{"id":5675,"date":"2016-12-13T10:43:48","date_gmt":"2016-12-13T10:43:48","guid":{"rendered":"http:\/\/localhost\/test_manager\/business-tips-doing-business-in-israel\/"},"modified":"2019-07-10T09:44:36","modified_gmt":"2019-07-10T09:44:36","slug":"business-tips-doing-business-in-israel","status":"publish","type":"post","link":"https:\/\/managersoffice.net\/el\/business-tips-doing-business-in-israel\/","title":{"rendered":"Business Tips: Doing Business in Israel"},"content":{"rendered":"

WORKING CONDITIONS<\/strong><\/span><\/span><\/p>\n

Overseas visitors in Israel do not normally need to apply in advance for a visa. An ordinary\u00a0<\/span><\/span>tourist visa (B-2), valid for 90 days, is completed on entry into the country. It may be\u00a0<\/span><\/span>extended for longer by application to the Interior Ministry.<\/span><\/span><\/p>\n

For a foreign national to work in Israel, a permit must be obtained from the Ministry of\u00a0<\/span><\/span>Labour to enable the Interior Ministry to issue the necessary permit.<\/span><\/span><\/p>\n

Under the \u2018Law of Return\u2019, immigrants are entitled to permanent resident status, or to an\u00a0<\/span><\/span>A-1 visa, which entitles the immigrant to temporary resident status.<\/span><\/span><\/p>\n

BUSINESS HOURS<\/strong><\/span><\/span><\/p>\n

Most businesses, other than retail stores, operate a five-day week, closing on Fridays and\u00a0<\/span><\/span>Saturdays, with Sunday a normal working day. Usual business hours for commerce and\u00a0<\/span><\/span>industry are 8\u20139am to 4\u20135pm, Sunday to Thursday, and from 8am\u20131pm if open on Friday.<\/span><\/span><\/p>\n

Banks are open daily from 8.30am until 12.30pm. Two to three times a week, banks reopen\u00a0<\/span><\/span>in the afternoons.<\/span><\/span><\/p>\n

On Saturdays (the Jewish Sabbath), almost all businesses and offices are closed. Statutory\u00a0<\/span><\/span>holidays are in accordance with the Hebrew calendar. On the eve of the holidays,\u00a0<\/span><\/span>businesses usually cease doing business in the early afternoon.<\/span><\/span><\/p>\n

FOREIGN INVESTMENT<\/strong><\/span><\/span><\/p>\n

GENERAL BACKGROUND<\/strong><\/span><\/span><\/p>\n

A positive and open attitude prevails towards foreign investment in Israel.<\/span><\/span>Government policy is aimed at providing investment incentives to industries which\u00a0<\/span><\/span>increase the country\u2019s exports and create jobs. There are limited restrictions on sectors in\u00a0<\/span><\/span>which a foreign investor may invest, other than where there are defence considerations.<\/span><\/span><\/p>\n

Prior approval for an investment is generally not required except for investment in\u00a0<\/span><\/span>regulated bodies such as banks and insurance companies.<\/span><\/span><\/p>\n

Israel is also committed to the principles of free trade, shown by the large number of free\u00a0<\/span><\/span>trade agreements to which it is party.<\/span><\/span><\/p>\n

Israeli business associations actively seek overseas partners for investing in Israeli\u00a0<\/span><\/span>companies. In the light of the relatively small domestic market in Israel, export\u00a0<\/span><\/span>opportunities and international business connections are very important to Israeli\u00a0<\/span><\/span>businesses. They are generally supportive of government policy regarding incentives and\u00a0<\/span><\/span>often view foreign investors as a further opportunity to expand business and improve\u00a0<\/span><\/span>standards, rather than as a competitive threat.<\/span><\/span><\/p>\n

HI-TECH INDUSTRY<\/strong><\/span><\/span><\/p>\n

Many international corporations, such as Microsoft, IBM, Intel, Motorola and other\u00a0<\/span><\/span>companies have invested over the past several years in high-tech industry in Israel by\u00a0<\/span><\/span>either purchasing Israeli companies or by establishing their own subsidiaries in Israel.<\/span><\/span><\/p>\n

Several Israeli high-tech start-up companies have drawn the attention of the world market\u00a0<\/span><\/span>and investors because of their remarkable worldwide success in both technical and\u00a0<\/span><\/span>financial arenas.<\/span><\/span><\/p>\n

