London: A better offer for Ofer?

The influx of wealthy immigrants to the UK has soared in recent years, not least from Russia and China, as the UK government bids to attract wealthy investors to its shores.

Idan Ofer 370 (photo credit: REUTERS)
Idan Ofer 370
(photo credit: REUTERS)
Idan Ofer is reported to be following in the footsteps of fellow Israeli billionaires Lev Leviev and Erwin Eisenberg and joining the swelling ranks of Israeli tycoons in exile in the heart of London’s thriving Israeli expat community.
The influx of wealthy immigrants to the UK has soared in recent years, not least from Russia and China, as the UK government bids to attract wealthy investors to its shores, with simplified immigration procedures introduced in 2008 that allow high-net-worth foreign individuals, with at least £1 million to invest, to remain in the UK for the long term, and even as citizens. At the same time, entrepreneur visas were introduced for immigrants who could create wealth rather than simply bring it with them.
For men like Ofer, for whom £1m. is small change, and the entrepreneurs who need to show access to smaller sums of money and then demonstrate that they can create jobs and contribute to the economy, London offers firm ground under their feet with security, political stability and a transparent legal system renowned all over the world for its fairness. I expect that in common with so many others around the world, many of Ofer’s companies contract with international partners under English law with English jurisdiction clauses, even if no party is based there.
The capital’s property market is thriving even when the rest of the UK is sluggish and much of Europe is collapsing.
London even has its own thriving Silicon Roundabout near the City of London as IT and hi-tech develop in the business center, which is very attractive to Israel’s own phenomenal hi-tech industry. There can be no doubt that London is appealing to people like Ofer.
From my work as an English solicitor based in Tel Aviv acting for any number of Israelis with business interests in London, whether based here or there, I have a real sense of London’s draw to the Israeli business community, and the already established expat community – with its quintessentially Israeli cafes and grill restaurants to complement everything else London has to offer, including a welcoming and tolerant host Jewish community – only strengthens the attraction.
On the other side of the equation for Ofer, Yair Lapid’s Finance Ministry is looking at hikes in corporation, income and capital gains taxes and VAT. All of us in Israel will be affected, but the social justice movement demands that Lapid target the tycoons. Ofer’s response is not surprising. His answer to Lapid’s famous question, “Where’s the money?” is simple: on its way to London. The issue is how many more will follow.
Ofer no doubt has family and personal reasons for moving. But it is said that his residence in London would save him an estimated $300m. a year in income tax under the Israel/UK Double Taxation Convention. Put in perspective, the tax rate from which he will benefit in the UK will be significantly lower than the rate the Israeli public would pay on a salary of NIS 15,000.
And that’s before the next round of tax hikes here.
When I made aliya, the cynics advised that the way to make a small fortune in Israel was to come with a large one.
There is something to that, but after seven years helping to build what is now the country’s largest foreign law firm and acting as an English solicitor for Israeli companies and individuals who are in business with or actually part of the London Israeli expat scene, it is clear to me that the ideal is a fusion of London and Israel, picking the best of both worlds. We have shown that you can enjoy that coming this way. Can Ofer replicate that fusion going in the other direction? ■
The writer is a partner in Asserson Law Offices, the largest foreign law firm in Israel. He made aliya from the UK in July 2006 when he joined ALO. Although it is based in Tel Aviv, ALO works under English law in commercial and property transactions and disputes.