DLA Piper Israel Group highlights global scaling challenges for Israeli high-tech unicorns
As Israeli high-growth companies expand into international markets, particularly the United States and Europe, they are encountering a growing set of legal and regulatory challenges that extend beyond traditional scaling concerns. Differences in employment laws, commercial norms, and regulatory frameworks are forcing companies to rethink how they structure contracts, manage teams, and mitigate risk across jurisdictions.
We asked DLA Piper — whose Israel Group recently reported that 32 percent of its client are unicorns — to weigh in on the most recurring commercial and employment law challenges in high-growth companies at that stage, particularly around rapid international expansion.
On the US employment side, partner Victoria Richter highlights the complexity of building international teams and managing workforce risk. She notes that “many key markets do not permit termination without cause,” requiring employers to follow “a prescriptive process” depending on the jurisdiction, while “certain employees enjoy enhanced protections from termination,” including those on parental leave or with disabilities. She also emphasizes the importance of tailoring employment structures and documentation to local rules, warning that “non-compete and non-solicitation clauses drafted for a US context are often unenforceable internationally,” and adds that while independent contractor arrangements may offer flexibility, they “carry significant misclassification risk across virtually all jurisdictions,” potentially leading to financial penalties and legal exposure.
Regarding Europe, Dr. Thilo von Bodungen and Dr. Nico Brunotte — partners in DLA’s Munich and Hamburg offices — note that companies often discover that “US-style commercial templates are not in line with mandatory laws in the member states of the European Union,” and may also fall short in addressing regulatory requirements tied to data protection, artificial intelligence, and cybersecurity. They add that strict consumer protection rules can create unexpected exposure and require adjustments to business practices that worked outside the EU.
The overarching message for Israeli unicorns is clear: Adapting legal frameworks to local requirements is critical to successful and sustainable global expansion.
