An Israeli company is like any other asset. For example if you have a car, it requires an annual state fee, and fixing of technical problems at the garage, or maybe switching tires, etc. Likewise, if you have a house or an apartment, you as an owner of that property should pay periodic property tax or municipal tax, as well as some house maintenance every now and then.
It's the same is the Israeli company - It requires a periodic basic maintenance.
So let's now discuss the three annual maintenance requirements for every Israeli company.
The Annual State Fee
Each year every Israeli company must pay its annual state fee, regardless of its status.
As of 2024, the state fee is USD 617 before 31st of March including processing and handling, or USD 767 after 31st of March and until 31st of December of each year.
After the 31st of December, the annual state fee becomes overdue, and troubles begin.
What Happens if an Israeli Company doesn't Pay its Annual State Fees?
As mentioned above, after the 31st of December, the annual state fee becomes overdue.
A company which does not pay its overdue state fees first receives a warning.
If the debt is not paid, thereafter its status becomes very bluntly a "law breaker" company.
if the debt is not paid still, at that point the state starts collection proceedings by the execution office. These proceedings are expensive, on top of the accrued debt, and it is highly recommended to avoid such trouble.
Submission of the Annual Report (Israeli Company Annual Maintenance)
The annual report has nothing to do with tax filings. It is actually a legal form which tells the state about any changes in the company. Some of the changes may be changes of directors, changes of shareholders, change registered address, changes in the company's business, and much more.
You can check our fee schedule page for the cost of filing the annual maintenance report.
In various countries there is the equivalent of the annual report form: in the U.K it’s the "confirmation statement". In California it’s the "statement of information". In Hong Kong its called "NAR1".
What Happens if an Israeli Company Doesn't Submit its Annual Report?
If the company doesn't submit its annual report, bad things start to happen. In essence the company may receive a heavy penalty, which is in a completely out of proportion to the simplicity of filing the annual report. A penalty as high as of USD 2,000 may be imposed, for not filing the annual report even during a short period of merely two consecutive years.
Hereunder is an example of a penalty imposed on such company for lack of submitting its annual returns for a short period of only two years:
Registered Address Subscription Renewal
Each company must have a registered address. While having a registered address it is not an annual requirement but rather a permanent requirement, in most of the cases the Israeli company actually pay for an annual subscription of a registered address.
We can provide such annual subscription of a company registered address (you can check the fee schedule for our fees), and so there should be an annual renewal of the subscription of the company's registered address.
Comments