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Tech workers march in Tel Aviv to protest against the government's planned overhaul of the judicial system

Almost 70% of Israeli Startups Act to Shift Funds, Relocate due to Judicial Shakeup

Almost 70 percent of Israeli startups are taking active steps to pull money and shift parts of their businesses outside the country due to the uncertainty created around the proposed judicial overhaul, according to a survey by Start-Up Nation Central, which tracks the local tech ecosystem.

The findings of the survey showed that 68% of Israeli startups have started to take “legal and financial steps,” including the withdrawal of cash reserves, moving their headquarters outside of Israel, relocating employees, and conducting layoffs.

Overall, 78% of the surveyed startup executives reported that the government’s controversial plan to weaken the country’s judicial system is “negatively” impacting their operations, and 84% of venture capital investors said it has a negative influence on their portfolio companies.

Meanwhile, Israel’s sovereign credit rating on Tuesday, July 25, was lowered by credit rating agency Morgan Stanley, and Moody's warned of a "significant risk" that political and social tensions will lead to "negative consequences for Israel's economy and security situation."

The tech ecosystem is a key engine of growth for Israel’s economy, as it generates about 16% of GDP and over 50% of exports, and contributes more than 25% of the total income tax collected by the government. (TOI / VFI News)

“See, I set before you today life and prosperity, death and destruction. For I command you today to love the LORD your God, to walk in obedience to him, and to keep his commands, decrees and laws; then you will live and increase, and the LORD your God will bless you in the land you are entering to possess.” - Deuteronomy 30:15-16