Wix says it’s staying. “We’ll stay here and fight for what’s right,” Nir Zohar, co-founder and chief operations officer, told WIRED in an interview in May. The company confirmed in July that was still its position. In October, Wix moved into a new Tel Aviv campus. The company’s headquarters, as well as the vast majority of its employees, are still based in Israel.
The politics that are pushing other companies to move their headquarters overseas are doing “massive damage” to Israel, Zohar says. “If this continues as a trend, we’re basically trading away the future of our industry,” he says. “Eventually these companies are going to drive revenues that’s going to be counted in the US GDP, not in the Israeli GDP.”
The judicial reform has introduced uncertainty not just for business but also for people who want to live a liberal life in Israel, he adds. “[That’s] scary and it has a massive impact on the kind of talent that at the end of the day populates the tech industry.” This week, Wix employees joined a general strike to protest the outcome of Monday’s vote.
Wix’s position is increasingly rare, especially among startups. . More than 50 percent of new companies established in March 2023—the same month the bill advanced through Israel’s parliament the Knesset—were incorporated as foreign companies, rather than Israeli ones, according to a May report by the Israel Innovation Authority.
Tech is responsible for more than half of all exports, and the country collects 50 billion shekels ($13.5 billion) a year from the sector.
Wiz is among those distancing itself from its home country. Israeli companies have long operated with one foot in Israel, and the other in bigger markets like the US, where they can get more access to funding and customers. Wiz’s cybersecurity business has always technically been US-based but the company is deeply ingrained in the Israeli tech ecosystem, says Yinon Costica, co-founder and VP of product.
But Wiz withdrew tens of millions of dollars from Israel in February, according to Reuters, and when the company raised $300 million that same month, its CEO said that none of the cash would be invested in Israel. “Given the uncertainty about the independence of institutions in Israel and following an acute risk assessment of the situation, we will keep funds in US banks,” the company’s cofounder, Assaf Rappaport, told the Times of Israel.
Some founders have been very outspoken in their criticism of the bill and the Netanyahu government. When Eynat Guez, CEO of the payroll business Papaya Global, launched the business back in 2016, she was proud to be a cofounder of an Israeli incorporated company. Would she make the same decision today? “100 percent no,” Guez says. “If I had the ability to change this decision, I would do that.”
In an open letter sent to investors on Monday, Guez wrote that Israel had been “hijacked by a group of fanatics” and that Netanyahu was willing to “sacrifice Israeli democracy” to secure his own political survival. “Following this political overhaul, Israeli entrepreneurs will set up entities abroad,” she added in the letter. “It’s simply too risky to expose investors to a shady judicial system, with no real oversight, in which they have no protection and no legal remedy.”