Because of increasing interest among investors in high-tech projects, involvement of\u00a0<\/span><\/span>venture capital funds has significantly increased. The success of Israeli high-tech companies\u00a0<\/span><\/span>and the availability of venture capital funds have motivated young Israeli entrepreneurs to\u00a0<\/span><\/span>open their own high-tech companies.<\/span><\/span><\/p>\n

Venture capital fund managers support the company in which they invest by providing\u00a0<\/span><\/span>information, advice and \u2018opening doors\u2019 throughout the world to promote the business of\u00a0<\/span><\/span>the company.<\/span><\/span><\/p>\n

TYPES OF BUSINESS ENTITY<\/strong><\/span><\/span><\/p>\n

Foreign investors who intend to conduct commercial activities in Israel may choose from a\u00a0<\/span><\/span>wide range of legal entities.<\/span><\/span><\/p>\n

The choice will depend on business priorities. Legal entities comprise inter alia companies,\u00a0<\/span><\/span>partnerships, co-operatives, joint ventures and not-for-profit organisations.\u00a0<\/span><\/span>Individuals may conduct their business without forming any separate legal entity. There are\u00a0<\/span><\/span>very few restrictions on the foreign ownership of shares and securities of Israeli companies,\u00a0<\/span><\/span>or on foreign involvement in unincorporated enterprises, other than for specific\u00a0<\/span><\/span>professions such as law and accountancy where local qualifications are required.<\/span><\/span><\/p>\n

COMPANIES<\/strong><\/span><\/span><\/p>\n

The most common form of business entity in Israel is a limited company with capital stock\u00a0<\/span><\/span>(share capital). All companies are formed and regulated under the Companies Law and the\u00a0<\/span><\/span>Companies Ordinance.\u00a0<\/span><\/span><\/p>\n

While there are companies with unlimited liability or limited by guarantee, the most\u00a0<\/span><\/span>common form of business enterprise in Israel is a company with liability limited by shares.<\/span><\/span><\/p>\n

There are two types of limited company which are described in greater detail in this\u00a0<\/span><\/span>section.<\/span><\/span><\/p>\n

PRIVATE COMPANIES<\/strong><\/span><\/span><\/p>\n

A private company is prohibited from offering its shares to the public and has restricted\u00a0<\/span><\/span>rights over the transfer of shares. Currently, a minimum of one and a maximum of 50\u00a0<\/span><\/span>shareholders are required.<\/span><\/span><\/p>\n

A private company must keep proper accounting records using a double-entry system. A\u00a0<\/span><\/span>balance sheet and income statement audited by an independent accountant must be\u00a0<\/span><\/span>submitted to shareholders once a year. Companies must also issue an annual financial\u00a0<\/span><\/span>statement, generally by 31 December, to coincide with the end of the tax year. While not\u00a0<\/span><\/span>required, certain private companies also present their financial statements in accordance\u00a0<\/span><\/span>with securities regulations which apply to public companies, including the adoption of\u00a0<\/span><\/span>International Financial Reporting Standards (IFRS).<\/span><\/span><\/p>\n

PUBLIC COMPANIES<\/strong><\/span><\/span><\/p>\n

A public company must have at least seven stockholders, with no maximum limit. The\u00a0<\/span><\/span>transfer of a public company\u2019s stocks is not restricted. If a public company\u2019s stocks are\u00a0<\/span><\/span>traded on the Tel-Aviv Stock Exchange (the TASE), the company is required to publish\u00a0<\/span><\/span>annual financial statements and quarterly unaudited (but reviewed by a CPA) financial\u00a0<\/span><\/span>statements. The format and disclosures of a public company\u2019s financial statements are\u00a0<\/span><\/span>governed by the Securities Regulations. Public companies are required to make their\u00a0<\/span><\/span>financial year the same as the tax year.<\/span><\/span><\/p>\n

As of 2008, listed companies are required to adopt the International Financial Reporting\u00a0<\/span><\/span>Standards (IFRS).<\/span><\/span><\/p>\n

FOREIGN COMPANIES<\/strong><\/span><\/span><\/p>\n

Foreign companies doing business in Israel must register with the Registrar of Companies\u00a0<\/span><\/span>and provide a Memorandum and Articles of Association, list of directors and other required\u00a0<\/span><\/span>information. All documents can be in Hebrew or English.<\/span><\/span><\/p>\n

