Israeli Tech Deepens Its Foothold in Europe, Employing Over 30,000 and Posting Nearly 5% Annual Growth

23 December, 2025

New report highlights rapid expansion of Israeli tech across Europe, with Germany, Spain, and France as key innovation hubs and Central and Eastern Europe as major operational bases.

[Photo (right to left): Dina Pasca-Raz, Partner and Head of Technology at KPMG Israel; Eden Dvir-Zano, Managing Director of EIT Hub Israel; and Elle Taitou Spruch, Investor at pan-European VC fund Planven. Credit: Eyal Regev, Linus Seemann and Nicky Westphal]

Israeli technology companies have significantly expanded their footprint in Europe over the past three years, emerging as an increasingly influential force within the continent’s economy and innovation ecosystem. According to a comprehensive study conducted by EIT Hub Israel, pan-European venture capital fund Planven, and consulting firm KPMG, Israeli tech companies now employ more than 30,000 people across Europe, reflecting an average annual employment growth rate of 4.8%.

The report shows that most Israeli companies have chosen to base their European operations within EU member states, with Germany, Spain, and France serving as the primary innovation hubs. At the same time, Central and Eastern European countries including Poland, Romania, and the Czech Republic have become preferred destinations for engineering, R&D, and shared services centers, driven by lower operating costs. The study also highlights countries such as Lithuania and Bulgaria, where Israeli firms are establishing large-scale service centers employing hundreds of workers and creating significant local employment clusters.

The findings portray a relatively mature profile of Israeli companies active in Europe. Around 60% are established businesses that have been operating for eight to twelve years, rather than early-stage startups. Research and development roles account for roughly 40% of the workforce, underscoring the innovation-driven nature of Israeli high-tech. In addition, 31% of the companies maintain senior executive representation in Europe at the CEO or VP level, a figure that rises to 71% among large enterprises.

“The data shows that Israeli companies are deepening their long-term presence in Europe, which offers access to a major market, stable regulation, and advanced industrial partners,” said Elle Taitou Spruch of Planven. She added that “the alignment between Israel’s strengths in AI, cybersecurity, and health and Europe’s priorities is creating opportunities that are expected to accelerate further in the coming years.”

According to Dina Pasca-Raz, Partner and Head of Technology at KPMG Israel, “unlike the familiar model of a young startup initially targeting the U.S. market, most Israeli companies operating in Europe are mature businesses with local management. There is a natural synergy between Israeli strengths and leading European economies, particularly in areas such as security, AI, and sustainability.”

The authors conclude that Europe is not viewed as a substitute for the U.S. market, but rather as a complementary strategic destination, enabling Israeli companies to build deep, stable, and long-term operations at the heart of the European economy.

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