February Edition 2023

February Edition 2023 IsraelDesks Presented by In Partnership with

As the world confronts the ongoing war in Ukraine, the contribution of food production towards greenhouse gas emissions, and the logistical challenges that have persisted since the outbreak of Covid, we take a deep dive into the Foodtech and AgTech landscape. In the latest edition of IsraelDesks magazine, a range of domestic and international law firms talk to us on the current trends, deals, investments and key players in the field - considered a top priority for many. From alternative protein to disrupting the traditional dairy industry, Israel is considered a pioneer, but where do we go from here? In a separate feature, we also learn from Lipa Meir & Co. about key cybersecurity issues and trends in the health sector. Much has been written about Israel’s growing trade with the Gulf States following the signing of the Abraham Accords in 2020, but next door, Cyprus has been moving along steadily for some time.We catch up with AGP Law Firm, and Elias Christou Legal Services to shine a light on our close neighbor. In a market where there are more lawyers per capita than anywhere else on Earth, it is not surprising there has been a spate of law firm mergers in Israel, but none more so than recently.We speak to Dr. Ayal Shenhav about the merger between Goldfarb Seligman and his firm, Gross, which together have become the largest law firm in Israel. We ask where is this trend headed. Meanwhile, a decade has passed since Israeli legislation allowed foreign law firms to open in israel. We take a look at how and why this has expanded dramatically ever since. Lee Saunders, Editor IsraelDesks

Jurisdiction Focus » Cyprus Fireside Chat Recent Market Trends » Law firm merger mania in Israel » A growing interest in Israel - 2023 Israel Business Development » Israel High-Tech Activity Report » Expert Insights - Key trends for 2023 » Cybersecurity in the Health Sector – The Way Forward Industry Focus » Foodtech becomes a higher priority With increased support, the Israeli Foodtech and AgTech landscape confidently takes center stage. 24 30 34 36 48 Table of Contents 04 18 24

Industry Focus Foodtech becomes a higher priority

5 With increased support, the Israeli Foodtech and AgTech landscape confidently takes center stage. Foodtech is expected to be among Israel’s top economic priorities earmarked for more funding over the next five years, according to the Government, and the reasons aren’t hard to see why. The threat to food supplies from the ongoing war in Ukraine, the nagging logistical challenges since the outbreak of COVID-19, and the huge contribution of food production towards greenhouse gas emissions has added to the sense of urgency. “These sectors are very lucrative, and they only grow in scope and volume,” says Roy Caner, partner and head of Hi-Tech at Erdinast, Ben Nathan, Toledano & Co., With Hamburger Evron (EBN). He adds: “These areas are considered ‘green’, doing good for the environment and, in addition to a potential great return, also provide a reputational enhancement for the investment portfolio. As the world population increases, and food supply and the effects on the environment become ever more pressing issues, the demand for affordable and economic solutions only increases.” A G R I - T E C H Novel Farming Systems Ag Biotechnology Animal Ag C L I M A T E T E C H Precision Ag Robotics & Farm Equipment Supply Chain Optimization About Start-Up Nation Central Start-Up Nation Central is a non-profit organization that connects Israeli innovation to the world in order to help international entities solve global challenges. Immersed in the Israeli technology ecosystem, we provide a platform that nurtures business growth, recommends policies, and generates partnerships with corporations, governments, investors, and NGOs to strengthen Israel’s economy and society. For more information, visit: startupnationcentral.org Ministry of Economy and Industry About GrowingIL GrowingIL is a dynamic and growing community in the Israeli Agtech sector, comprised of over 300 startups and 5,500 community members. By connecting the different parties in the Agtech ecosystem, GrowingIL accelerates the development and adoption of new technology to help shape the future of agriculture. GrowingIL is a government initiative of the Ministry of Economy, the Ministry of Agriculture, the Israel Innovation Authority, and the Israel Innovation Institute. For more information, visit: www.growingil.org Start-Up Nation Finder is a comprehensive knowledge hub on Israeli startups, investors, acceleration hubs, multinational corporations, and technology-based innovation associated with academic research. For more information, visit: finder.startupnationcentral.org THESE STARTUPS ARE A SAMPLE OF MORE THAN 300 COMPANIES GROWING SOLUTIONS TO FEED THE GLOBE ISRAELI AGTECH MAP 2023

6 Foodtech spans multiple fields, among them nutrition, packaging, food safety, processing systems, cultured meat, alternative proteins, novel ingredients, retail and restaurant tech, health and wellness and more, while AgTech uses technology to drive farming efficiency and sustainability. The numbers speak for themselves. The global market for Foodtech is expected to reach a value of USD 342.5 billion by 2027, according to recent analysis by Emergen Research, while according to a forecast by the Barclays Group, the global market value of meat substitutes alone is expected to reach USD 140 billion for 2030. “According to a recent McKinsey study, recent growth in VC investment was particularly transformative for the Food and AgTech sectors,” points out Taylor Wessing’s London partner Josef Fuss. “Approximately 20 times more capital was invested in new Food and AgTech ventures in 2021 than 2012, whereas VC investment in the overall market grew approximately 11 times over,” he adds. While VC investments into AgTech and Foodtech start-ups plunged in 2022, according to a report in the Financial Times, investments were still higher than in 2020, and with the impact of climate change, the continued focus on food security, and demand for healthier, chemical-free food, analysts and lawyers agree that interest in Foodtech and AgTech will only increase in the longer term. As Fuss of Taylor Wessing adds: “In terms of VC funds, in the U.S., particularly active funds in AgTech are SVG Ventures, the Yield Lab, S2G Ventures, Cavallo Ventures and Ag Startup Engine – all invested in over 15 AgTech transactions in 2022. Meanwhile, in Europe, 2022 saw Paris-based Capagro, the first European independent VC fund dedicated to Food and AgTech, launching a €200 million fund. Other European prominent investing in this space includes Five Season Ventures, Astanor Ventures, Future Positive Capital and FoodLabs. There is also a rise in the number of specialized VC funds.” Foodtech set to reach over USD 340 billion by 2027

