Business entities in Israel

Business entities in Israel

Healy Consultants advice our Clients with choosing the optimal corporate structures in Israel. There are several ways of doing business in Israel, the most common is setting up of a limited liability company. Entrepreneurs also have an option of incorporating a public limited company. Alternatively, our corporate Clients may also choose to register a branch office. For more details, please refer to the information below.

The Israel limited liability company (private company)

Choosing the right business structure in Israel The Israel limited liability company (LLC) company is the most common corporate vehicle used by entrepreneurs setting up an SME in Israel. Such business entity can be setup with i) US$1 as share capital and ii) 1 director and 1 shareholder, both can either be an individual or a legal entity. The director and shareholder can also be of any nationality and can reside in any country. A private company must file annual audited financial statements.

The Israel public limited company (public company)

  • This Israel business setup is recommended for entrepreneurs intending to publicly list the company on the Tel Aviv Stock Exchange market. A public company requires at least 2 directors and 7 shareholders of any nationality to be incorporated. The director and shareholder can either be an individual or a body corporate and can be resident of any country;
  • A public limited company requires a minimum paid-up share capital of US$1 to be incorporated. Additionally the entity must file and publish annual audited financial statements with the Companies Registrar.

The Israel branch office

The Israeli Companies Law allows foreign entities to set up branch offices in Israel. This entity can be 100% foreign owned. The branch is permitted to conduct business in Israel as a legal entity although its scope of operations is defined by the parent company. The branch must appoint at least one resident manager, of any nationality, to oversee to the company’s operations in Israel.

Comparison table between Israel business entities

 LLCPLCBranch office
Also known as:Private companyPublic companyBranch
How long to set the company up?4 weeks6 weeks6 weeks
How long to open company bank account?4 weeks4 weeks4 weeks
Legal liability?LimitedLimitedUnlimited
Wholly foreign owned?YesYesYes
Minimum share capital?US$1US$1US$1
File annual tax return?YesYesYes
Tax registration certificate required?YesYesYes
Recommended corporate bank account?Union BankIsrael Discount BankFirst International Bank of Israel
Does our Client need to travel?NoNoNo
Resident director required?NoNoYes
Resident shareholder required?NoNoNo
Minimum directors allowed?121
Minimum shareholders?171
Tax identification code (TIN) needed?YesYesYes
Israel resident company secretary required?NoNoNo
Corporate shareholders allowed?YesYesYes
Corporate director(s) allowed?YesYesYes
Israel corporate tax rate?26.50%26.50%26.50%
Annual financial statements required?YesYesYes
Statutory audit required?YesYesYes
Regulated by?Ministry of Justice of IsraelMinistry of Justice of IsraelMinistry of Justice of Israel
Allowed to issue sales invoices?YesYesYes
Allowed to sign contracts?YesYesYes
Allowed to import and export goods?YesYesYes
Can rent an office space in Israel?YesYesYes
Can buy Israel property?YesYesYes
Can own equity in other Israel companies?YesYesYes
Total Israel business setup costs in Yr. 1US$13,500US$14,270US$14,100
Subsequent annual costs (incl. accounting and tax fee)US$6,300US$6,300US$6,300
Sample engagement invoiceIsrael LLC draft invoiceIsrael PLC invoiceIsrael branch invoice

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Contact us

For additional information on our business setup services in Israel, please email us at email@healyconsultants.com. Alternatively please contact our in-house country expert, Ms. Grace Odhiambo, directly:
Federation of Israeli Chamber of Commerce Bank of israel israel business connection israel Ministry of Finance israel tourism israel Ministry of Economy and Industry