Ross Belfer fell in love with Tel Aviv from afar.

In 2011, he was working as an account supervisor at New York creative agency Geoffrey Weill Associates, and was responsible for promoting the city as part of his work representing the Israeli Tourism Board.

“I was so excited by what was happening here,” he said. “The city was developing and expanding and progressing. I was writing press releases about Tel Aviv and wondering why I was spending all my time sitting in an office in New York.”

So, in 2011, Belfer took the plunge and moved there on a student visa for a master’s degree program at Tel Aviv University. Now, after founding his own creative agency in 2014, he spends his days promoting Israeli companies internationally.

The Mediterranean coastal city is hot right now, and not just for its nearly year-round summer temperatures, which can reach 40 degrees Celsius. In the last few years, Tel Aviv has been ranked the best smart city by the Smart City Expo World Congress, one of the best beach cities in the world by National Geographic, the best gay travel destination by and an outstanding culinary destination by Saveur Magazine.

You're talking about people that aren't afraid to take risks.

While Jerusalem is Israel’s holiest city and capital, Tel Aviv is its defacto economic capital. Easily reached via the Ben Gurion international airport, Tel Aviv is also home to Tel Aviv University — one of Israel's largest — the Tel Aviv Stock Exchange, foreign embassies and one of the highest start-up densities in the world, according to Compass’s 2015 Startup Ecosystem Ranking.

But it's not all business.

With miles of white sand beach; acres of green park surrounding the Yarkon River; one cafe, restaurant or club for every 221 residents; the adjacent ancient port city of Jaffa, which was established as a seaport in the Middle Bronze Age, and events ranging from political protests to annual public water gun fights, it is also considered by many to be Israel’s cultural heart.

On the radar

Elianna Bar-El, editor of Time Out Israel, attributed Tel Aviv's growing popularity to word of mouth. “People come during the summer, for holidays or for pride,” she said. “They go back to their countries and talk about it. It is especially intriguing since Israel is always in the news because of the Conflict.”

The “city that never stops” is now the 6th fastest-growing destination city in the Middle East and Africa, with visitors estimated to spend $1.5bn in 2015 according to the 2015 MasterCard Global Destination Cities Index.

The Israeli tradition for young people to travel after completing army service, which is compulsory for men for 32 months and women for two years from the age of 18, has helped get the word out. “Because Israelis travel so much, it lends such a mix of people to Tel Aviv,” Bar-El said. “Young Israelis act as unofficial ambassadors and people become intrigued by Israel.”

Innovative beachside living comes with a hefty price tag.

“From my experience there are expats here from all over the world — lots of American, French, Australian, British and Japanese,” she said.

In 2012, 34% of Israelis aged 20 and over travelled abroad at least once in the previous 12 months, according to the Central Bureau of Statistics.

Taking care of business

Of course, not all visitors to the city are tourists. Many are mixing business with pleasure, said Hila Oren, Founder and chief executive officer of Tel Aviv Global, a city-owned company managed by the mayor’s office.

“Our biggest conference in the field of innovation takes place every year in September, the DLD Tel Aviv Innovation Festival,” she said. She added that about 10,000 people are expected to attend this year, 2,000 of them from abroad.

Hugo Bieber, Chief Executive of UK Israel Business, a bilateral chamber of commerce, said global private equity firms like Apax Partners, invest millions in the Israeli market.

Apax, which was ranked the 7th largest private equity firm in 2012 by Private Equity International, has invested $1.2bn in Israel since 2005, Reuters reported. Investments include an undisclosed amount in Tnuva Food Industries, the largest food manufacturer and distributor in Israel, which it sold in 2014 to China’s Bright Group, and Bezeq, one of Israel’s largest telecommunications providers.

Getting in the door

A look at the types of visas available...

Visitor: Some passport holders such as American, Canadian, European, can easily obtain a 90-day tourist visa upon arrival.