7 “The main areas of interest in AgTech are robotics solutions, especially in developed countries, with robots designed and used for crop harvest and fruit picking - Tevel Aerobotics andMetoMotion are examples for companies in this area,” adds Alon Rom, partner at Gornitzky. He adds: “Crop pollination solutions are vital for growing crops, with such solutions are divided into solutions that are substitutes for bee pollination and those for optimizing beehives and the bee pollination process - companies like Bumblebee A.I and Beewise are examples for companies in this area. Genetics solutions and optimization in agriculture are used to produce better crops in terms of quantity and quality with less land and water resources, adapting to climate change effects.” “As for AgTech, innovations dealing with identifying and treating diseases in crops, vegetation etc. have become very popular,” adds Ronit Amir-Yaniv, partner at Arnon, Tadmor-Levy, while Fuss of Taylor Wessing adds: “The range of Israel’s Food and AgTech innovation capabilities is broad and varied, including soil and plant sensors, cutting-edge swarming drones, autonomous robots, plant genetics platforms, cultured meat, smart irrigation, and big data analytics software.” There are also many companies in the alternative protein and plant based protein space. “Growing farm animals as food supply and source of protein for mankind is one of the causes of climate change due to the high carbon footprint generated from such activities,” Gornitzky’s Rom adds. "Another area of interest is the development of alternatives for sugar and salt as a solution to pandemic-level health issues such as diabetes, blood pressure and obesity,” he adds. From robotics solutions to optimization agriculture, many fields draw interest Alternative proteins and alternatives to sugar and salt

8 Israel’s leadership in Foodtech comes as no surprise to many. Driven by a successful hi-tech ecosystem, strong biotech, agrochemical and medical industries, the country has emerged as a frontrunner in these vital industries. “The unique value Israel has for innovations in these industries is the common and inherent use of AI, Big data and deep learning to further advance and enhance developments,” states Amir-Yaniv of Arnon, Tadmor-Levy. “Israel's agricultural capabilities have been developed over decades in an exceptionally limited natural resources environment,” adds Tal Karplus, partner at Shibolet. “Its innovation and entrepreneurial culture, coupled with experienced human capital and strong academic and government infrastructure, have provided a suitable platform for the development of companies in the agrifood field and as such, significantly contributed to global agrifood market innovation.” “Israel is a Food and AgTech powerhouse for several reasons, including government support and lessons learned by the ecosystemdue to a shortage of natural resources which drove innovation in this sector long before it came onto the global agenda,” adds Nathan Krapivensky, senior counsel and cohead of Taylor Wessing’s Israel Desk. “The Israeli government supports the Foodtech industry in a number ofways,” agreesMaggie Craig, Boston partner at DLAPiper. “It is not only an economic issue for the country but also one of security. Being self-sufficient to feed the country was highlighted for many countries during the Covid 19 pandemic but has always been top of mind for Israel.” She adds that “the government provides financial capital through the Israel Innovation Authority (“IIA”), an “independent publicly funded agency, was thus created to provide a variety of practical tools and funding platforms aimed at effectively addressing the dynamic and changing needs of the local and international innovation ‘Israel is a Food and AgTech powerhouse’ Growing support from the Government and the Israel Innovation Authority

9 ecosystems.” Craig of DLA adds: “The IIA has an International Collaboration division “responsible for coordinating international collaboration in innovative R&D knowledge and technology between Israel companies and counterpart organizations abroad, thus offering various competitive advantages for the Israeli industry in a global market.” As Gornitzky’s Rom confirms, the country’s advantages include “strong academic research institutions such as the Weizmann Institute, the Volcanic Institute and the Faculty of Agriculture, a tradition of innovation resulting in many start-ups in the field, extensive agronomic knowledge that complements and is essential to the start-ups' activities, and complementary knowledge in computer science and AI that also plays a factor in the success of the AgTech and Foodtech fields.” Furthermore, you have the Technion Israel Institute of Technology, which recently announced it is establishing an R&D center for substitute proteins with USD 20 million in investments over five years, while there is also sector support from Ramot Tel Aviv University and the Hebrew University of Jerusalem, among others. The Israeli Government already declared a national program for the promotion of the Foodtech in the Galilee, with TelHai College, the flagship college of the region to play a significant role in the advancement of this initiative. “Amongst VC's and investors in the industry are Bioworks, Millenium footech, Entrée, Kubota, FIMI opportunity, Vertex Ventures and many more,” adds Ronit Amir-Yaniv, partner at Arnon, Tadmor-Levy. “Some of the companies that are currently active and which I personally accompany include Botanohealth, Bioled and Eroll. These companies originated in Israel though some have already infiltrated the global market. Active funds also include Seetree and Nobactra.” World of Academia plays key part Many investors in the field, from multiple VCs to multinational strategics

