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Opportunities for Israeli Companies
Texas is a large market with opportunities in industries in which Israeli companies are
active. Strong political and business ties already exist between Texas and Israel as
demonstrated by recent governmental delegations to Israel, the presence of an Israeli
consulate in Houston and the efforts of the Texas-Israel Chamber of Commerce
to promote economic development between the two. Texas is the primary base of
operations for a number of companies currently operating in Israel, including Noble
Energy, that have experience partnering with Israeli companies to pursue joint ventures.
Many Israeli companies already conduct significant business in Texas. The Delek
Group’s U.S. affiliate owns and operates refineries and pipeline facilities. And Alon
USA, a Dallas-based company with roots in Israel, owns petroleum refining and
marketing operations throughout the state. IDE Technologies, an Israeli company
specializing in water treatment solutions, has opened an Austin office, recognizing
the need for advanced technology to solve water issues in Texas. Israeli companies
are also frequent participants in conferences and professional events in the state, as
evidenced by the number of Israeli presenters and attendees at the 2016 South by
Southwest Interactive conference in Austin.
Texas offers arguably the most streamlined regulatory process of any American state
for energy extraction and production, creating relatively low barriers to entry for
traditional and renewable energy projects. The Texas Railroad Commission regulates
the state’s oil & gas industry, and the agency is a one-stop shop for all necessary
permits. Texas, unique among American states, hosts an independent electrical grid
that is not subject to federal regulatory jurisdiction, which reduces the regulatory
burden associated with investments in power facilities.
Texas prides itself on being a state of limited regulation, low taxation, and business-
friendlycourts. Israeli companiesmaybepleasantlysurprisedat theeaseof conducting
business. The cost of doing business in Texas is relatively lower than in other areas of
the country, due to availability of real estate, well developed infrastructure and the low
cost of living. Texas also levies no corporate or income tax, greatly reducing costs to
capital intensive business.
Challenges and Differences
Although Texas is a low-regulation environment, foreign companies must still
adequately familiarize themselves with the laws of Texas and the United States before
advancing a business. Texas and other states offer a number of different forms of
corporate organization that may be utilized in the event a foreign company wishes to
establish a subsidiary to implement investment here. Israeli companies should work
with local counsel to determine the optimal investment structure. Additionally, foreign
companies should consult their advisors regarding potential tax consequences of any
proposed investment. Israeli companies seeking to access the capital markets in the
United States to raise money for their business operations will also need to engage
counsel to assist with compliance with federal securities laws.
Moreover, it is worth noting that the United States District Court for the Eastern
District of Texas is one of the most well-known and frequent U.S. venues for patent
Texas offers arguably the most streamlined regulatory process of any American
state for energy extraction and production, creating relatively low barriers to
entry for traditional and renewable energy projects.