Setup a company in Israel FAQs
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Why should my company consider setting up our subsidiary or
new headquarters in Israel?
For most companies looking to expand abroad, Israel offers a
range of benefits and advantages, including legal protection for
directors and shareholders, a recognised and respected corporate
infrastructure, and potential tax efficiencies. It is also
relatively easy to form a company in Israel, with a minimum
required share capital of just 1NIS (1US$ = 3.5 NIS aprox), and
it provides you with instant access to a large and talented
workforce – particularly in Israel and the surrounding area.
But, as with everything in business, to take advantage of the
opportunities available, you need to know what you’re doing.
If you consider import to your country (or anywhere else) you should
consider to register an
Israeli Corporation in order to insure your sales up to 10 years
with the
Israeli Export Insurance ASHRA
Read more
why incorporate in Israel
>>
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What kind of Company should I set up?
Most businesses in your situation set up a Limited company,
as it doesn’t require any investment capital. At its simplest,
the difference between a public and a private limited company is
that a public company is allowed to offer its shares on the open
market, while a private company isn’t. Talk to us if you’re not
sure where you stand.
Anyway, the most common Israeli Corporation is the Limited by
Shares Company (L.T.D.).
It is also allowed to register a Partnership and a
Voluntary Non-Profit Association
If you run a Company abroad and think about a subsidiary or a
branch in Israel, read the complete guide of
Foreign Company Registration Options in Israel
>>
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Can I set up a company in Israel if I’m not Israeli citizen?
Yes you can. You don’t have to be Israeli citizen to
establish a business in Israel, and neither do your directors
and shareholders.
However, varying tax implications mean that you do need to
carefully consider where you choose to manage and control your
company from.
Can I register a company in Israel with a Corporate
Shareholder?
Yes, no problem, we can do it for you.
Read more about:
Registering a
Company in Israel with a
Corporate
Foreign Shareholder >>
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How long does it take to set up a company in Israel and how
soon can it start trading?
To set up a company can be done within a week, providing you have
all the relevant information available. Legally, you will then be
able to start trading immediately. However, it can take time to set
up all the necessary bank accounts, tax registrations, payroll
systems, etc.
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What Company names are allowed?
Before starting we need to know the company name in order
to prepare the Incorporation Documents. You should provide a few
alternatives optional names.
The name cannot include the word "Assurance" or "Insurance"
unless the company director has an Israeli license to run an insurance
business.
After we prepare the documents for the Company
registration, we send them to the Registrar in the hope the name is
accepted.
If the name you suggested is acceptable by the laws of
Israel, still, the Registrar may decide it is too similar to another
registered company. Unfortunately it is impossible to check this by
phone or internet before we send the documents to the Registrar.
If you provide more than one name our guy will try to
register the company with the chosen names by order of preference.
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How many Shareholders and Directors are allowed / necessary
to Incorporate in Israel
Shareholders
An Israeli private limited company can have a minimum of 1 and
maximum of 50 shareholders. A director and shareholder can be the
same or a different person. The shareholder can be a person or
another legal entity such as another company or trust. 100% local or
foreign shareholding is allowed. New shares can be issued or
existing shares can be transferred to another person anytime after
the Israeli company has gone through the incorporation process.
Directors
There is no limit on the number local or foreign directors an
Israeli Company can appoint. Directors must be at least 18 years of
age and must not be bankrupt or convicted for any malpractice in the
past. There is no requirement for the directors to also be
shareholders, i.e. non-shareholders can be appointed directors.
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In order to set up a Corporation in Israel do we need to
travel to Israel?
No, we can do it for you, however, you will have to sign all the
incorporation documents in front of the embassy/consulate
representative.
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What documents do I need to provide in order to setup a
company in Israel?
Anti-money
laundering international law requires us to verify new clients. This
is called Know-Your-Client or KYC. We need to confirm a company's
existence and identify the individuals behind it. If you decide to
register the company with nominees, all we need now is a scanned
copy of the passport of the person/s behind this company (any
director/s or shareholder/s).
when we transfer
the company to your hands we will need to show the Registrar:
1. A true copy of your passport
2. A utility bill
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Does the company need to provide a registered address
Yes, registered address is necessary for the registration.
The registered address must be a physical address (can be either
a residential or commercial address) and cannot be a P.O. Box.
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Can you help me establish a registered address, trading address and
phone number in Israel?
Of course. At Hanner-Ofer, Law Firm, we are happy
to provide the address for your registered office and/or your trading
address. In addition, we can offer you a phone number for voice or fax
communication, as well as a forwarding service to help you deal with your
mail and calls as required, ensuring that your Israel customers and
suppliers remain in close contact with you.
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Do I need to appoint a Company
Secretary?
For private limited companies it is not a legal obligation.
However, it is
still legally necessary to do everything a Company Secretary would do – such as
maintaining statutory records, completing and filing forms, organising meetings
and resolutions, maintaining contact with the authorities, and communicating
with all company stakeholders. So if you didn’t appoint a Company Secretary,
these duties would fall to you and your Board of Directors.
If you start with a very small business, we think you will not
need to appoint any Secretary.
