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Israel

Steps to Set Up a Company:

Israel

Choose a Business Structure

  1. Sole Proprietorship (עוסק מורשה): Single owner, full liability.
  2. General Partnership (שׁותפות כללית): Two or more partners, shared liability.
  3. Limited Partnership (שׁותפות מוגבלת): General and limited partners.
  4. Private Limited Company (חברה בע"מ - Ltd): Separate legal entity, limited liability.
  5. Public Limited Company (חברה ציבורית בע"מ): Separate legal entity, limited liability, shares can be traded publicly.
  6. Branch (סניף): A branch of a foreign company operating in Israel.
  7. Representative Office (משרד ייצוג): Limited to marketing and promotional activities, cannot conduct business transactions.

Register Your Company

  1. Choose a Company Name: Ensure it is unique and follows naming regulations.
  2. Prepare the Articles of Association: Outlining the company’s structure and rules.
  3. Notarize the Articles of Association: Required for company registration.
  4. Open a Bank Account: Deposit the initial capital required for the company type.
  5. Register with the Companies Registrar: Submit the incorporation documents and pay the registration fee.
  6. Obtain a Business License: Depending on the business type, you may need a business license from the local municipality.
  7. Register with the Tax Authority: Obtain a Tax Identification Number (TIN) and register for Value Added Tax (VAT) if applicable.

Open an Israeli Bank Account

  1. Set Up a Business Bank Account: Necessary for managing business finances.

Obtain Necessary Licenses and Permits

  1. Check Industry-Specific Requirements: Depending on the nature of your business, you may need specific licenses or permits.

Comply with Israeli Employment Laws

  1. Employment Contracts: Draft contracts that comply with Israeli labor laws.
  2. Register with the National Insurance Institute (NII): For social security purposes.
  3. Health and Safety Regulations: Follow guidelines from the Ministry of Labor, Social Affairs and Social Services.

Accounting and Reporting

  1. Set Up an Accounting System: Maintain accurate financial records in compliance with Israeli accounting standards.
  2. Annual Financial Statements: Prepare and file annual financial statements.
  3. File Annual Tax Returns: Submit annual tax returns to the Israel Tax Authority.

Laws and Regulations to Consider

Corporate Law

  1. Companies Law (חוק החברות): Governs the formation and operation of companies.
  2. Partnership Ordinance (פקודת השותפויות): Governs partnerships.

Tax Law

  1. Income Tax Ordinance: Governs corporate income taxation.
  2. Value Added Tax (VAT) Law: Governs VAT regulations.

Employment Law

  1. Labor Law (חוקי העבודה): Governs the terms and conditions of employment contracts.
  2. National Insurance Law: Governs social security contributions.
  3. Occupational Health and Safety Regulations: Sets health and safety standards for workplaces.

Data Protection Law

  1. Protection of Privacy Law (חוק הגנת הפרטיות): Governs data protection and privacy.

Environmental Law

  1. Environmental Protection Law: Governs environmental protection and sustainability practices.

Intellectual Property Law

  1. Patents Law: Governs the protection of patents.
  2. Trademarks Ordinance: Governs the protection of trademarks.
  3. Copyright Law: Governs the protection of copyrights.

By following these steps and adhering to the relevant laws and regulations, you can successfully establish and operate a company in Israel. It’s advisable to consult with legal and financial experts to ensure full compliance and smooth setup.

 

When to Consider Setting Up a Company in Israel:

  1. Strategic Geographic Location: Israel’s location provides access to markets in Europe, Asia, and Africa.
  2. Innovation Hub: Israel is known for its high-tech industry and innovation, making it an attractive destination for tech startups and R&D centers.
  3. Skilled Workforce: Access to a highly educated and skilled labor pool, particularly in technology, engineering, and sciences.
  4. Favorable Investment Climate: Israel offers various incentives for foreign investment and a supportive regulatory environment.
  5. Developed Infrastructure: Israel has a well-developed infrastructure, including transportation, telecommunications, and energy.
  6. Stable Political Environment: Israel offers a stable political environment, providing a secure backdrop for business operations.
  7. Quality of Life: Israel offers a high standard of living, excellent healthcare, and a vibrant cultural scene, making it attractive for expatriates and international employees.
  8. Access to Funding: Israel has a strong venture capital presence and offers various funding opportunities for startups and businesses.

By considering these factors and aligning them with your business goals, you can determine if setting up a company in Israel is the right move for your organization.

DALL·E 2024-07-08 12.02.10 - An illustration promoting Grant and Grahams global support for setting up companies. The image features a globe with various business icons around it
How to Set Up a Company

Step-by-Step Guide: How to set up a Company

Setting up a company involves a series of crucial steps that require careful planning and execution. From choosing the right business structure to understanding legal and tax obligations, each stage is vital to the successful launch and operation of your business. This step-by-step guide provides a comprehensive overview of the key processes involved in establishing a company, ensuring you have the knowledge and tools needed to navigate the complexities of business formation.