Two and a half years ago, Israel and the United Arab Emirates (and several other Arab states) signed the Abraham Accords, which normalized relations between the countries and turned Dubai, the UAE’s major business center, into a tourist destination of choice for Israelis. But that’s only part of the story. Almost under the radar, branches of Israel’s high-tech sector have moved to Dubai for a long-term stay.
Several Israelis have chosen to establish development centers in Dubai – and to relocate to the UAE city themselves. And it’s not just entrepreneurs. Rank-and-file high-tech staffers – team leaders and programmers, salaried personnel and freelancers – have decided to move to the Emirates over the past year. They don’t quite constitute an Israeli high-tech “community,” but their presence is growing.
Israel and the UAE now have extensive business connections. Defense contractors Elbit Systems and Rafael Advanced Defense Systems have established branch offices in the UAE capital, Abu Dhabi. At the same time, the Abu Dhabi Developmental Holding Company (ADQ) is trying to acquire a controlling stake in Israel’s Phoenix Holdings after already making other investments in Israel.
One of ADQ’s Israeli investments is Aleph Farms, the cultivated meat company, which is currently considering opening a plant in the UAE. And the Israeli investment platform OurCrowd has also announced that it is investing tens of millions of dollars in expanding its operations in Abu Dhabi. That’s just a very partial list.
Ron Daniel, who is the CEO of the Liquidity Group fintech firm, became the first Israeli entrepreneur to open a development center in the UAE two years ago. “I went into the unknown,” he says. “I wanted to establish a genuine network of relations with the Emiratis, and I understood that to do that, I needed to invest in their local ecosystem. Since then, what was done as a tactical step turned out to be the smartest business move that I’ve made.”
He explains that it’s very easy to recruit talent in the UAE “because the quality of life is high and everyone wants to live here. It takes me just two weeks to get a work visa for people from all over the world, so in our development center, there are workers from 16 different countries, such as India, Singapore, Australia, Tunisia, Morocco, Iraq, Turkey and France. Around 30 percent of the workers come from Arabic-speaking countries.”
Quite a few workers from Liquidity’s development center in Tel Aviv live between Abu Dhabi and Tel Aviv, and travel between the two countries every two weeks, Daniel says. One of these staffers has actually moved to the UAE, and another few are considering it.
“As life in Israel becomes more difficult and tense, the employees look for serenity. I lived for many years in the United States, and as I see it, the Emirates are like Israel’s Miami. The flight takes just three hours, so you’re always surrounded by people from home who have stopped over for a weekend – unlike life in New York, where every visit is an event,” he said.
Of the seven emirates that comprise the UAE, Dubai is considered more cosmopolitan, and foreigners tend to prefer to live there. Nevertheless, Abu Dhabi, the capital, is considered the most significant power center in the country, and is also home to a considerable number of expats. The vision of the leader of the UAE, Sheikh Mohammed bin Zayed, includes turning it into a global center for technological development. In 2021, the government’s Technology Innovation Institute began building a quantum computer there.
Anyone wanting to live and raise their children in a liberal democracy won’t find what they are looking for in the UAE. But every Dubai transplant we spoke to for this article described Dubai as a pleasant city that is extraordinarily comfortable and safe.
Daniel himself lives in Dubai with his family, and makes the hour-long commute to his company’s development center in Abu Dhabi. His daughter attends a private, English-speaking Montessori kindergarten that also teaches French and Arabic.
“They also celebrate Jewish holidays there,” he notes. “The prices are like Tel Aviv, but the level is entirely different.”
As far as disadvantages go, Daniel says, “Israel really is home to me, but it’s like my parents’ house. There’s a stage in life when you enjoy visiting, but if you were to live there all the time, it would drive you crazy. I don’t know what it will be like here in the Emirates for the next generation, but for our generation, it’s a wonderful place.”
Life without income tax
It’s hard to compete with the UAE’s clear economic advantages, and a particular one stands out: The country has no income tax.
The incentives for companies that decide to open development centers there can also be exceedingly generous. Abu Dhabi, for example, is reimbursing Liquidity for 40 percent of all of its expenses. “We are the only Israeli company currently in this program. We receive a refund from the administration for wages, offices, the costs of visas and relocation. They help us in every way,” Daniel says.
But along with these major advantages, entrepreneurs also need to keep in mind the potential drawbacks of doing business in the Emirates. One is the geopolitical instability of the Middle East, which may affect business, especially for Israeli companies. Earlier this month, the Israeli media reported that the UAE was planning to freeze an arms deal with Israel following certain statements and actions by members of the Netanyahu government. Israeli officials denied the report.
Developers who come to the UAE need to be aware of the cultural differences that impact the way that business is conducted there. “On the social level, when Israelis sit with people from the Emirates, they ‘click’ quickly. But on the business level, the process is different. Israelis want to make things happen ‘here and now’ and get to the bottom line pretty quickly. In the Emirates, it’s the opposite: They want to forge a relationship, to build trust, to meet face-to-face. Only then are they ready to do business. This often creates a conflict,” says Noa Gastfreund, a founding partner of UAE-IL Tech Zone, a platform to foster collaborations between the Israeli and Emirati high-tech communities.
Gastfruend and Guy Katsovich founded the platform, and are currently working on joint initiatives ahead of the next global climate summit, is set to be held in Dubai. “Before my first flight to the area, I consulted with dozens of people about how to act and what to wear. When I got there, a lot of my preconceived notions were proven wrong. It’s a very open place,” she says.
Other Israeli companies that have opened development centers in the Emirates are the fintech startup Rapyd and outsourcing company ALLSTARSIT, which works with Israeli high-tech companies. ALLSTARSIT operates in several locations around the world and employs about 100 high-tech workers in Dubai. Some of its team leaders are Israelis who live there.
“We thought about Dubai as a place to establish a site following the Abraham Accords, and before the war in Ukraine started,” says CEO Solomon Amar, who also lives in Dubai. “At the time, skilled technological manpower had become expensive in Eastern Europe in general and in Ukraine in particular. The idea was to establish an international center in a place where people from all over the world would be glad to live. In Israel, there are still stigmas about Dubai, because it is an Arab principality. But this stigma doesn’t exist in Eastern Europe, where the Emirates are perceived as an advanced and futuristic country.”
‘I chose Dubai and I don’t regret it’
The Israeli high-tech workers who move to Dubai are “young, single and adventurous. They want to gain experience managing an international team,” Amar says. As for the pay, “It depends on where the worker comes from. If he comes from Morocco, the Philippines or India, he’ll earn a lot less than an Israeli worker. Israelis earn more or less the same here as they would in Israel, with one significant difference – here they don’t pay income tax.”
Mila Miller, a Ukrainian-Israeli ALLSTARSIT employee who currently lives in Dubai, says that she was already working for the company when the war in Ukraine began. “I debated whether to return to Israel or to move to Dubai,” she says. “I chose Dubai, and I don’t regret it. Once you live here, it’s hard to imagine living in other cities, because you get used to the excellent service you receive everywhere here – from restaurants and venues to public services, which are very comfortable and helpful. Before I came here, I thought it would be hard to live as a single woman in an Arab country, but there’s a sense of security.”
Article source: https://www.haaretz.com/israel-news/2023-03-23/ty-article/.premium/israeli-tech-workers-in-the-uae-the-smartest-move-ive-made/00000187-0e80-d26b-a5f7-dff8f4170000