10 EBN’s Caner adds: “In the food tech sectors, many CVCs, such as ADM, Tyson food, Muller ventures, and Rich Ventures, as well as specialized VC funds such as S2G, Emerald and others,” while Rom of Gornitzky points to VC funds, such as Terra Ventures, Bridges and private equity funds such as Tene Funds, as well as designated funds, such as PeakBridge, A.P. Partners, and JVP. “Most of the serial investors in the food and agriculture space are multinational strategics, generally big global food companies whose business stands to be disrupted by innovation in their space,” says Joey Shabot, partner and Tel Aviv Managing Shareholder of Greenberg Traurig. As Amir-Yaniv of Arnon, Tadmor-Levy adds: “Notably, all major food corporations such as Unilever, Osem, Strauss, Coca-Cola and Tnuva, have established incubators with the objectives of encouraging innovation in both these markets and attracting investors to invest in emerging start-ups. “Since local companies’ ability to raise funds for emerging startups has been limited, they have responded by transferring their efforts to their international owned/ controlled corporations.” Nevertheless, several well-established Israeli companies are heavily involved, among them Strauss and the Tnuva Group, Israel's biggest food manufacturer and leading dairy producer, leading the way. Tnuva created a new investment fund called Tnuva NEXT for investing in food-tech start-ups. Tnuva is also a partner in the Fresh Start, a Foodtech incubator in Kiryat Shmona, which, since opening in 2020, has completed investments in 10 food-tech startups, among them ProFuse, which operates in the field of cultured meat, and BlueTree,which developed technology to lower the sugar content of fruit juice. For the companies themselves, one key consideration is expressed by Greenberg Traurig’s Shabot. “How do I as a small innovative company protect myself from, on the one hand, being overly aligned with a key strategic investor, such that other strategic investors are not scared from investing in my company, because they think I am sort of already on the hook with one specific strategic investor who invested early. So, entrepreneurs need to be focused on that and they are.” He adds: “The other piece is how do I protect my IP from the big players - my knowhow or my secret sauce from being exposed too much to a potential competitor that is theoretically capable? This is definitely not the strategy of the multinational companies that we work with, but the worry is always there on the start-up side. So careful consideration goes into the approach of structuring the relationship with a strategic in terms of too much information

11 Israel at forefront of alternative proteins market – 2nd only to U.S. versus too little information flow.” With investments into these fields, patience is key. As Caner of EBN points out: “The obstacles are that these areas often require more time to market than the standard enterprise software, AI and cyber sectors, for example, so that the investors need more patience. Also, both sectors often involve "hardware" or production activity that are less desired by the standard VC.” “In both fields investors should be aware that there are long development cycles and sale cycles, so the exit strategy should be different and longer in comparison to sectors such as software,” adds Gornitzky’s Rom. “In addition, many of the technologies in the field originate from the academy and are provided to companies under equity plus royalties models. Investors should carefully examine such license agreements as they are not always compatible with the company's business model in terms of margins and freedom to operate.” “Today, in Israel, there are over 500 companies across the strong Foodtech sector," said Eliran Elimelech, VP of Ecosystem Development at Start-Up Nation Central at The Future is in AgriFood Tech panel in November 2022. From 2017 to today, Foodtech companies raised approximately USD 1.5 billion.The leading sub-sectors in this segment are sectors such as alternative proteins and novel ingredients, with the majority of investment poured into alternative proteins, which include plant-based substitutes for meat, dairy, and egg, cultivated dairy, meat and seafood made from cells, and various fermentation processes and products. “Over the past couple of years we have witnessed food-tech companies are thriving particularly in sectors such as alternative meat, alternative milk, superfoods in general,” adds Amir-Yaniv at Arnon, Tadmor-Levy, also indicating “an emphasis on innovations creating solutions to store food and extending life-expectancy of foods.” In terms of the alternative protein sector, Israeli companies come second only to the US in funds invested, with companies like Wilk, SavorEat, Remilk, Zero Egg, More Foods, Aleph Farms and Future Meat Technologies working on replacing meat and dairy in everyday foods.

