Company Registration in Israel- An Overview Israel is a small country which is present in the south-eastern part of the Mediterranean Sea. The main cities in Israel are Tel Aviv and Jerusalem. Jerusalem is considered as the prominent government capital of Israel, whereas Tel Aviv is a prominent business hub. Technology developments have been embraced by all parts of the country. Due to these factors an individual can go for the process of company registration in Israel. Israel has been recognised as one of the fastest developing countries in the world. This is due to innovative methods and modern standards which are followed. There are no restrictions in terms of foreign investment in Israel. Foreign direct investment is encouraged in the country through government support. International companies consider Israel to set up technology hubs and R & D centres due to latest developments. Due to all these factors, an investor would want to set up a company in Israel. Benefits of Company Registration in Israel The following are the benefits of company registration in Israel: Modern Facilities Israel offers world class infrastructure and different form of facilities for companies to operate. Due to this, many global companies prefer Israel as a destination for carrying out business. Technology Centres Most companies that set up branch offices in Israel due to diverse technology. Technologies in the areas of agriculture, ICT, information technology and food processing have a strong presence in Israel. Due to this, companies prefer investing in Israel. Added to this, the government also provides support for the development of different forms of business. Ease of Doing Business Different types of companies can be set up for carrying out business in Israel. Due to this, there is ease of doing business in Israel. Talented workforce Israel has a talented and productive workforce which offers corporations an opportunity to appoint educated and skilled employees who play a crucial role in company’s long term success. Eligible Business Structures for Company formation in Israel The following are the eligible business structures for company incorporation in Israel: Branch Office Branch office is an entity which is formed under the parent company. There is no separate legal entity for the branch office, as it an extension of the parent company. The liability of the shareholders and directors of this company is limited to a particular extent. The branch office can carry out operations under the scope of the parent company. Representative Office A representative office would be started under the foreign parent company. However, the representative office can only carry out activities which include market research and being a liaison of the parent company. Limited Company A limited company is also known as a private limited company in Israel. This type of organisation has the status of limited liability. The directors and shareholders of the company have limited liability. This company would require to pay corporate tax. Annual compliance must also be filed by this type of entity. The general manager of the company would be required to run the operations of the business. Limited Liability Partnership This is also known as an LLP. The members of this form of entity are known as partners. The partners have limited liability. The profits and losses of this form of entity have to be shared by the partners. Partners would also have to pay personal tax. Eligibility Criteria for Company Formation in Israel The following eligibility criteria have to be sufficed for company formation in Israel: Minimum Capital There is no minimum capital required for forming any type of entity in Israel. Key Management Executives To form a private limited company in Israel, minimum one shareholder and one director is required. The shareholders do not need to be a resident in Israel. An Israeli national is not required to form a company. However, a foreign company which is opening a branch office or a representative office would require to appoint a representative. Name of the Company The name of the company must be unique and distinctive. The name must not represent any form of existing company. The name of the company must be in local language Hebrew and it also must be translated in English. Residence Requirements The shareholders do not need to be a resident in Israel. An Israeli national is not required for forming a company. However, a foreign company which is opening a branch office or a representative office would require to appoint a representative. Documents required for Company Registration in Israel The following documents should 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 in Israel. Name, address and national identification of the Israeli representative who has been appointed to get legal notices on behalf of the company. The Article of Association and its Hebrew translation certified by a notary. Information on the shareholders of the company. Details about the company’s name and business address; Procedure for Company Registration in Israel The following process is followed for Company Registration: Name of the Company Firstly the name of the company should be decided. The name of the company must be unique and distinctive. The name must not represent any form of existing company. The name of the company must be in local language Hebrew and it also must be translated in English. Fulfilling the eligibility criteria There are certain minimum requirements that needs to be fulfilled. The company is required to provide a physical address for the process of incorporation. To form a private limited company in Israel, the applicant would have to appoint at least one shareholder and one director. Filing application and documents submission Next step involves filing the application and submission of documents. The names of the directors and shareholders must be present along with their signature to register the company. If the directors and shareholders are not resident of Israel, then a copy of their passports must 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 to find any issues. Certificate of Incorporation If the concerned 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. Registration of Foreign Company in Israel A foreign company can open a representative office or a branch office in Israel. The incorporation procedure for a foreign company in Israel must be carried out, as if the company is being incorporated as a domestic company in Israel. The foreign office would first take a board resolution for incorporating a foreign company in Israel. If the resolution is vetoed then the company would have to appoint a local representative in Israel to carry out the procedures related to company formation in Israel. The company must make an application to the authority with the relevant documents for incorporating a foreign company in Israel. Post Registration Compliances for a Company in Israel Once the company is formed, there would be ongoing compliances to be followed. Such compliances have to be carried out as per the requirement of the authority: Corporate tax has to be paid on the income which is generated by the company. Then shareholders would be separately taxed for the dividends which are paid by the company. Currently the corporate tax levied on Israeli companies is 23%. Annual General meeting would have to be held every year. No more than 15 months time must be between two general meetings of the company. The provisions of these meetings would be considered in the articles of association of the company. Annual tax returns must be filed. All companies present in Israel must filed business registrations as required by the municipality of the particular locality. Annual Meetings of the Board have to be carried out every year. 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 an ongoing basis. Such compliances would also be carried out by the representative office and the branch office. Corporate secretary is required for a foreign company which have a representative office and branch office.