Student: A student visa is granted if you've been accepted into an Israeli university, and can prove you're able to cover tuition and living expenses.

Worker:  Professionals who want to work in Israel for 90 days or less can be sponsored by a foreign company and receive expedited processing. Long-term work visas require proven skills and sponsorship by an Israeli company.

Partner: Foreigners who can prove that they are in a serious long-term relationship with an Israeli citizen can apply for an open work visa.

And, seed funding is set to rise as the government announced plans to expand and simplify tax breaks for investors in early stage start-ups.

Bieber said Israelis are seen as good bets for producing and creating technology. “You’re talking about people that aren't afraid to take risks, that try to break things so they can make them better, that have the discipline and mentality to really push things, to see a challenge as an opportunity, and don’t take no for an answer,” he said.

It seems to be paying off. Israeli tech companies boasted a record year in 2014, with 18 IPOs worth $9.8bn and 52 mergers and acquisitions worth $5bn, according to a report by PcW Israel. Israel is the second most important start-up ecosystem outside of the US, according to the annual Startup Ecosystem Index, published by Compass Inc, formerly Startup Genome, which sells benchmarking and reporting software.

This is the kind of place where, if you really assert yourself, the sky's the limit.

High-profile success stories such as Google’s acquisition of Israeli mapping company Waze in 2013 for an undisclosed sum, also help highlight opportunity in the thriving start-up scene.

Money matters

But innovative beachside living comes with a hefty price tag. Tel Aviv has the highest cost of living in the Middle East for expatriates, and was ranked the 18th most expensive expat city overall, according to a report by consulting firm Mercer.

Jewish immigrants to Israel who become olim, people of Jewish descent who immigrate to Israel and become citizens under Israel’s Law of Return, can receive financial benefits from the Israeli government, including rent subsidies, tax breaks, reduced university tuition fees and free health care.

But Tel Aviv’s high cost of living — particularly housing and food — makes relocating there difficult.

In order to live in Tel Aviv, Bar-El said many expats reduce their standard of living, get creative in the job market, or work remotely for foreign companies, often earning higher salaries than they would at an Israeli firm.

Belfer, a US citizen, initially arrived in Tel Aviv on a student visa after being accepted into a master’s program in conflict resolution at Tel Aviv University. But, after realising he would take a 50% pay cut to work after graduation, he decided to open his own company. Belfer was able to get a work visa based on his Jewish heritage.

“Though it’s not easy to make it in Tel Aviv, expats that bring a special skill set or start their own businesses have done well for themselves,” he observed. “This is the kind of place where, if you really assert yourself, the sky’s the limit.”

Off the clock

When you're not working, you can eat, drink, shop and party in and around the city, often in settings that juxtapose the historic with the new. There are many trendy restaurants and bars tucked away in 19th century Ottoman buildings in Jaffa. You can also head to Sarona, a 19th century German Templar Colony that has been converted into an outdoor commercial space, and sample Israeli wine in an underground sandstone winery.

Just 50km north of Tel Aviv is the ancient city of Caesarea, which features an antiquity park with ruins dating back to the 3rd century BC, an outdoor Roman theatre that hosts concerts and the ruins of the ancient aqueduct on the sands of the beach.

For those looking to go further afield, destinations such as the holy city of Jerusalem, the northern city of Haifa with the famous Bahai Gardens, and the southern city of Eilat, located on the Red Sea, are all within a few hours’ drive.

Cultural know-how

Israelis are known for being direct, Bieber said. “People aren’t afraid to give an opinion, both good and bad,” he said. “They’ll criticise, they’ll make their views clear — there’s no beating around the bush in Israel.” He adds that face time is important to building relationships with Israelis.

Luckily for those working in Tel Aviv, much of that face time can be done seaside. According to Oren, “The biggest deals and investments can be made at a cafe on the beach, while everyone is wearing flip-flops.”

To comment on this story or anything else you have seen on BBC Capital, please head over to our Facebook page or message us on Twitter.