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Company in Israel

General information

23%

Tax rate

4 weeks

Time of establishment of the company

None

Minimum capital

Israel is a state along the eastern shore of the Mediterranean. Jerusalem is the capital city, but in recent years Tel Aviv has taken over as a financial and economic centre. Israel, well-developed in terms of industry and modern technology, hosts foreign companies that want to have a strategic location at the gates of Europe. The country has significant potential in terms of investment in research and development.

What to keep in mind

Israel is suitable for various activities. It should be remembered that this is one of the countries with the highest number of start-ups. Regardless of this, the costs of setting up a company are relatively high, which may be due to the fact that Israel is not an offshore jurisdiction. Annual maintenance of the company on the other hand is relatively cheap and amounts to about EUR 300, excluding accounting.

Types of companies

A common company type is the TOV (Trust on vehicle), the new onshore Israeli tax planning structure that is actually a combining of two companies: a management company (whether established in Israel or not) and an underlying company in Israel.

 

Company registration procedure

Registration of the company:

  • Prepare the following documents, which must be notarized: application for registration of the company, articles of association with signatures of shareholders, declarations of directors on the ability to perform their function.
  • Registration of a company in the Companies Register
  • Registration of a company with the Ministry of Finance for tax purposes
  • Registration of the company with the Social Insurance Institute.

Shareholders:

The maximum number of shareholders is 50. A minimum of one shareholder is required to establish a company. Foreign shareholders are also allowed.

Management Board:

In addition to the shareholders, the company is managed by a director, who is required, or by a board of directors.

Registered office:

The company must have a registration address, telephone and mail redirection. It is also possible to have a stationary office (prices vary according to demand).

Time to set up a company:

The time to establish a company is about 4 weeks.

Capital:

No minimum capital requirements.

Taxes and finances

The corporate tax in Israel is 23%. Dividend tax paid to shareholders of companies is 30%, however it depends on the tax residency of the shareholder.  17% VAT applies only to services provided and goods sold on the spot. The accounts must be kept by a licensed accounting office.

Local labor law

Other information