Appointed by the Board of Directors, the Company Secretary is the
administrative officer in charge of ensuring that all legal and financial
aspects of the business are run correctly and efficiently – overseeing good
corporate governance and compliance with all regulatory responsibilities. He or
she also works to maintain the statutory registers, and acts as intermediary on
all issues between the company’s shareholders and its board. At Hanner-Ofer, Law
Firm, we are able to act as Company Secretary on behalf of our clients,
attending board meetings and advising on all corporate legal and financial
issues.
Does the new company needs to apply to the chamber of commerce
or any other authority?
No, nothing, unless you open more than an office in Israel the
new company won't need any license in order to operate.
Bank account
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What do I need in order to
open a business bank account in Israel, and how long will it take?
You will need to
provide the originals of a number of official documents, including your passport
and a true copy of the certificate of incorporation of your new Israeli Company.
Don't worry, we will help you with this.
Registrar Fees
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How much are the Registrar fees?
About $750.- for the first year (included in the registration
fees) and about $300.- for every next year.
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When does the Company need to pay the annual fees to the
Registrar?
Before the end of February every year for the same year.
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What happens if the Company lucks to pay the
Registrar fees
The Registrar fees will increase with (about) $100 if paid
after the end of February each year (to $400.- approximately).If the company doesn't pay the Registrar
fees for a few years, the Registrar will declare the Corporation,
Shareholders and Directors as lawbreaker. In this case, the Company will
not be able to make any changes and the Shareholders and Directors won't
be able to register another company or be part of another company. If
the company continue not to pay the Registrar fees, the Registrar
might Impose a fine on the Directors and Shareholders What are
the minimum Paid-Up Capital obligations
There is no paid up capital obligations in Israel. Nominees
A nominee Shareholder is a person or entity listed as the
holder of the securities or shares of a corporation rather than its
actual owner, which allows them to remain anonymous.
Read more about Nominee
Shareholders >>
A nominee Director is a person or entity who acts as a
non-executive director on the board of directors of a firm, on
behalf of another person or firm. Also, a resident who lends his
name to a non-resident as a trustee on the board of a Corporation.
Read more about Nominee Directors
>>
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Can your firm provide Nominee Shareholders?
At Hanner-Ofer we fully own a Trust Entity who acts as nominee
shareholder especially for our clients.
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Can your firm provide Nominee Directors?
Company Directors have a certain responsibilities towards
the company. Since the Company Director has
responsibilities to keep records and submit necessary documents/returns
to Government Departments i.e. Inland Revenue and Companies
Registrar; it is normal for small companies to delegate this
responsibility to other professional companies.
Hanner-Ofer, Israeli Law Firm
provides this professional service to a small number of corporations. The
essence of a nominee service is that it is the names of the nominee
directors and/or shareholders that are indicated in the corporate
documentation, according to their designation. Thus the names of the
company's beneficial owners are not disclosed to the Companies Registry,
so that clients are ensured the utmost confidentiality.
Please Read carefully the
Nominee Director Duties >>
Israeli Accountant,
Bookkeeping, Taxes, and VAT
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Do we have to add VAT to the incorporation services if the
Shareholders and directors are not Israeli citizens?
Unfortunately, yes. This question is asked with every with new
company we register for foreign clients.
A few years ago we sent a query to the Value Added Tax
Authorities and the answer was, that since it comes to establish an
Israeli company the foreign client has to pay VAT for the service.
however, the good news are that this tax is refundable when the
Corporation start its business in Israel.
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When does Israel financial year begin and end?
For individuals and corporations, the financial year runs from January 1st.
to December 31.
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What is the rate of corporate income tax in Israel?
At the moment, all Israel corporate incomes are subject to a flat rate tax
of 25% on earnings
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What are the charges for accounting, auditing of the
Company in Israel?
It depends: At the beginning, when the Company just starts
business it shouldn't be more than US$ 1,000.-/year.
Later, the accounting and bookkeeping will increase with the
business volume of the company.
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Can a company held by foreign citizens apply for a VAT
opening file?
Yes, but with a local resident representative.
Read more about the VAT
Representative for a company held by foreign citizens
>>
There are a number of options available to you:
Close down –
Whether you do
this or not will mainly depend on the status of the assets and liabilities of
the company, but provided it is solvent you can apply to Israel trade register
to have the company struck off and dissolved, or to appoint a Liquidator.
Remain dormant –
If you only need it to hold an asset such as a trademark or
a name, or if you think you may wish to start trading again sometime in the
future, you can choose to ‘mothball’ your company – keeping it in a dormant
state while maintaining its existence. At Hanner-Ofer, Law Firm, we offer a
fixed-fee service for managing dormant companies.
Sell –
If you wish to sell your company, we can help you to prepare the
necessary paperwork, including share sale agreements and all other documents and
returns.
Dormant Corporation
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What will be the Registrar fees for a dormant Israeli
Corporation
The same as an active corporation: about $300.- for every year.
However, a dormant company does not have to file to the tax
authorities, but still needs to report to the Registrar.
If you still have questions or need clarifications, don't
hesitate to contact me. |
