How To Start A Business In Israel?

Israel is well known for its highly advanced technology sector and the country overcomes the challenges set forth by limited land area and natural resources by working on human resource development. The country has a talented workforce that attracts many investors and businesses.

In this article, we are offering a brief guide to starting a business in Israel.

Business Entities In Israel

Here is a list of the important business entities in Israel.

Company

According to the Israeli Companies Ordinance, a company is defined as a corporation that is formed and registered in Israel by complying with the Israeli law. The company has to be registered with the registrar of Companies. Although Hebrew and Arabic are the official languages of the country, corporate documents written in English are also accepted but the Company registrar requires the Articles of Association to be translated to Hebrew too. You can contact a reputed Israeli law firm to get assistance in the process of registration.

Foreign Company

A company that has its headquarters overseas can establish a local office or branch in Israel if it has been registered as a foreign company with the Registrar of Companies within a month of its establishing.

For the purpose of registration, a foreign company is required to submit all necessary documents but a private company is not obligated to publish its financial statements.

Partnership

As per the Partnership ordinance, a partnership is defined as an entity that consists of persons who agreed to form a partnership. Foreign partnerships are also allowed to operate in Israel.

Cooperative

Business entities of this kind are usually found in transportation, agriculture, and some marketing operations related to agricultural products. Moshav and Kibbutz are some examples of cooperatives in agriculture.

Self Employed

Self employed persons work for themselves and the rules of business registration apply in this case as well.

Non-Profit Organization

Common examples of non-profit organizations include hospitals, academic institutions, municipalities and charitable organizations. Entities of this kind are subject to a different set of laws that deal with the formation and method of operation of such an organization.

How To Register A Business In Israel?

In order to register with the Registrar of Companies, businesses have to submit the following documents.

  • Form of the company registrar: It is an application form that is to be filled and submitted for registering the company.
  • Memorandum of association: It stipulates the corporate identity of the company, its key objectives, obligations of the shareholders and the shares that are issued.
  • Articles of Association: These are the rules of conduct that are to be followed by the company.
  • Registration fee: After the registration fee is paid and the registration procedure is over, the company will be issued a certificate of incorporation and a 9 digit company number.

The Israel government offers various benefits and tax breaks to create a business-friendly environment that can improve the sustainability and growth of businesses.