Know-How Transfer / IP Migration
The relocation of intellectual property out of an Israeli company — typically post-acquisition — which triggers exit-tax exposure as a deemed sale and, where IIA funding was involved, additional grant-buyout obligations. Central to the economics of Israeli tech exits.
Know-How Transfer, or IP Migration, is the relocation of a company's intellectual property out of an Israeli entity — most often following an acquisition, when a foreign buyer wants the IP held in its home jurisdiction. Under Israeli tax law, moving IP offshore is treated as a deemed sale at fair market value, triggering exit-tax exposure on the appreciated value.
Where the IP was developed with Israel Innovation Authority funding, the transfer also activates the grant buyout obligation — an additional cost on top of the tax. Together these mechanics shape the economics of Israeli tech exits: the headline acquisition price and the structure of where IP ultimately sits are negotiated against a known offshore-migration cost.