As regular readers know, I am a fan of Delaware corporate law (a Delophile?). So I was interested to learn that:
Israel has invested significant effort, over two decades, into approximating its corporate law to the corporate law of Delaware. Furthermore, Israel established a specialized court dedicated to corporate law disputes, shamelessly copycatting the Delaware Court of Chancery. The declared objectives of this tremendous legal effort were twofold: first, to draw domestic entrepreneurs away from choosing Delaware over Israel as the locus of incorporation, and second, to increase the willingness of foreign investors—especially U.S. and global investors—to choose or accept Israeli corporate law as the governing law in cross-border M&A transactions involving Israeli target corporations.
Which suggests that the Israeli government thinks corporate law is a race to the top that Delaware is winning.
Interestingly, however, the authors suggest that the emulation project may not be working and, in fact, may even be backfiring:
Our findings indicate that U.S.-based practitioners are skeptical about the possibility of other jurisdictions emulating Delaware, whereas practitioners in Israel are ambivalent regarding the success of the approximation project but nevertheless use it as a “sellingargument” when market actors are reluctant to buy into an unfamiliar governing law. To the extent that approximation of laws is undertaken in order to increase local incorporation and adoption of the unfamiliar law, our findings indicate that a countervailing effect may occur because local practitioners become more familiar and comfortable with the approximated jurisdiction.
Baum, Ido and Solomon, Dov, Delaware’s Copycat: Can Delaware Corporate Law Be Emulated? (January 12, 2022). 23 Theoretical Inquiries in Law 1 (2022), Available at SSRN: https://ssrn.com/abstract=4007605
