.
