top of page
Adv. Tamir Hodorov

5 Facts You Must Know about Israeli Company Formation

Updated: Feb 1

Opening a company in Israel has never been clearer and easier.


Opening an Israeli Company offers many advantages, making it an attractive destination for entrepreneurs who seek a dynamic business environment. Known as the "Start-Up Nation," Israel has cultivated a vibrant ecosystem that fosters innovation and technological advancements. The country boasts a highly skilled and educated workforce, with a strong emphasis on science and technology. Additionally, Israel's strategic location provides easy access to markets in Europe, Asia, and the Middle East. The government actively supports entrepreneurship through various initiatives, grants, and tax incentives, encouraging the establishment and growth of businesses. The collaborative culture in Israel's business community, coupled with a robust venture capital ecosystem, facilitates networking and investment opportunities. Moreover, the rich cultural diversity and historical significance of the region add a unique dimension to the entrepreneurial experience.


Without further ado, let's dive right in the 5 facts you must know about Israeli Company Formation.



Tel Aviv and Jaffa, the central hub of Israeli Business.



Fact 1: Directors and Shareholders, Secretaries


The first thing you should know, is that Israeli companies are just as companies in any developed jurisdition. The companies have shareholders, directors, CEOs etc. It has limted liability, just like LTDs and LLCs.


To Form a Company in Israel, the company must have only one director, an individual or a legal entity, and the minimum is 1 director. Likewise, the minimum shareholder is 1 and they can be either an individual or a legal entity.


There is great flexibility in Israel as to the identity of these posotions, as the director(s) or shareholder(s) may be the same person, and may also be 100% foreigners. As the matter of fact, the only limitations are if they are bankrupt per the Israeli law, or if they're nationals of any officially declared enemy state (currently only Lebanon, Syria, Iran and Iraq, with Iraq consistently recieving special permission every year).


As per secretaies of a company, this position is not mandatory in Israel. Indeed, it is not even a legally defined title.


So to summarize this point: 1 director, 1 shareholder, can be the same person, can be legal entities and can be foreigners.

Fact 2: Capital


Similar to the United Kingdom, minimum equity capital may be minimal, or even zero, in case you wish it to be so. Stated differently, the share par value may be zero. This dramaticly limits the liability of the shareholders, and makes the Opening of the Israeli Company very easy financial-wise, and constitutes a big advantage to small businesses and startups.


(In contrast, if you were to open a company in Germany, a minimum equity capital of EUR 25,000 must be injected to a special account in order to reeive a final "company number" as part of the incorporation. This policy appears to be a remnant of WW2, when at the time the policy of "you know who" was actually to wipe out all small businesses who couldnn't deposit large enough minimum equity capital, so as to strengthen the large companies in the country).


It will be well to point out that the size of the equity capital has no bearing whatsoever on the sentiment of any third-party to your comapny. In other words, there are no adverse implications as to whether you have a minimal or sizable equity capital.


Fact 3: Times and Costs

Times

Once the duly prepared documents are submitted to the state. the official time to open a company is about 7 days, but in fact the Israeli Companies Registrar works much faster. In rare cases we've seen that companies are registered in the same day in which their documents are submitted, particularly if such documents were submitted early in the morning.


Costs

The costs vary with the services of course, but they are comprised of state fees and our professional fees. You can easily check our "fee scheudle" page for the updated main costs.





Fact 4: Documents


The documents which are required to open a company are exactly as follows:

☐ passport & address of shareholder,

☐ passport & address of director (if different than shareholder).

☐ KYC form (some general "Know Your Customer" information about you and your new Israeli comapny).


In case either the shareholder or the director are going to be legal entities (an LLC/LTD company, a partnership, limited partnership, etc.), the additional documents are as follows:

☐ Apostilled certificate of incorporation + translation to English

☐ Apostilled articles of association + translation to English

☐ Apostilled certificate of good standing + translation to English

☐ Passport of company shareholder’s authorized signatory (if different from passport of director)


It should be noted, that the identifying documents must be sent as a good color scan. No phone pictures may be used, since phone pictures have problems of uneven shadeing, light flares, focus, distorted colors, edges of documents out of the frame, fingers inside the frame, etc.




Fact 5: Bank Account and Tax Registration

Bank Account

Once your new Israeli Company is formated, you will receive a Certificate of Incorporation, which will include your Private Company Number. Thereafter you may proceed to any Israeli bank, or even a foreign bank for that matter, and apply for a Corporate Bank Account.


It is well to note at this point that the account opening procedure may be done completely remotely, on the condition that a local authorized signatory is appointed. We can provide you this service as well, and you may read much more elaborated information upon visiting are "Bank Account Opening" page.


Tax Registration

After opening a bank account to your new Israeli Company, you can proceed to register your new company with the Israeli Tax Authorities. Apart from receiving ongoing accounting for the company, Israeli Tax Registration have one main requirement, which is appointing a local tax representative. And, once again, we can help with that requirement too. Upon the completion of such action, you will be able to fully trade in the local market, and your business can soar to its full potential. For further information on Tax Registration, please refer to the "Tax Registration" service page in this website.


Conclusion

To summarize, these are the main 5 facts about Opening a Company in Israel, and if you understood all, you are practically have a working knowledge about the subject.


As a postscipt, if you have any other question about Israeli Company Formation you may contact us by using the contact page, and we will happily respond as soon as possible. Alternatively, you may refer to any information in this website, which was professionally written by one of our incorporators. It will also be lovely to have below your thoughts and commends on this subject.

Open your new Israeli Company now.

47 views

Comments


bottom of page