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  • Form of entity

    Company

    Separate and distinct legal entity. Must be registered with the Israeli Registrar of Companies. Managed by a board of directors, which is responsible for making major business decisions and overseeing the general affairs of the company. Directors are appointed by the shareholders of the company. The general manager, if appointed (appointment is not required), is appointed by the board of directors and runs the day-to-day operations of the corporation. Other officers may be appointed.

    Branch / representative office

    A foreign corporation conducting business in Israel must register as a Foreign Company with the Israeli Registrar of Companies. The Foreign Corporation is regarded as the same legal entity as the Original Entity.

    Last modified 1 Jul 2024

  • Entity set up

    Company

    • Unlimited number of shareholders. However, having over 50 shareholders will subject the company to different reporting requirements.
    • Generally no personal liability of the shareholders.
    • Taxed on its earnings at a corporate level and shareholders are taxed on any distributed dividends.
    • Typical charter documents include: Certificate of Incorporation; and Articles of Association.
    • Board of directors has overall management responsibility; general manager has day-to-day responsibility within the framework set by the board of directors and is subject to the board’s supervision.
    • Shareholders typically purchase shares in the corporation, either common or preferred.
    • The Company is subject to various annual corporate maintenance requirements such as: annual fee to the Registrar of Companies, appointment of auditors and filing of an annual report with the Registrar of Companies.

    Branch / representative office

    • Registration of an already existing corporate entity (excluding a partnership) organized outside of Israel (the Original Entity) with the Israeli Registrar of Companies
    • Defined under the Israeli Companies Law – 1999, as a “Foreign Company”, and
    • Not a separate legal entity (same entity as the Original Entity)

    Last modified 1 Jul 2024

  • Minimum capital requirement

    Company

    No minimal requirement.

    Branch / representative office

    Not applicable.

    Last modified 1 Jul 2024

  • Legal liability

    Company

    Shareholders of a company are generally not liable for the debts of a company aside from their financial contribution to the company.

    Branch / representative office

    Same as the original entity.

    Last modified 1 Jul 2024

  • Tax presence

    Company

    A company is taxed at 2 levels. First, the company pays a corporate tax on its corporate income; shareholders are then taxed on dividends distributed by the company (if distributed).

    Branch / representative office

    Only taxed at the corporate entity level on income.

    Last modified 1 Jul 2024

  • Incorporation process

    Company

    Filing of various documents with the Israeli Registrar of Companies, including the company’s articles of association and other incorporation forms.

    Branch / representative office

    Filing of various documents with the Israeli Registrar of Companies, including a Hebrew translation of the Original Entity’s incorporation documents.

    Last modified 1 Jul 2024

  • Business recognition

    Company

    Well regarded and widely used.

    Branch / representative office

    Well regarded and not uncommon for corporation with limited local presence (eg limited sales or marketing activity).

    Last modified 1 Jul 2024

  • Shareholder meeting requirements

    Company

    Required to hold a general meeting of the shareholders every year and no later than 15 months following the previous general meeting (unless otherwise determined in the articles of association). Unanimous written consents, in lieu of meetings, are generally permitted.

    Branch / representative office

    Not applicable.

    Last modified 1 Jul 2024

  • Board of director meeting requirements

    Company

    The board convenes in accordance with the company’s requirements and at least once a year. Unanimous written consents, in lieu of meetings, are generally permitted.

    Branch / representative office

    Not applicable.

    Last modified 1 Jul 2024

  • Annual company tax returns

    Company

    Must annually file tax returns.

    Branch / representative office

    Must file tax returns annually.

    Last modified 1 Jul 2024

  • Business registration filing requirements

    Company

    Depending on the type of business and is issued by the municipality in which the company’s facilities are located.

    Branch / representative office

    Depending on the type of business and is issued by the municipality in which the branch’s facilities are located.

    Last modified 1 Jul 2024

  • Business expansion

    Company

    No need to change as business expands.

    Branch / representative office

    No need to change as business expands. However, as the business expands, it may make sense to incorporate a local subsidiary instead of the representative office.

    Last modified 1 Jul 2024

  • Exit strategy

    Company

    Voluntary liquidation is generally performed vis-à-vis the Registrar of Companies. Involuntary liquidation will generally require the involvement of the court and/or the Official Receiver.

    Branch / representative office

    Not applicable.

