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posted: 6/1/2013 7:09 AM

Tel Aviv woos technology entrepreneurs with startup visas

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TEL AVIV, Israel -- Tel Aviv is becoming a premier destination for technology companies, and government is working to attract more foreign entrepreneurs and reinforce the area's reputation as Silicon Wadi, an Arabic word used colloquially in Hebrew for valley.

Economy and Commerce Minister Naftali Bennett has agreed to push for legislation to create the Startup Visa, allowing foreigners with creative muscle to establish residence in Tel Aviv. The city also plans to offer free Wi-Fi in all major public places, officials said at a news conference this week, so that programmers could tweak their applications while sitting on a bench outside the Habima Theatre or at the Tel Aviv Port.

"This is a top priority for us now, to keep fostering innovation in the city," Mayor Ron Huldai said on the top floor of the Shalom Tower, where a once-neglected public library was converted into a free startup workspace overlooking the Mediterranean Sea.

Tel Aviv, which has a population of about 400,000, is home to as many as 700 early-stage startups, according to city data. Its vibrant technology scene ranked second in the world after Silicon Valley, researcher Startup Genome said in November.

Leo Widrich, co-founder of social-media app Buffer, relocated his half-dozen employees to Tel Aviv last year after moving from San Francisco to Hong Kong. His team chose the Israeli city for its buzzing startup community and pleasant weather, Widrich wrote on his blog. He said Tel Aviv beat cities such as New York and Rio de Janeiro though he did plan to move back to the U.S. later in the year.

Buffer is not a typical case. Widrich said he only moved out of San Francisco because his engineers couldn't get visas. Silicon Valley attracts the bulk of foreign talent because it has the largest stable of venture capital and the world's technology giants.

As a result, some Israeli companies end up moving to the U.S. when they outgrow their homeland. Waze, the crowdsourced-map provider that's seeking $1 billion in acquisition talks with Google and Facebook, moved its headquarters and some of its operations from Israel to Palo Alto, Calif. BillGuard, which helps consumers identify mischarges on their credit cards, established its headquarters in New York, though it maintains an office on Rothschild Boulevard, an Israel technology hot spot.

While about 50 percent of Silicon Valley startup founders are foreign born, businesses in Tel Aviv are mostly started by Israelis, according to Avner Warner, the city's director of International Economic Development.

"The vision is that Tel Aviv can start to develop a more international startup culture," Warner said. "More foreigners here would attract more capital and allow for deeper engagement between locals and global innovators."

On a walk along Rothschild Boulevard, Nissim Lehyani might run into venture capitalist Michael Eisenberg or an acquaintance from eBay's innovation center. Lehyani runs Easy Social Shop, one of many technology startups with offices on the ritzy street in Israel's second-most-populous city.

Lehyani said he's had little trouble recruiting engineers to his company, which helps small online merchants market their wares on Facebook. Lehyani, like many of the nation's technology entrepreneurs, made plenty of connections while serving in one of Israel's military-intelligence units.

"It's so much easier to attract talent here," Lehyani said. "This city is overflowing with cafes, good food, nice weather and young people. It feels as though things here just happen more naturally."

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