Holland & Knight - Israel Practice Newsletter: Summer 2019 by Holland & Knight

ISRAEL PRACTICE NEWSLETTER TABLE OF CONTENTS

SUMMER 2019

Introduction..................................................................................................................................................................... 2 Words to the Wise for Israeli Investors: Foreign Investment in the United States in the Wake of FIRRMA.......................... 2 Live, Work, Stay: Considerations for Coworking in Hotels................................................................................................ 3 Pre-Immigration Tax Planning is Critical for Foreigners Moving to the United States......................................................... 3 The Politicians Couldnâ&#x20AC;&#x2122;t Form a Coalition, the Hi-Tech Sector Actually Did....................................................................... 4 Is the New IRS Expatriation Initiative Really Better Than an Existing Program and Law?................................................... 4

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ISRAEL PRACTICE

NEWSLETTER Holland & Knight is a U.S.-based global law firm with a strong commitment to the state of Israel. We focus on providing guidance to Israeli investors and companies interested in doing business in the United States and Latin America. With more than 1,300 professionals in 28 offices, our lawyers and professionals are highly experienced in all the interdisciplinary areas necessary to guide entrepreneurs, investors, and startup or established companies through the opportunities and challenges that arise throughout the business or investment life cycles. Areas of legal guidance that are typically provided to our Israel Practice clients include real estate, mergers and acquisitions, private equity, international tax, cross border and customs, Internet privacy and cybersecurity, intellectual property, government lobbying, regulations and compliance, U.S. Foreign Corrupt Practices Act (FCPA), U.S. Foreign Account Tax Compliance Act (FATCA), and litigation and dispute resolution. We invite you to read our Israel Practice newsletter, in which our authors discuss pertinent American-Israeli topics. As Israel has been a crossroads and a prolific source of new ideas for more than 3,000 years, a natural tradition of inventiveness finds its most recent expression in the creation of a technology startup ecosystem with global impact. This newsletter addresses, among other relevant topics, how the innovative technologies and ideas generated in Israel can be deployed in the United States and globally. We invite you to discuss your thoughts on this issue with our authors listed within the document.

Words to the Wise for Israeli Investors: Foreign Investment in the United States in the Wake of FIRRMA By Seth M.M. Stodder and James H. Cottrell Jr. In 2018, the U.S. Congress enacted the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA), a law that substantially expands the reach of the Committee on Foreign Investment in the United States (CFIUS). CFIUS is the U.S. Department of the Treasury-led interagency committee that advises the president on the national security implications of foreign investments in the U.S. economy. While FIRRMA is not yet fully in effect, as the Treasury Department is still working on regulations that will implement the law and that likely will not become final until February 2020, it is very clear that FIRRMA means that far more transactions will now likely be subject to CFIUS review. As Israeli investors consider investments in the United States, the question of whether a proposed transaction presents a CFIUS issue must now be an early action item on the due diligence checklist. Read full article >>

Live, Work, Stay: Considerations for Coworking in Hotels By Herman R. Lipkis and Joseph Guay Coworking has grown from an innovative use of traditional office space into a must-have amenity at many leading hotels. Israeli hoteliers interested in getting into the American hospitality market should evaluate the many business and legal considerations involved with transforming existing underused space into a coworking environment for hotel guests and the general public. This article explores the risks and benefits involved with coworking in hotels for new and existing hotel owners, managers and developers. The coworking concept, already revolutionizing the way commercial office landlords design and market their properties, has begun spreading to other businesses. With the demand for coworking facilities projected to reach 3.8 million people next year, hoteliers are recognizing the importance of transforming their lobbies, business centers and meeting facilities into additional revenue generators. Read full article >> Reprinted with permission by Hotel Management

Pre-Immigration Tax Planning is Critical for Foreigners Moving to the United States By Seth J. Entin The United States is an attractive destination for foreign persons moving away from their home countries. The instability in some Latin American countries is just one reason why the United States is seeing a rise in the number of high-net-worth foreigners establishing U.S. residency. Florida in particular is an attractive destination for highnet-worth individuals. Among other things, Florida does not impose state or local income tax on individuals. This is in contrast to many other states. For example, New York imposes an income tax on individuals at rates of up to almost 9 percent, New York City imposes an additional income tax on individuals at rates of up to almost 4 percent, and California imposes an income tax on individuals at rates of up to 13.3 percent. And, under new U.S. federal income tax laws, the ability of an individual to deduct state and local income taxes against his or her federal income tax is extremely limited. Read full article >>