Foreign companies wishing to issue securities on the TASE must publish a prospectus and\u00a0<\/span><\/span>present financial reports. The financial reports should be published in both Hebrew and\u00a0<\/span><\/span>English and prepared in Israeli currency according to accounting principles generally\u00a0<\/span><\/span>accepted in Israel. Companies incorporated in the US are permitted to prepare their\u00a0<\/span><\/span>financial statements in US dollars, in accordance with accounting principles generally\u00a0<\/span><\/span>accepted in the US. In certain cases, companies already traded in foreign stock exchanges\u00a0<\/span><\/span>(like NASDAQ) can register in the TASE and are required to publish only the material the\u00a0<\/span><\/span>company publishes for the foreign stock exchange.<\/span><\/span><\/p>\n

CAPITAL STRUCTURE<\/strong><\/span><\/span><\/p>\n

Capital structures may consist of more than one class of share. The most common form of\u00a0<\/span><\/span>share capital issued is ordinary shares and preference shares. Redeemable shares may also\u00a0<\/span><\/span>be issued if permitted under the articles of association. Other forms of capital include\u00a0<\/span><\/span>founder shares (management shares) and deferred shares (warrants).<\/span><\/span><\/p>\n

DOING BUSINESS IN ISRAEL<\/strong><\/span><\/span><\/p>\n

As a general rule, the TASE encourages the issue of shares with equal voting rights and\u00a0<\/span><\/span>restricts the disparity between the par values of different voting shares. Only one class of\u00a0<\/span><\/span>share may be listed for trading on the parallel list of the TASE.<\/span><\/span><\/p>\n

An Israeli company may distribute its retained-after-tax earnings by way of dividends. The\u00a0<\/span><\/span>dividends can be distributed from earnings but should not exceed the nominal retained\u00a0<\/span><\/span>earnings.<\/span><\/span><\/p>\n

PARTNERSHIPS<\/strong><\/span><\/span><\/p>\n

Partnerships are regulated by the Partnership Ordinance (New Version) 1975. Other than\u00a0<\/span><\/span>certain professional partnerships, they may have no more than 20 partners. Partnerships of\u00a0<\/span><\/span>lawyers and accountants may have up to 50 partners. Partnerships may be general or\u00a0<\/span><\/span>limited and must be registered with the Registrar of Partnerships if there is an intention to\u00a0<\/span><\/span>carry on a business.<\/span><\/span><\/p>\n

GENERAL PARTNERSHIP<\/strong><\/span><\/span><\/p>\n

Each partner has joint and several liability. Each partner is permitted to act on behalf of the\u00a0<\/span><\/span>partnership and is held to be its agent, and each partner\u2019s activities and actions are binding\u00a0<\/span><\/span>on the remaining partners. Each partner is separately assessed for tax on his or her related\u00a0<\/span><\/span>share of the profits. Foreigners can be partners unless precluded by laws relating to specific\u00a0<\/span><\/span>professions, where local qualifications are prerequisites to membership.<\/span><\/span><\/p>\n

FOREIGN PARTNERSHIPS<\/strong><\/span><\/span><\/p>\n

Foreign partnerships, general or limited, may operate in Israel on condition that they\u00a0<\/span><\/span>provide information to the Registrar of Partnerships, including details of the partners and\u00a0<\/span><\/span>of at least one Israeli resident who is willing to accept legal notices on their behalf.<\/span><\/span><\/p>\n

Registration rules are the same as for Israeli partnerships.<\/span><\/span><\/p>\n

OTHER FORMS OF BUSINESS ORGANISATIONS<\/strong><\/span><\/span><\/p>\n

JOINT VENTURES<\/span><\/span><\/p>\n

Joint ventures are distinguished from partnerships by the separate liability attached to\u00a0<\/span><\/span>each participant\u2019s own obligations. The legal documentation should be clear that joint and\u00a0<\/span><\/span>several liability cannot be implied.<\/span><\/span><\/p>\n

CO-OPERATIVES<\/strong><\/span><\/span><\/p>\n

Co-operative societies exist mainly in agriculture, marketing, retailing, bus transport and\u00a0<\/span><\/span>trucking. The Co-operative Societies Ordinance governs their activities and co-operatives\u00a0<\/span><\/span>must register with the Registrar of Co-operatives at the Ministry of Labour.<\/span><\/span><\/p>\n

