Israel is one of the rapidly growing economies globally, with a high-technology and strong diamond industry. Israel is also leading in agricultural products, pharmaceuticals, green energy, and FinTech, which is providing opportunities to entrepreneurs and other business-minded people. There are several options for entrepreneurs for setting up a company in Israel. They can set up limited liability companies, partnerships, offshore companies, private and public firms according to their interest and legislation and are supervised by the Ministry of Justice. The Limited Liability Company is famous among foreign investors because of its convenience according to their needs.
I. Limited Liability Company (LLC):
Foreign investors prefer Limited Liability Companies in Israel because for the formation of an LLC, there is no special requirement regarding the number of shareholders. A single entrepreneur or a company can lawfully register an LLC in Israel. The minimum share capital to form an LLC is one Dollar, at least one shareholder (a person or a company), and a minimum of one director is required to set up an LLC in Israel. The directors and shareholders can be from any country and can reside anywhere in the world. The Limited Liability Company should put Ltd at the end of its name.
II. Offshore Company:
The Offshore company in Israel is known for its lower taxes. One can register an offshore company in Israel and operate its business outside of Israeli jurisdiction. Many investors have formed offshore companies in Israel due to its easy incorporation procedures, low taxes, and assets protection from liabilities. One more plus point of starting an offshore company in Israel is that the businessman’s name is not disclosed publicly.
III. Private company:
If it is a non-public company; entrepreneurs can operate in Israel under particular conditions. There should be a board of directors responsible for planning the company’s policies for a private company. Moreover, a General manager shall be there to monitor and operate the daily affairs of the company. A private company in Israel cannot trade in the stock exchange, unlike public companies.
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Documents required for registering a company in Israel:
The following documents are required for expanding your business in Israel:
- Company registration application form;
- The Memorandum and Articles of Association;
- Declaration by the shareholders;
- Company’s address and business details; and
- VAT certificate issued by Income Tax Department.
Steps for registering a company in Israel:
The following steps are to be followed while registering a company in Israel:
- The first step towards registering a company in Israel is to obtain the company registration papers that need to be certified at an attorney’s office; entrepreneurs need to submit an application to register their company, need signatures of the shareholders, etc. the investors have to propose three names for the company, out which the authority will approve one after finding it suitable and is never used before.
- After that, entrepreneurs need to file the association articles with the registrar of companies at the Ministry of Justice. Declarations of serving capacities must be signed by both the directors and the shareholders.
- A bank account is required to be opened in any commercial bank in Israel. It takes almost five business days.
- Moreover, the investor has to register with the Income Tax Department for company taxation. The registration confirmation mat takes a few weeks to be complete.
- Next is registration with the Ministry of Finance for VAT, some documents having company information shall be submitted to the Ministry of Finance.
- The last step of registration of a company in Israel is registration with the National Insurance Institute.