The Politicians Couldn’t Form a Coalition, the Hi-Tech Sector Actually Did By Meital Stavinsky Come September, Israeli citizens will be called to cast their votes yet again after a failure to form a new government followed April’s elections. Whether ideological disputes led to the dissolving of the 21st Knesset or not, at the end of the day, the upcoming elections are due to the failure to reach the required agreements in order to form a political coalition. Contrary to popular belief, the need to form a coalition does not exist only in the political world. This is in fact a broad social phenomenon. This is especially true in Israel, which was founded on Jewish values based on mutual responsibility, cooperation and community; a society in which family values are held in high esteem. Building “coalitions” lies at the very root of the State of Israel. Read full article >> Reprinted with permission from The Jerusalem Post

Is the New IRS Expatriation Initiative Really Better Than an Existing Program and Law? By Kevin E. Packman Even after making Aliyah, American citizens and residents (i.e., green card holders) remain obligated to file US income tax returns reporting their worldwide income and to pay tax on such income. In addition to filing income tax returns, there are many other information forms that American olim must file to report their connection to foreign assets. These forms, such as the Foreign Bank Account Report (FBAR), all have substantial monetary penalties when not filed timely or correctly. These annual filing obligations remain unless and until the American olim formally renounces his or her U.S. citizenship. However, expatriating can generate a substantial exit tax. There are many U.S. citizens who reside abroad that have failed to comply with these rules. In an effort to relieve the financial difficulties associated with complying with U.S. tax rules and expatriation costs, the Internal Revenue Service (IRS) released on Sept. 6, 2019, Relief Procedures for Certain Former Citizens (Expat Relief). The Expat Relief permits eligible taxpayers to cure their tax failures and to expatriate without paying any U.S. tax or penalties. Read full article >> 4

A Strong Commitment to the State of Israel Holland & Knight is a U.S.-based global law firm with a strong commitment to the state of Israel. We focus on providing guidance to Israeli investors and companies interested in doing business in the United States and Latin America. With more than 1,300 professionals in 28 offices, the lawyers and professionals in our Israel Practice are highly experienced in all of the interdisciplinary areas necessary to guide an entrepreneurial or an established company through the opportunities and challenges that arise throughout the company’s life cycle. Areas of legal guidance that are typically provided to our Israel Practice clients include real estate, mergers and acquisitions, private equity, international tax, cross border and customs, internet privacy and cybersecurity, intellectual property, government lobbying, regulations and compliance, reimbursement, U.S. Foreign Corrupt Practices Act (FCPA), U.S. Foreign Account Tax Compliance Act (FATCA), and litigation and dispute resolution. Among our Israeli clients are leading innovative technology companies in a wide range of industries, including information technology, advanced transportation, agtech, cleantech, healthcare and life sciences, medical devices and cybersecurity. Our Israeli real estate clients are leading commercial and residential developers and investors, and Holland & Knight’s venture capital and private equity attorneys advise both Israeli funds and U.S. funds investing in Israeli companies. A core value of Holland & Knight is our dedication to delivering the highest quality of legal services and providing responsive and cost-effective counsel to every client. This core value of the firm – coupled with our business acumen, legal experience and solid commitment to the Israeli marketplace – enables us to successfully assist our Israeli clients operating in the United States, as well as companies and investors doing business in Israel. The members of our team have client and business meetings in Israel on a regular basis and would be delighted to arrange for a meeting in person. Please do not hesitate to reach out to us with any questions, as we look forward to helping you excel and achieve your business goals in the U.S. and Latin America.