    Last modified 1 Jul 2024

  • Annual corporate maintenance requirements

    Company

    Annual meetings of the board of directors and of the shareholders; filing of annual report with the Registrar of Companies; payment of annual fee to the Registrar of Companies. The company is also required to notify the Registrar of Companies of various changes within the company on an ongoing basis (eg, changes in share capital, shareholdings and directors).

    Branch / representative office

    Required to notify the Registrar of Companies of various changes within the branch and/or the Original Entity (eg, changes in the organizational documents or board of directors of the Original Entity, changes relating to the authorized representative of the branch).

    Last modified 1 Jul 2024

  • Director / officer requirements

    Company

    Minimum of 1 director. General manager and other officers are not required.

    Branch / representative office

    Not applicable.

    For more information on directors’ duties, see our Global Guide to Directors’ Duties.

    Last modified 1 Jul 2024

  • Local corporate secretary requirement

    Company

    None beyond the required director.

    Branch / representative office

    Required to register the name and address of a person residing in Israel who is authorized to accept judicial documents and other notices on behalf of the Foreign Company.

    Last modified 1 Jul 2024

  • Local legal or admin representative requirement

    Company

    None beyond the required director.

    Branch / representative office

    Not applicable.

    Last modified 1 Jul 2024

  • Local office lease requirement

    Company

    None required.

    Branch / representative office

    Not applicable.

    Last modified 1 Jul 2024

  • Other physical presence requirements

    Company

    None required.

    Branch / representative office

    Not applicable.

    Last modified 1 Jul 2024

  • Sufficiency of virtual office

    Company

    Insufficient. While physical presence is not required, a company must maintain a valid local registered mailing address.

    Branch / representative office

    Insufficient. While physical presence is not required, a Foreign Company must be represented by at least 1 person who regularly resided in Israel.

    Last modified 1 Jul 2024

  • Provision of local registered address by law firm or third-party service provider

    Company

    Allowed.

    Branch / representative office

    Allowed.

    Last modified 1 Jul 2024

  • Provision of local director or corporate secretary by law firm or third-party service provider

    Company

    Allowed.

    Branch / representative office

    Not applicable. 

    Last modified 1 Jul 2024

  • Nationality or residency requirements for shareholders, directors and officers

    Company

    None.

    Branch / representative office

    Required to execute a power of attorney in favor of a person regularly residing in Israel, authorizing him to act in its name.

    Last modified 1 Jul 2024

  • Restrictions regarding appointment of nominee shareholders or directors

    Company

    None.

    Branch / representative office

    Not applicable.

    Last modified 1 Jul 2024

  • Summary of director's, officer's and shareholder's authority and limitations thereof

    Company

    Directors are elected by the shareholders and are the highest authority in the management of the company, and govern the organization by establishing broad policies and objectives. In contrast, the general manager is appointed by the directors to oversee day-to-day operations of the company.

    Branch / representative office

    Required to execute a power of attorney in favor of a person regularly residing in Israel, authorizing him to act in its name.

    Last modified 1 Jul 2024

  • Public disclosure of identity of directors, officers and shareholders

    Company

    Identity of directors and shareholders is publicly disclosed.

    Branch / representative office

    Identity of directors is publicly disclosed.

    Last modified 1 Jul 2024

  • Minimum and maximum number of directors and shareholders

    Company

    Shareholders – there must be a minimum of 1 shareholder, and while there is no maximum number, if a private company is not limited to less than 50 shareholders then it must file a balance sheet together with its annual report to the Registrar of Companies. Additionally, offering securities to over 35 individuals or entities may subject the company to various securities regulations and requirements (similar to those imposed on publicly traded companies).

    Directors – there must be at least 1 director and there is no maximum number.

    Branch / representative office

    Not applicable.

    Last modified 1 Jul 2024

  • Minimum number of shareholders required

    Company

    There must be at least 1 shareholder.

    Branch / representative office

    Not applicable.

    Last modified 1 Jul 2024

  • Removal of directors or officers

    Company

    Directors are generally removed by a majority vote of the shareholders who appointed them. The board of directors appoints and removes the general manager.

    Branch / representative office

    Not applicable.

    Last modified 1 Jul 2024

  • Required and optional officers

    Company

    None required. Any optional officer is allowed.

    Branch / representative office

    Not applicable.

    Last modified 1 Jul 2024

  • Board meeting requirements

    Company

    The board convenes in accordance with the company’s requirements and at least once a year. Unanimous written consents, in lieu of meetings, are generally permitted.

    Branch / representative office

    Not applicable. 