12 Future Meat attracts largest single investment round in cultivated meat industry. Rehovot-based Future Meat Technologies attracted an impressive USD 347 million Series B financing round, making it the largest single investment round in the cultivatedmeat industry. EBN represented the Company's main investors including S2G Ventures, Tyson Foods and Manta Ray Ventures since the first round of investment in the company, which developed a technology to produce lab grown meat products. One of the most notable deals in the Israeli plant-based protein sector in 2022 was the USD 135 investment in Redefine Meat, a maker of 3D-printed plant-based meat products, to fund production lines in Israel and the Netherlands, as well as expand its partnerships with restaurants and eateries. EBN has also advised some of the investors in Redefine Meat. There was also a USD 105 million investment in cultivated meat start-up Aleph Farms, which served up the first steak made of cow cells grown in a lab in 2018 and a cultivated ribeye cut in 2021. The company has raised more than USD 118 million to date. The success of Beyond Meat and Impossible Foods also shows that there is consumer demand for plant-based meat alternatives,while, in early 2022,Rehovot-based Plantish unveiled theworld’s first vegan, whole-cut salmon fillet. In December 2022, Israeli food-tech company Equinom raised USD 35 million in funding led by Synthesis Capital, a leading global food technology and alternative protein investor, as it looks to increase its offering of optimized plant protein ingredients to market. As Greenberg Traurig’s Shabot adds: “In terms of sectors or subsectors of the food and ag industry, we are seeing a lot of interest in the dairy-related industry. The dairy industry is an intersection of a very traditional and formerly quite local industry. Today, however, even before the AgTech revolution, large international companies have become leaders in the dairy business. With AgTech what is happening is that they are pivoting towards technology in order to replace traditional sources of dairy. Cow-free milk is one example, which has promise also for other human health applications. There are a The disruption of dairy and animal-free millk

13 Israel has company – other notably hot jurisdictions number of interesting Israeli companies that are active in this space.” The second-largest investment raised by an Israeli food tech start-up (announced in early 2022) was USD 120 million for Remilk, a developer of animal-free milk and dairy, using a yeast-based fermentation process to produce milk proteins. The investment was the single largest in a cow-free dairy company to date. As Shabot adds: “We are seeing dairy clients making inquiries and interested in making investments in this space. Even more so than the soy- and almond-based products, real milk alternatives have the potential to truly disrupt, in a good way, the world’s food chain.” “In addition to Israel, clients are exploring jurisdictions such as Canada, Portugal, Holland and the U.S. These countries are attractive to clients and other stakeholders, largely due to relatively relaxed local regulatory restrictions that are in place,” says Amir-Yaniv of Arnon, Tadmor-Levy, while Rom of Gornitzky adds: “California, Netherlands and France are all strong and

14 known territories in the in the Ag- Tech and Foodtech sectors." In fact, the U.S., UK, Canada, Denmark, India and Singapore are among those already rolling out massive funding for national food technology programs. If Israel wants to remain at the front, it will need a national strategy and investment. “The U.S. continues to impress as a center for food and ag-related innovation,” points out Shabot of Greenberg Traurig. “There are just a lot of companies, a lot of entrepreneurs and a lot of science, including at universities that are dedicated to various applications of agriculture. Not just on the investor side, but also on the innovation side. On the investor side, we are seeing more interest from in Europe, especially from France which is home to some of the biggest global food companies. Brazil is a major world player in terms of food commodity exports and internal production. Brazilian food companies are rightly looking for staying abreast of changes in the food industry. Even though for a few years there was tremendous interest from Chinese investors and Chinese strategics in food innovation, but recently that has been extremely quiet.” “Many governments in developing countries attempt to foster agricultural development and innovation,” adds Krapivensky of Taylor Wessing. “They do this by setting up funding facilities, extension programs, and research centres and by subsidizing private-sector and farm activities through fiscal measures. The United Arab Emirates, for example, is investing heavily in AgTech, seeking to make Abu Dhabi the global centre for innovation in agriculture. Their focus is on vertical farming, aquaculture, and hydroponics. And they’re working to be strategic in attracting investment and solving for food security, while also developing a knowledge economy. In the UK, for example, the Government has announced a further £16.5 million to drive innovation in agriculture. Funding will be divided among the successful applicants of two competitions: the £5.5 million Feasibility Projects competition, and the £11M Small R&D Partnership Project competition.”

15 Unique characteristics present challenges Israel has company – other notably hot jurisdictions Stronger infrastructure needed As Gornitzky’s Rom points out: “The difficulties in Foodtech in Israel are related to the size of the local market, which is very small, the long distance from the target market, extensive segmentation, heavy regulation with different rules for different territories. Food manufacturers are very sensitive to changes in the product, the production processes and the effect of the substance integrated into their products.” “The difficulties in AgTech in Israel - and in general - are related to the unique characteristics of the field. The field is characterized by extensive segmentation, each crop has different needs and solutions depending on the type of crop, the territory and even the size of the growers.There is no uniform business model or solution that fits all. It is essential that the company carry out a correct and orderly Total Addressable Market (TAM) and Serviceable Obtainable Market (SOM) procedure already in the product development phase to identify the right market for the solution.” According to anOctober 2021 report by nonprofit, TheGood Food Institute (GFI) Israel and multinational EY, stronger infrastructure for the domestic industry is needed, suggesting approximately NIS 1.4 billion (USD 450 million) will be required over the next 10 years to build the infrastructure to support the local industry in the form of multidisciplinary research centers, technology transfer programs (from university labs to industry), research grants and training, and an additional NIS 230 million (USD 74 million) should go toward building specific innovation hubs for cultivated meat, plant-based proteins, and fermentation tech start-ups. According to the report, the Israeli government should supply 56% of this funding, or almost NIS 900 million (USD 291 million), and the rest should be drawn from private investments in Israel and abroad. Researchers also estimated that, through the establishment of more food tech companies, the creation of thousands of jobs, possible future acquisitions, and food tech exports, the government could stand to gain NIS 26 billion (USD 8.4 billion)