‫מחויבות עמוקה למדינת ישראל‬ ‫ אנו מתמקדים במתן שירותי יעוץ למשקיעים וחברות ישראליות‬.‫ הינה פירמת עורכי דין אמריקאית גלובלית בעלת מחויבות עמוקה לשוק הישראלי‬Holland & Knight ‫ עורכי דין ואנשי מקצוע‬1,250-‫ מעסיקה למעלה מ‬Holland & Knight ‫ פירמת עורכי הדין‬.‫המעוניינים להרחיב פעילות או להשקיע בארצות הברית ובאמריקה הלטינית‬ ‫ ומספקים מגוון‬,‫ הפוליטיקה והסביבה החברתית בישראל‬,‫ הינם בעלי הבנה עמוקה של הכלכלה‬Holland & Knight ‫ חברי הפרקטיקה הישראלית של‬.‫ משרדים‬27-‫ב‬ ‫ לחברי הפרקטיקה הישראלית שלנו ניסיון רב בכל תחומי המשפט‬.‫רחב של שירותים משפטיים ללקוחות ישראלים שפועלים בחו"ל ולחברות ומשקיעים הפועלים בישראל‬ .‫ חברות הזנק וחברות מבוססות בכל שלבי ותהליכי הצמיחה וההתפתחות של החברה‬,‫ משקיעים‬,‫הנחוצים כדי להנחות יזמים‬ ‫ פרטיות ואבטחת‬,‫ מסחר בינלאומי ומכסים‬,‫ מיסוי בינלאומי‬,‫ קרנות השקעה‬,‫ מיזוגים ורכישות‬,‫ נדל"ן‬,‫התחומים בהם אנו מייעצים ללקוחותינו הישראלים כוללים בין היתר‬ .‫ סיוע ביישוב סכסוכים עסקיים וליטיגציה‬,FATCA -‫ ו‬FCPA ‫ לרבות‬,‫ ייעוץ לוביסטי ורגולטורי‬,‫ קניין רוחני‬,‫מידע‬ ,‫ מים‬,‫ סביבה‬,‫ חקלאות‬,‫ תחבורה חכמה‬,‫ לרבות בתחומי טכנולוגיות מידע ותקשורות‬,‫בין לקוחותינו הישראלים נמנות חברות מובילות בתחומי החדשנות הטכנולוגית‬ .‫ עם לקוחות הנדל"ן שלנו נמנים משקיעים וחברות מובילות העוסקים הן בנכסים לשימוש מסחרי והן בנכסי נדל"ן למגורים‬.‫ ציוד רפואי ואבטחת מידע‬,‫ מדעי החיים‬,‫אנרגייה‬ .‫עם לקוחותינו בתחומי ההון סיכון וקרנות השקעה נמנות קרנות ישראליות וקרנות זרות המשקיעות בישראל‬ ‫ ערך‬.‫ הוא מחויבותנו להעניק שירותים משפטיים באיכות הגבוהה ביותר ולספק יעוץ אישי המותאם לצרכיו של כל לקוח ולקוח‬Holland & Knight ‫ערך מרכזי של‬ ‫ מאפשרים לנו לסייע בהצלחה ללקוחותינו הישראלים הפועלים בארצות‬- ‫ הניסיון המשפטי ומחויבותנו האיתנה לשוק הישראלי‬,‫מרכזי זה בשילוב האינטיליגציה העסקית‬ ‫ נפגשים עם לקוחות בישראל באופן קבוע‬,‫ שחלקם דוברי עברית‬,‫ חברי הפרקטיקה הישראלית שלנו‬.‫ ולחברות ומשקיעים הפועלים בישראל‬,‫הברית ובאמריקה הלטינית‬ .‫וישמחו לתאם פגישות עם חברות ויזמים המעוניינות ללמוד על הדרכים בהן נוכל לסייע להצלחת מיזמים עסקיים בארצות הברית ובאמריקה הלטינית‬

For inquiries regarding this newsletter, you may contact: Ronald J. Klein Co-Chair, Israel Practice Fort Lauderdale +1.954.468.7874

Meital Stavinsky Co-Chair, Israel Practice Miami +1.305.789.7710

Washington, D.C. +1.202.469.5152 ron.klein@hklaw.com

Washington, D.C. +1.202.828.5004 meital.stavinsky@hklaw.com 5

Media Mentions Traffic Congestion and Parking Challenges: Innovation, Policy and Regulation, The Times of Israel, Meital Stavinsky, September 1, 2019 The Politicians Couldn’t Form a Coalition, the High-Tech Sector Actually Did, Globes, Meital Stavinsky, August 11, 2019 National Bioengineered Food Disclosure: What Israeli Companies Need to Know, The Times of Israel, Meital Stavinsky, July 18, 2019 Israeli Start-ups Will Benefit From the New FDA Policy, People and Computers, Meital Stavinsky, July 11, 2019 The Untapped Funding Opportunities of the Israeli High Tech Industry, Ctech by Calcalist, Meital Stavinsky, July 4, 2019 Cosmetics in the U.S.: What Israeli Companies Need to Know, The Times of Israel, Meital Stavinsky, June 23, 2019 Israel Can Not Compete With “Cannabis Manufacturers in the U.S.”, Calcalist, Meital Stavinsky, June 17, 2019 She Came to Visit the Tiger Den: Attorney Meital Stavinsky, Holland & Knight, People and Computers, Meital Stavinsky, June 13, 2019 The Jewish Leaders Around the Table at Today’s Senate Dems Meeting, Jewish Insider, Ron Klein, June 5, 2019