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ISRAEL


Israel now has the highest density of start-ups in the world – some 3,500 to a population of only 7.7 million


was to explore Jersey’s opportunities for economic diversification, mainly in online gaming, where Israel is a formidable force – nine of the world’s top 20 e-gaming companies are run or part-run by Israelis. The delegation, which included the heads


of the newly formed Gambling Commission, was able to seed relationships with some of the world’s leading e-gaming businesses, including 888.com and Playtech. With the ink still wet on Jersey’s e-gaming licensing legislation, these are just the kind of heavyweights Jersey needs on side. “These are big e-gaming players, and


they all have licences in the Isle of Man and Guernsey,” says Andrew Barette, Director of Jersey-based online game maker E-scape. “I understand Playtech has now signed up for a licence in Jersey. Now their Isle of Man staff may soon move here. That’s the trick – get the big guns on board and the others will follow.”


Technological advances The UKIB deal was spearheaded by Wayne Gallichan, Director of Inward Investment and International Trade at Jersey Enterprise. He admits e-gaming opportunities won’t necessarily rush in, but insists that they will be significant. “We have to be in it for the long-term,” he says. “We should have some positive news regarding e-gaming by the end of the year. Companies on both sides are actively following things up.” Of course, Israel’s technical know-how


isn’t restricted to gambling. One need only look at the strides it’s taking in the clean-tech sphere (see page 27). It’s hoped Israel will see Jersey as the perfect shop window for


displaying its pioneering clean technologies to other markets, such as Europe. “We’re in the process of getting Israel’s


pioneering electric car company Better Place to visit Jersey,” says Gallichan. “It could be the perfect place to test and showcase the model.” Finally, Jersey could benefit from its Israeli connections through a more familiar channel: financial services. With so much wealth chasing physical assets within Israel, the country currently suffers a real risk of a property bubble and inflation. Hence Israelis are actively seeking to invest elsewhere. And the timing may just be perfect for Jersey. Israel taxes its residents on their assets, wherever they’re held, but as part of the state’s 60th anniversary celebrations, the Government set up an incentive to encourage immigration – newcomers would be allowed to keep existing assets overseas tax-free for 10 years. Jersey’s wealth management expertise, particularly in Foundations, could be very useful here. “It’s prosperous and there are lots of entrepreneurs,” says Geoff Cook, CEO of Jersey Finance. “That means there’s a lot of quick wealth, which in turn means potential for us with private clients.” Then there’s the commercial-corporate


work – Israel may wish to use Jersey as a conduit for companies to list on the UK markets. It’s already the UK’s largest trading partner in the Near East and North Africa – bilateral trade in 2010 was up 31 per cent on 2009, at £2.83bn. While Nasdaq is currently the market of choice for Israeli companies, the country is geographically far closer to London, with just a two-hour time difference, so a switch to using Jersey holding companies


to list on AIM is possible – at least when the Jersey financial services brand is better known. “There’s a real appetite to explore what


Jersey has to offer,” says Richard Pirie, Senior Associate at the Jersey office of law firm Collas Crill, who joined the delegation to Tel Aviv. “We’ve sown the seeds, and people are already following up on opportunities. Given that the Israelis don’t tend to mess around, things may move quicker than you’d think.”


Reaping the rewards The benefits could, of course, be huge. If a company like Playtech moved their base to Jersey, support services, including accountants, lawyers, trust companies, and infrastructure and data-hosting companies would all benefit – and the signs are there that this could happen soon. “Many very large Israeli businesses are considering relocating,” says Seal. “Watch this space – in the next six months you’ll see the fruit.” All of which must be a little hard to


swallow for Guernsey. Yes, its partnership with Alderney means it’s already ahead in e-gaming, but in gaining direct access to powerful leaders in one of the world’s most thriving economies, it’s really missed a trick. “Israel wanted to carefully select an partner to work with on an almost exclusive basis, and we got in there,” says Pirie. “Of course Guernsey can still compete with private wealth clients, but it’s certainly not in such a strong position to find them.” Jersey, meanwhile, has suddenly found


itself in a very promising position. The only question is whether it’s wise to partner with a country that’s smack in the centre of such a troubled part of the world, but that doesn’t appear to be a concern. “You can always find a reason not to do business with any country if you look hard enough,” says Gallichan. “The main warning was that Israeli business people are forthright and blunt. But I like that – they don’t mess around.” That very characteristic has rewarded Israel


with strong GDP, a well regulated economy and a dynamic culture of innovation. It sounds like Jersey has found the perfect partner. l


Tel Aviv 26 businesslife.co October/November 2011


DAVE WALLER is a freelance business writer


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