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The governing law in Israel for incorporation is the Companies Ordinance of 1983. This is based on British law since Palestine was part of the British Empire before Israel was recognized as a nation. Forming an Israeli limited company or corporation can include private or public companies, limited by shares or guarantees, unlimited or foreign.
Currently, a new Companies Law is up for debate in the Israeli government. If it passes, many anticipate the law will make Israeli legislation more similar to western corporate laws and most likely more like American laws.
Benefits of an Israel Corporation
An Israel corporation can receive many benefits which include:
Process for Incorporating in Israel
When incorporating, contact an agent (such as this one). Your agent must do an Israeli business entity search from the government’s version of the Israeli Companies House to get Israeli company information ascertaining what other entities might already have the name you have chosen. Then they will file a Memorandum and Articles of Association with the Israel Registry. The documentation may be completed in English.
Offshore companies incorporating in Israel, because of anti-money laundering international law, must be verified by their registered agents. This law is referred to as Know-Your-Client, or KYC.
Israeli Corporate Name
As mentioned, the chosen corporate name must be unique and cannot be similar to any already existing corporate name. When preparing for company registration, it is advised to provide optional names to make sure the name registration process goes smoothly.
Certain words cannot be included in corporation names, like “assurance” or “insurance,” without the proper company licenses.
Israel Office Address and Local Agent
A new corporation in must have both a registered agent and office located in Israel. The corporation can have a main address anywhere in the world, but the office in Israel is necessary for process servers and official notices.
Israeli Corporation Shareholders
A minimum of one shareholder is required for an Israeli corporation, with up to a maximum of 50 shareholders. The shareholder can be the same person as the director. Shareholders can be either a private person or corporate entity, and also can be local or foreign. Once the incorporation process is complete, new shares can be issued and transferred to another individual.
Israeli Corporation Directors and Officers
At least one director must be appointed in an Israeli corporation. Israel does not limit the total number of local or foreign directors. Directors do not have to be shareholders, but Israel does allow it.
Authorized Capital of an Israeli Corporation
Israeli corporate law does not require a minimum registered capital. Also, corporations are not required to maintain or deposit money against their registered capital. The typical amount of shared capital is 100 NIS (New Israeli Shekel) share capital, divided into 100 shares of 1 NIS per value each.
Israeli Corporate Taxes
Israel corporate income tax is a flat rate tax of 25% on earnings.
Israeli Corporate Annual Fees
Annual corporation renewal fees cost between $300 USD and $750 USD, at the time of this writing, plus the registered agent and other possible costs.
Israeli Public Records
The names of the corporation’s shareholders and directors can be made available in public records, but nominee shareholders and directors can be chosen for confidentiality.
Accounting and Audit Requirements in Israel
The directors are responsible for keeping records. These records must be submitted to the appropriate governmental departments, like the Israeli Tax Authority and Company Registrar. These responsibilities can be outsourced to appropriate accounting companies.
Israeli corporations are required to keep accounts from the initial day of incorporation. Preparation of financial records is required for every calendar year. The corporation’s auditor and board of directors must approve these records, and they must also be presented at the corporation’s general meeting.
Corporations are required to appoint at least on auditor, who is a qualified local CPA. The appointment of the auditor occurs at the shareholders’ general meeting. Prior to the board of directors approving the financial records, the auditor must initially approve them at the annual meeting.
Annual General Meeting
An annual general meeting is required, and during this meeting, the auditor and board of directors must approve the financial records.
Time Required for Incorporation
It takes about one week to complete the incorporation process in Israel.
Israeli Shelf Corporations
Shelf corporations are available in Israel for those wishing to incorporate faster.
Israel Corporation Conclusion
The law governing corporations in Israel was enacted in1983 following principles found in British laws. With minimum paperwork and waiting time, an Israeli corporation can often be formed within one week. Shelf corporations are available for faster incorporation. An Israel corporation can be owned by one shareholder who can also be the sole director. For privacy, nominee directors and shareholders may be appointed. Israel offers a large talented workforce to staff corporations.