    Last modified 1 Jul 2024

  • Quorum requirements for shareholder and board meetings

    Company

    Shareholder meetings – Unless otherwise determined in the company’s articles of association, the presence of at least 2 shareholders holding at least 25 percent of the voting rights is required.

    Board meetings – Unless otherwise determined in the company’s articles of association, the presence of a majority of the directors is required.

    Branch / representative office

    Not applicable.

    Last modified 1 Jul 2024

  • Must a bank account be opened prior to incorporation, and must the bank account be local?

    Company

    It is not possible to open a bank account prior to incorporation. Once opened, the account is not required to be local (though recommended for convenience purposes). A local bank account will be required in order to open tax files (tax files are required in order to have any significant business activity and engage employees, among others).

    Branch / representative office

    It is not necessary to open a bank account prior to registration. Once opened, the account is not required to be local (though recommended for convenience purposes). Bank account will be required in order to open tax files (tax files are required in order to have any significant business activity and engage employees, among others).

    Last modified 1 Jul 2024

  • Auditing of local financials. If so, must the auditor be located in local jurisdiction, and must the company's books be kept locally?

    Company

    Companies are generally required to appoint an auditor. The auditor must be an Israeli certified accountant and the books must be in Hebrew and kept at the company’s registered offices.

    Branch / representative office

    Yes.

    Last modified 1 Jul 2024

  • Requirement regarding par value of stock

    Company

    Nominal value is not required. However, when used the nominal value will generally not be lower than NIS0.01 per share.

    Branch / representative office

    Not applicable.

    Last modified 1 Jul 2024

  • Increasing of capitalization if needed

    Company

    Effectuated by shareholder action.

    Branch / representative office

    Not applicable.

    Last modified 1 Jul 2024

  • Summary of how funds can be repatriated from your jurisdiction (ie dividends or redemption)

    Company

    Generally by, for example, distribution of dividends or return of shareholder loans, among others.

    Branch / representative office

    Generally by, for example, distribution of dividends or return of shareholder loans, among others.

    Last modified 1 Jul 2024

  • Restrictions on transferability of shares

    Company

    Shares can be transferred to shareholders or other third parties, but are generally subject to the board of directors’ consent and registration of the transfer in the company’s shareholder register. The articles of association may apply various restrictions on transfer such a “right of first refusal” or “co-sale right.”

    Branch / representative office

    Not applicable.

    Last modified 1 Jul 2024

  • Obtaining a name and naming requirements

    Company

    Names cannot be reserved and are subject to the approval of the Registrar of Companies. Names cannot be misleading, insult the public or its feelings and cannot contain registered trademarks unless given the consent of the holder of such trademark.

    Branch / representative office

    The branch will be registered under the same name as the Original Entity.

    Last modified 1 Jul 2024

  • Summary of "know your client" requirements

    Company

    To open a tax file, the company will need to have bank account and the bank will have the “know your client” requirements under Israeli anti money laundering laws.

    Branch / representative office

    To open a tax file, the company will need to have bank account and the bank will have the “know your client” requirements under Israeli anti money laundering laws.

    Last modified 1 Jul 2024

  • Approval requirements for amending charter document

    Company

    The shareholders must approve any amendment by such majority as determined in the articles of association (simple majority, if not otherwise determined).

    Branch / representative office

    Not applicable.

    Last modified 1 Jul 2024

  • Licenses required to conduct business in jurisdiction

    Company

    Typically the only license required, if required, would be a business license issued by the municipality in which the company’s facility is located. However, the requirement of a business license, as well as other licenses and permits, is dependent on the type of business conducted by the company.

    Branch / representative office

    Typically the only license required, if required, would be a business license issued by the municipality in which the company’s facility is located. However, the requirement of a business license, as well as other licenses and permits, is dependent on the type of business conducted by the company.

    Last modified 1 Jul 2024

  • Process of purchasing and utilizing a shelf company

    Company

    Not applicable.

    Branch / representative office

    Not applicable.

    Last modified 1 Jul 2024

  • Key contacts
    Benjamin Sandler
    Benjamin Sandler
    Partner Yigal Arnon & Co [email protected] T +972 2 623 9200 View bio
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Tax presence

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Israel

Company

A company is taxed at 2 levels. First, the company pays a corporate tax on its corporate income; shareholders are then taxed on dividends distributed by the company (if distributed).

Branch / representative office

Only taxed at the corporate entity level on income.

Last modified 1 Jul 2024

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