Kaye Scholer LLP and Eitan-Mehulal Law Group Conference: Israeli Acquisitions and Investments in U.S. Technology, Infrastructure and Defense Industries
As of 2008, the most recent year for which statistics are available, Israel ranked fourth in the number of acquisitions, based on home country, that were subject to review by the Committee of Foreign Investment in the United States (“CFIUS”). This seminar, presented jointly by Eitan-Mehulal Law Group and Kaye Scholer LLP, addressed some of the issues involved in doing business between Israel and the United States.
The first session of the program, “U.S. Regulatory Considerations for Israeli Investments and Acquisitions in U.S. Businesses,” focused on U.S. regulatory considerations for Israeli companies seeking to invest in, or acquire, U.S. businesses that raise U.S. national security considerations. Panelists explained the CFIUS regulations (as well as structures to mitigate U.S. government concerns related to foreign ownership, control or influence) and how these work in the acquisition/investment context, as well as their effect on certainty/timing of such transactions, and the practical implications of these regulations on governance and management of such U.S. target companies. The panel also touched on U.S. export control regulations and the impact on such transactions of U.S. acquired businesses. This discussion was followed by the second session of the program, “Israeli Export Control Limitations and Implications,” a review of the Israeli regulatory issues arising from cross-border ownership, including restrictions on the transfer of “know how” and technology.After a short break, the program continued with a session titled “Significant U.S. and Israeli Tax Issues Relating to Israeli Investment in U.S. Targets.” The panel addressed U.S. tax consequences and corresponding Israeli tax treatment of various structures usually employed to invest in the U.S. from abroad, touching on the taxation of current income and gains from dispositions. This segment addressed both corporations and pass-through entities. The discussion also covered concepts and mechanics relating to the U.S.-Israeli tax treaty and transfer pricing issues that arise in connection with these transactions. The program concluded with a panel discussion wrap-up.