16 in tax revenue. In January 2023, Israel announced its intention to create a R&D fermentation hubtomaintainitsedgeinFoodtech,withtheIsrael InnovationAuthoritycalling for proposals budgeted at NIS 50 million to build local R&D infrastructure for the production of alternative proteins. As Rom of Gornitzky points out: “The development and investment in such fields are no longer an option but a necessity. I expect that government support in the field will increase significantly and more specialized funds which understand the nature of the fields will join the ecosystem.” “As many Foodtech companies tend to integrate and implement several technological disciplines, I believe the market will become more cooperative in nature and the search for synergies and as well as in and out licensing of technology will become a fundamental need for many start-up companies operating in this sector,” added Karplus of Shibolet. “Food and AgTech funding may be down year-over-year, but it remains historically high, and we believe it will stabilize,” says Fuss of Taylor Wessing. “Considering a rising focus on ESG topics and a political focus on food security a lot of countries are looking to attract innovation and investments in the Food and AgTech sub sectors. Therefore, we expect that the market will continue to grow.” Agreement seems almost universal on this point. As stated by Amir-Yaniv of Arnon, Tadmor-Levy: “the Foodtech and AgTech industries are constantly growing and maturing. In spite of the obstacles – some of which are common to the broader hi-tech industry - we are witnessing a positive pattern in the expansion and development of these industries. The increased global focus on climate change and sustainability practices together with the uniqueness of Israeli innovations is driving the industry forward.” Many of the innovative companies and investors referenced are likely to be among attendees and exhibitors at the AgTech Israel Conference in Tel Aviv on May 2-3 2023. ‘Investment now a necessity’

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Jurisdiction Focus Cyprus Fireside Chat

19 Much has been written about Israel’s growing trade with the Gulf States following the signing of the Abraham Accords in 2020, but next door Cyprus has been moving along steadily for some time. In this edition, we shine a light on Israel’s growing relationship with its neighbor Cyprus. We catch up with Angelos G. Paphitis, Managing Partner of AGP Law Firm, a dynamic, award-winning law firm in Cyprus with a strong international presence: the firm opened a second office in the UAE in July 2022, and one of the rising law firms in Cyprus, Elias Christou Legal Services, speaking to Managing Director, Elias Christou. What are the other opportunities that lie ahead for Israel and Cyprus? AGP: “Cyprus and Israel have always enjoyed excellent ties in terms of culture, business, collaboration and ideal geographical proximity. There is still room for growth and collaboration on many different fronts, whereby both nations stand to win. Israel is well-known for its forward-thinking, dynamic economy and acute business practices,andCyprus iswell-known for beingable toaccommodate to the most successful businesses and businessmen from Israel, who have looked to Cyprus in terms of relocating and growing their businesses there within, benefitting from a very low corporate tax regime (corporate tax still stands at 12.5%), a helpful legal system based on the commonwealth structure, with Cyprus being an EU Member State since 2004 all gates being open to other EU Member States. Not only this, Cyprus features an impressive Double Tax Treaty Network, which allows all local and foreign companies to benefit from this regime.” Among the synergies between the two countries, gas is key, while Tourism, real estate and shipping are also among the most prolific industry sectors in Cyprus. What is shaping these sectors? What should Israeli entrepreneurs specifically be aware of? AGP: “TourismhasbydefaultbeenoneofCyprus’mainGDPcontributors,with the obvious advantage of 355 days of sunshine on the island of Aphrodite and roughly speaking 6months of summer and very warmweather, beautiful Cyprus Fireside Chat

20 beaches along all coasts, a wonderful mountainous area uncommon within most Middle Eastern countries, and other wonderful nature, rendering the island between crossroads an idyllic holiday destination for many. Moreover, tourism has proven to be one of the most robust sectors of the Cypriot economy with ample room for investment, both in new and old hotel structures, but also in terms of newly constructed property catering to the needs of HNWIs and UHNWIs. Taking it a step further from tourism, local construction developers have become highly sophisticated in the structures which they build and sell off to locals or foreigners, but simultaneously also cater to the needs of those looking to permanently relocate to Cyprus, of EU or non-EU status, either in the form of permanent residency, family relocation, company relocation, employee relocation or other. All in all, any savvy businessman looking for a high return on investment, could do very well when investing in real estate all across the island, whether that is commercial real estate, residential real estate, or other. In some areas of Cyprus such as Limassol, where real estate is in extremely high demand both on the corporate and residential front, yield on rent can fetch up to 8% returns on an annual basis and property resale prices can bring in gains exceeding 25-30% in some cases from past pricing. All major cities of the island are experiencing growth, with Limassol being the most expensive but at the same time fetching the highest return on investment, Larnaca now featuring some of the best investment opportunities in terms of real estate, growth and still relatively low prices, and Paphos and Nicosia also experiencing very healthy growth and high demand in housing and commercial buildings. Elias Christou: “Cyprus has been welcoming tourists from Israel and their families for decades, and we see no sign of this slowing down. In recent years, we are seeing more and more a deeper interest in the island in terms of real estate due in part to its proximity (less than an hour flight), low cost of living and ease of obtaining work or residency permit. There has been exponential growth in the number of Israelis making real estate investments either for residence, holidays homes or business purposes. Furthermore the investment of Larnaca Marina the biggest Marina on the Mediterranean sea by an Israeli private company its described to be one of the major investments on the island. The Marina will change the seafront of Larnaca creating business opportunities and providing work for the local and foreign population.”

