Israel is a state situated on the eastern shore of the Mediterranean Sea. It has been recognized as one of the rapidly developing countries in the world. This is due to innovative methods and modern standards which are followed.
Israeli corporate legislation takes the common law system as a factor. It makes quick registration of companies possible with a relatively small number of formalities. At the same time, the company may be engaged in any form of legal action. Due to these factors, an investor would want to set up a company in Israel.
Benefits of a Company Registration in Israel
- Modern Facilities – Israel offers world-class infrastructure and various forms of facilities for companies to operate.
- Technology Centres- Most companies set up branch offices in Israel due to its diverse technology.
- Ease of Doing Business with Israel – Different types of companies can be set up for carrying out business in Israel.
- Talented workforce – Israel has a talented and productive workforce which offers corporations a chance to appoint educated and skilled employees who play important roles in the company’s long term success.
Business Structures for a Company formation in Israel
- Branch Office – A branch office is an entity that is established under the parent company. There is no diverse legal entity for the branch office, as it is an extension of the parent company and the liability of the shareholders and directors of this company is restricted to a particular extent.
- Representative Office – A representative office would be launched under the foreign parent company. The representative office can only carry out actions that include market research and being a liaison of the parent company.
- Limited Company – This type of organization has the status of limited liability. The directors and shareholders of the company have limited liability. Annual compliance must be filed by this type of entity and the general manager of the company would be required to carry out the operations of the business.
- Limited Liability Partnership – The members of this form of entity are known as partners, and the partners have limited liability. The profits and losses of this form of entity have to be shared by the partners. Partners would also need to pay personal taxes.
Primary requirements for Company Formation in Israel
- There is no minimum capital proposed for forming any type of entity in Israel.
- At least, a director and a shareholder are required.
- Shareholder and director should not necessarily be residents of Israel.
- The founding documents are authorized to be registered in English but the Charter of the company must be in Hebrew.
- Company Name should be chosen in Hebrew, however, English translation can also be registered. The title must not contain such words as royal, government, cooperative, municipal, chamber of commerce, society of association, and others.
- Company Name of LLC in Israel should essentially include the abbreviation, LTD.
- The registration procedure requires an attorney’s certification of the signature of the registering person.
If the company has non-resident owners or directors, its registration initially takes place on behalf of local incorporators, and only after that, all the essential changes shall be carried out.
Documents required for Company Registration in Israel
The following documents must be submitted in order to legally register a company in Israel:
- List of the directors of the company, including their passport numbers.
- Power of attorney form bestowing an Israeli representative the responsibility for officially representing the company.
- Name, address, and national identification of the Israeli representative who has been authorized to get legal notices on behalf of the company.
- The Article of Association and its Hebrew translation certified by a notary.
- Data on the shareholders of the company.
- Details about the company’s name and business address.
Procedure for Company Registration in Israel
- Name of the Company – Firstly the name of the company should be decided. The name of the company must be unique and distinctive. It must be in the local language, Hebrew, and additionally, it must be translated to English.
- Fulfilling the eligibility criteria – The company is expected to provide a physical address for the process of incorporation. To form a private limited company in Israel, the applicant must appoint at least one shareholder and one director.
- Filing application and documents submission – The Next step includes filing the application and submission of documents. The names of the directors and shareholders must be present along with their signatures to register the company. If the directors and shareholders are not residents of Israel, then a copy of their passports should be provided. The documents along with the application form shall be submitted online for company formation in Israel. Once this is carried out, the authority will verify the application along with the documents.
- Certificate of Incorporation – Once the appropriate authority approves your application, you will receive a certificate of incorporation for the company. Along with the certificate of incorporation, you would also receive a verification stamp.
Post Registration Compliances for a Company in Israel
Once the company is formed, there would be continuous compliances to be followed. Such compliances have to be carried out according to the requirement of the authority:
- Corporate tax has to be paid on the income generated by the company.
- Annual General meeting would have to be held every year. The provisions of these meetings would be considered in the articles of association of the company.
- Yearly tax returns must be filed.
- All companies present in Israel must file business registrations as required by the municipality of the specific locality.
- Annual reports have to be filed with the Israeli registrar of Companies.
- If there are any changes with the company, the same has to be filed with the ROC on a continuous basis.
- Corporate secretary is required for a foreign company which has a representative office and a branch office.
Israel is a small country but offers immense opportunities in the areas related to technology development and research. If you want to take advantage of the opportunities and incorporate your company in Israel, contact your Damalion expert now to get started.
