Israeli payroll, HR and compliance support startup company Papaya Global announced Thursday that it will withdraw all of its funds from Israel in response to judicial reforms being led by Prime Minister Benjamin Netanyahu.
“Following Prime Minister Netanyahu’s statements that he is determined to pass reforms that will harm democracy and the economy, we made a business decision at Papaya Global to withdraw all of the company’s funds from Israel, tweeted Papaya Global CEO Eynat Guez. “In the emerging reform, there is no certainty that we can conduct international economic activity from Israel. This is a painful but necessary business step.”
In 2021, Papaya Global was valued at $3.7 billion. It provides payroll services to companies such as Microsoft, Intel and Toyota. The Herzliya-based firm works all over the world, including in countries with less-than-stellar human rights records such as China, Kuwait, Libya, Malaysia, Morocco, Myanmar, Qatar and Saudi Arabia.
“No wealth holder will put money in a state where democracy is crumbling,” said Guez.
Despite Guez’s announcement, it is unclear exactly what steps Papaya Global intends to make. As a payroll company and not an investment firm, Papaya Global does not manage extensive assets that it could withdraw from Israel.
“I did not understand,” tweeted Kan News economics editor Shaul Amsterdamski in response to Guez’s announcement. “Are you closing your bank accounts in Israel and transferring everything to foreign bank accounts? Diverting investments? What does it mean?”
It is also unclear whether this means Guez will shut down Papaya Global’s headquarters in Herzliya, north of Tel Aviv, effectively firing herself. In addition to the bureaucratic hurdles and expenses that are incurred from paying employee salaries without a local bank account, the payroll company’s declared actions may run afoul of anti-BDS laws in Israel and the U.S.
Senior executives from Israel’s business and tech community have also voiced concerns concerning the government’s plan to overhaul the judiciary. Tens of thousands of Israelis have protested in Tel Aviv, Haifa and Jerusalem against the proposed reforms.