21 In cultural terms, how would you describe the two countries with regards to law firms and lawyering? AGP: “Generally speaking, both countries feature excellent law firms, which can prove to be mutually beneficial to both nations and their respective legal service offerings. Israel is a well-known hub for tech business and outstanding unicorns, and Cyprus is now a well-known hub for its growing tech sector, shipping, natural gas and much more. Since Cyprus is part of the EU now (since 2004) it can very strategically be utilized by Israeli companies which wish to relocate to Cyprus as an entry into the European Union, not foregoing the ideal geographical proximity, ease of doing business, fluency in English, and all around very friendly ties the two nations have been maintaining for decades now.” In terms of level of talent, creativity, technological or entrepreneurial passion, how are the two countries similar or different? AGP: “Israel is well known for featuring the fastest growing tech sector in the region (at competitive rhythms to those of Silicon Valley) but also has an outstanding growth rate in terms of all the unicorns which grow and succeed in Israel. Cyprus is now becoming an ideal destination for tech companies to headquarter to, with ideal corporate taxation at 12.5%, a great flexibility from the government in terms of the number of third country nationals which tech companies are allowed to hire, ample individual taxation benefits on high earning high level employees of firms of this type, etc. Israel has a lot of tech talent and know-how, but it could greatly benefit from relocatingfirms toCyprus in terms of taxation, favorableEUallowances andother.” What have been the major commercial transactions between the countries over the last 2 years? What interest do you see from your clients? AGP: “Israeli investors and businessmen alike have always favored Cyprus as an ideal business hub, one of them being the very famous billionaire Teddy Sagi who has invested a great deal in the island, with the Labs Tower in Nicosia being a prime example of an iconic building in the heart of the capital, and attracting business all around.”

22 Which major events should Israeli or Cypriot investors should be aware of for networking or thought leadership? Which do your clients like to attend? Elias Christou: “Cyprus and Israel share a long history of bilateral relations which have grown even stronger in recent years following the signing of The East Med gas pipeline agreement in 2020.” Together with Greece, Cyprus and Israel are working together on natural gas pipeline projects. Cyprus, Greece and Israel have agreed to build the world's longest and deepest underwater power cable that will traverse the Mediterranean seabed and link their electricity grids. The project, called the EuroAsia interconnector, is expected to be completed by 2024. The inauguration ceremony on the start of the construction works of Interconnector was held in October 2022 at the Presidential Palace in Nicosia. Elias continues: “It is well known that the two countries collaborate mainly on military, security, tourism, and more recently on the growing FinTech Industry. The Chambers of Commerce in Israel and the Chambers of Commerce in Cyprus are both very active and regularly hosts each other’s business delegations. In fact, we attended an event earlier, hosted by the Cyprus-Israel Business Association on the topic of Israel’s leading position in Artificial Intelligence in the region.”

Recent Market Trends Law firm merger mania in Israel

25 In a market where there are more lawyers per capita than anywhere else on Earth, it is not surprising there has been a spate of law firm mergers in Israel, but none more so than in the last couple of years.Why and why now? The merger between Goldfarb Seligman and Gross (to be called Goldfarb Gross Seligman) catapulted the combined firm to the coveted number 1 spot – in terms of size - with more than 520 lawyers, leapfrogging Meitar (appx. 470 lawyers) Herzog (appx. 450 lawyers) and Arnon, Tadmor-Levy (itself a recently merged firm with approx. 420 lawyers), three of the industry’s most recognized shining lights. As we were about to publish, another merger Naschitz Brandes Amir announced it was uniting with Shenhav Konforti Rotem & Co., giving the merged firm appx. 240 lawyers, coming in at number 9. The merger between Goldfarb Seligman and Gross was negotiated over several months. The Goldfarb Seligman team was led by Tal Atzmon, Levy Amitay and Amir Tzafrir and the Gross team was led by Esther Koren, Aya Yoffe and Dr. Ayal Shenhav. For the newGoldfarb Gross Seligman firm, the response has been “extremely positive,” according to the partners who led the unprecedented transaction “Our merger was just announced, overall reception in the market has been extremely positive and also internally the teams in both firms are excited.” The merged firm practice areas will include four central pillars with over 100 lawyers in each pillar. These pillars are International Transactions and Hightech, Israeli Corporate, Mergers & Acquisitions and Capital markets, Real Estate and Litigation. The merged firm will also have substantial practices in related areas of law including Taxation, Banking and Finance, Labor Law, Administrative Law (including local authorities and tenders), Intellectual Property (IP), Energy and Infrastructure, Antitrust and Environmental Law (including ESG). Dr. Ayal Shenhav, Ashok Chandrasekhar and Rick Mann who will Co-Head the International, Corporate and Hi-Tech Practice at the new firm explain why they are thrilled about the merger between the two firms “Goldfarb Gross Seligman will be a true powerhouse for all cross border transactional Law firm merger mania in Israel

26 work outbound from Israel and inbound into Israel.The combinedfirm includes a group of over 100 attorneys (of which over 40 are partners). This group has decades of experience including many partners who practiced in leading global law firms before moving or coming back to Israel. The firm represents a large number of startups, publicly traded companies, investment funds and international investors playing in each area of international practice.“ Nishlis notes that the Israeli legal market has seen many mergers over many years. The merger phenomenon is not new. Notable mergers in the past include Goldfarb with Seligman, Meitar with Leshem, Meitar with Kantor, Gross Hodak Greenberg with Kleinhendler Halevy and more. In recent years we see larger mergers as Israeli law firms have grown. In the past most mergers were between large firms (over 200 lawyers) and small / medium size firms (20 –80 lawyers). Now we see mega mergers. In March 2022, another mega merger. Yigal Arnon and Tadmor Levy merged, with a synergy of the two firms creating a strong force on the Israeli legal scene. In announcing the merger, the merged firm’s management said: “This is Israel’s largest ever law firm merger.” Until now. The trend of mergers between law firms has in recent years led to the disappearance of medium-sized firms, with these changes stemming from the understanding that business continuity requires change and joining firms together provides the "One Stop Shop" and a variety of services for clients and will be beneficial to attract high-quality personnel and for large clients. In December 2022, Agmon & Co. Rosenberg Hachohen & Co. announced its merger with Tulchinsky Marciano Cohen Levitski & Co, with approximately 180 lawyers, with offices in Tel Aviv, Jerusalem, Beer Sheva and Sydney, Australia. This merger boosted the firm’s presence in the technology & life sciences sectors, expanding the firm's commercial offering in the VC and high-tech sectors, among many others. In recent years, Hamburger Evron merged with Erdinast Ben Nathan, Toledano & Co.; S. Friedman & Co. merged with EfraimAbramson, the Fisher law firm added the Zeev Hollander firm, and the Eitan Mehulal firm broke up and its lawyers split between Fischer, Gornitzky, Barnea Jaffe Lande and Naschitz Brands Amir.

27 Any merger will be the result of mix of reasons, discussed and debated (often in secret) by a law firms' partnerships. We don't pretend to have access to the most secret concerns of law firms' top brass, but in our view, there are key drivers for why law firm mergers happen: going global, going national, entering new markets, practice expansion and economics of scale. Among the reasons for mergers, there are: 1. Increased geographical reach – many firms may want to expand their combined reach into regions and jurisdictions where their clients operate. 2. Increased sector presence – a firm wants to diversify the practice areas it already covers and combine the synergies of the two firms Each firm wants to be a true one stop shop. This means having a Tier 1 practice in all key practice areas including Israeli Corporate and M&A, International Corporate and M&A, Hi-Tech, Real Estate, Litigation, Tax, Labor Law, IP, Environmental Law and ESG, Antitrust and more. Many firms have practices in all of the above areas but not Tier 1 in all areas. 3. Improved market position – a firm wants to solidify its position and it will strengthen its position by joining with another, to increase its potential when bidding for the most sophisticated work. In addition, diversification in changing markets is key: A larger firm has a more diverse practice, so it is less dependent for example on strong hi-tech, strong capital markets, changes in real estate etc. 4. Attracting Talent: The legal market is working hard to attract and maintain talents. Many young attorneys prefer to move to hi-tech companies, others prefer to work as in house counsel, each firm wants to hire top students and retain them for many years. Mega firms have a better chance of attracting and retaining top talent. These mergers, while they come with many challenges, present a raft of opportunities for young attorneys – such as access to different types of work and new clients; enhanced learning and development opportunities. 5. Another key driver is economics of scale. A larger firm can provide a large conference center, strong marketing, strong finance team, strong HR teams and more general services for the firm wide platform. While there can be many benefits to lawyers and clients, a 2016 blog from LexisNexis discussed the importance of managing the process carefully. It says: “Some firms focus too heavily on operational issues – eg, billing and

28 IT systems – and fail to spend enough time in advance on “client strategy (eg, account management, conflicts management, practice development and industry focus) and a firm’s culture and people (eg, agreeing common working practices, keeping and developing its joint talent)”. When looking forward a senior partner from one of the leading firms adds: “I think more mergers will follow with a handful of firms eventually emerging which will be much larger than others. I think clients will be seeking to use the mega firms for transactional work and regulatory work. Smaller firms will continue to thrive in niche areas such as tax, litigation, family law and more. I also thinkmega firmswill seek newgrowth engines including advisory services on non-legal matters leveraging their brand, resources and connection with key clients.” “The Israeli legal market is changing rapidly,” adds Idan Nishlis, CEO of Nishlis Legal Marketing: ”I can imagine scenarios that have never been relevant till now, such as: an international law firm merging with an Israeli firm (such as Kennedys and Zelichov last year) and a triple merger.” Nishlis adds: “Mergers among law firms is obviously not a new trend, but it did pick up in 2022, in the wake of the global challenges and current legal trends. Between 2019-2021, there are approximately 40 mergers (including departments leaving a firm to join another), in Israel. In 2022 we might have seen fewer mergers, but nonetheless, much bigger ones – including law two top-30 law firms that dissolved. It is interesting to see that in 2019 and 2020 there were 180 law firm mergers in the US (see graph below) and 250 law firm mergers in the UK (see graph below). With the US and UK legal markets much bigger than the Israeli market, we can see how dynamic the Israel legal market is, and at the same time attune with global legal market trends.” These are interesting times.


Recent Market Trends A growing interest in Israel - 2023 Israel Business Development

31 Ten years have passed since Israeli legislation first allowed law firms that specialize in the law of a foreign country to open in Israel. In an article featured in Israeli financial paper “Globes”, on the third anniversary of the legislation, it was said that “one can hardly say that the large international law firms have swamped the Israeli market, but nevertheless some notable names have opened modest representative offices here.” At that time,12 international law firms had representative offices in Israel, according to data collected by Nishlis Legal Marketing. Furthermore, an estimated 90 law firms had an Israel Desks, mostly U.S. law firms. Number of Israel Desks doubled in a decade Fast forward ten years and the numbers have nearly doubled. According to recent data, compiled by Nishlis Legal Marketing, there are 160 law firms with an Israel Desk, out of which 22 have presence in Israel. Interestingly, Covid-19 pandemic accelerated Israel business development dramatically. In 2020 there was an estimated 130 international law firms with an Israel Desk, 17 actually in Israel. This translates to an increase of nearly 40% of international law firms on the ground and 23% jump in international firms with an Israel Desk. Why did more global law firms take a greater interest between 2020-22? There were three principal factors at play that attracted foreign firms: 1. Israeli firms became more sophisticated and strategic with regards to their international business development and referrals.Until 2019, there were a handful of Israeli firms that had the bulk of the referral work and most of these firms referred the legal work in a tactical manner (who do I know that I can refer to). Only then did firms start to treat their referrals more strategically and allocate them by various criteria, collect and track the data. A growing interest in Israel - 2023 Israel Business Development

32 2. Covid provided new opportunities for Israeli companies globally. Aside from the obvious rise in the Healthtech/Medtech, sector, there were two other sectors where Israeli companies dominated. With more of business and life going online, there was a greater need for cyber security and fintech (with related practices such as data privacy and protection). This saw sizable legal activity, outbound, such as investments, M&A, regulation and capital raising. 3. More Israeli law firms engaged in outbound work. Closely related to the second point, once clients are seeking global mandates and pursuing opportunities outbound, law firms representing them need to follow through. Thus, law firms who were previously domestic by nature (mostly mid-sized firms), found themselves referring work and collaborating with international law firms. Ascanbeseeninthe2022IsraelDesksinfographic,thereare160international law firms with an Israel focus: 100 firmshave a proclaimed desk/practice (and 617 lawyers are affiliated to those firms) and 60 firms unofficially have Israel capabilities. Nonetheless, all 160 firms have referral work and close relationships with Israeli firms and companies. 70% of those law firms are U.S. based, 20% UK-based, with the remainder spread around the world.

33 Is this growth justified? Well, yes - the numbers back this up nicely. According to Nishlis Legal Marketing’s IsraelDesks platform, there were 1,868 referrals in 2021, in data collected from 40 international law firms (mid-size to large) across 11 main practice areas. This referral data relates to only a quarter of the global law firms involved, so the real number will be far higher. On a wider macro view, the market has returned to consistent growth, albeit not the numbers from 2021. Foreign investors are investing in earlier rounds and leading U.S. venture capital firms have continued to invest in the Israeli ecosystem since 2020. Furthermore, Israel has maintained its ranking as the 5th largest tech ecosystem worldwide and at 2nd globally in producing new unicorns. In summary, we see a constant rise in international law firms opening an Israel Desk and we are often approached by these law firms who are exploring their next steps – including how to open a rep office in Israel. With the increasing amount of work (e.g. referrals), more Israeli law firms involved, and the growing sophistication of the market, we would expect this trend to continue.

Recent Market Trends Israel High-Tech Activity Report


Recent Market Trends Expert Insights - Key trends for 2023

37 We’ve got a knack for this. With a jam-packed team of media, business and legal experts, we find ourselves at the forefront of legal comms and marketing.Workingwith leading domestic and international lawfirms across 14 jurisdictions, we are not only attuned to the latest market trends and the challenges faced, we also know how you can prepare for these. We pride ourselves in collaborating with outstanding lawyers worldwide; we recognize what motivates them and can pinpoint the imminent opportunities in the sector. Nishlis Legal Marketing is more optimistic than ever before! With 2023 underway, our experts are eager to share their insights and predictions. Will 2023 be your breakthrough year? Idan Nishlis, CEO There will always be turbulence within the legal sector. With good planning however, any crisis can be anticipated and managed. By taking the time to reflect, plan and adapt, you are putting your firm into an excellent position to help deal with anything that is thrown at it. Let 2023 be your breakthrough year! To name a couple, in-person networking and business development have been gradually returning to pre-pandemic levels and this carries many implications, however this also creates many opportunities. • Law firms that have adjusted to a digital-first marketing strategy are seeing results • In a digital and online world, there is more data to analyze (which can lead to more opportunities) and more of a firms’ lawyers can now be engaged in the marketing and business development of the firm, as they are more attuned to online networking and connectivity Expert Insights - Key trends for 2023