NOT-FOR-PROFIT ORGANISATIONS<\/strong><\/span><\/span><\/p>\n

A special law enacted in 1980 governs not-for-profit organisations which permits activities\u00a0<\/span><\/span>to be conducted through an \u2018association\u2019. An association must have a management\u00a0<\/span><\/span>committee, a general meeting of members of the association and an audit committee.<\/span><\/span><\/p>\n

EMPLOYER-EMPLOYEE RELATIONS<\/strong><\/span><\/span><\/p>\n

Employer- employee relationships are governed by several mechanisms which are\u00a0<\/span><\/span>arranged in a specific order to create a form of pyramid, where each level cannot\u00a0<\/span><\/span>contradict the level above, only add to it.<\/span><\/span><\/p>\n

The laws are the highest level and they determine the minimum rights to which employees\u00a0<\/span><\/span>are entitled. Following the laws are the collective agreements, widening orders which\u00a0<\/span><\/span>extend the collective agreements to the rest of the economy, collective bargaining and\u00a0<\/span><\/span>personal employment contracts.<\/span><\/span><\/p>\n

Collective bargaining is conducted between the employers\u2019 organisations, the trade unions\u00a0<\/span><\/span>and the government. Collective bargaining operates in the private sector as well; however\u00a0<\/span><\/span>here, there is a growing trend towards personal employment contracts.<\/span><\/span><\/p>\n

UNIONS<\/strong><\/span><\/span><\/p>\n

The dominant labour organisation in Israel is the Histadrut, the general federation of\u00a0<\/span><\/span>labour. The labour courts have recognised the right to establish other labour organisations,\u00a0<\/span><\/span>but though this possibility exists, Histadrut is the only countrywide union at present.<\/span><\/span><\/p>\n

EMPLOYMENT LEGISLATION AND REGULATIONS<\/strong><\/span><\/span><\/p>\n

The working week is 43 hours according to the Working and Resting Hours law.<\/span><\/span><\/p>\n

The Minimum Wages law determines that the minimum wage is currently ILS 4,650 per\u00a0<\/span><\/span>month. The minimum wage will be increased gradually to ILS 5,000 by 1.1.2017. The\u00a0<\/span><\/span>minimum wage per hour is 1\/186 from the minimum wage per month.<\/span><\/span><\/p>\n

The retirement age is 67 for men and 64 for women.<\/span><\/span><\/p>\n

ANNUAL VACATION LAW<\/strong><\/span><\/span><\/p>\n

Minimum annual paid vacations range from ten working days after one year of\u00a0<\/span><\/span>employment to a maximum of 24 days dependent on the number of years of employment.<\/span><\/span><\/p>\n

This is in addition to the nine statutory national and religious holidays.<\/span><\/span><\/p>\n

EQUAL OPPORTUNITIES IN EMPLOYMENT LAW<\/strong><\/span><\/span><\/p>\n

This law rules that employees must receive equal pay for the same work at the same place<\/span><\/span>of employment, as well as equal treatment on termination of employment. It also forbids\u00a0<\/span><\/span>sexual discrimination in advertising and filling job vacancies, except where dictated by the\u00a0<\/span><\/span>nature of the work. In 1998, the Sexual Harassment in a Workplace law was enacted.<\/span><\/span><\/p>\n

FOREIGN PERSONNEL<\/strong><\/span><\/span><\/p>\n

WORK PERMITS<\/strong><\/span><\/span><\/p>\n

Work permits are required before foreign personnel can be employed. Employers, giving\u00a0<\/span><\/span>details of the prospective employees and explaining why foreign citizens are required,\u00a0<\/span><\/span>must make applications to the Ministry of Labour in writing. Work permits are normally\u00a0<\/span><\/span>issued for up to one year but can be extended.<\/span><\/span><\/p>\n

Work permit applications generally fall into two categories \u2013 for skilled and non- skilled\u00a0<\/span><\/span>workers.<\/span><\/span><\/p>\n

SKILLED WORKERS<\/strong><\/span><\/span><\/p>\n

The correct procedure is to obtain a work permit prior to arrival but foreigners may enter\u00a0<\/span><\/span>Israel on a regular visitor\u2019s visa and apply to the Minister of Labour later. With a\u00a0<\/span><\/span>recommendation from the Minster of Labour, the foreign worker then applies to the\u00a0<\/span><\/span>Ministry of Interior and will need to prove that he\/she has adequate health insurance\u00a0<\/span><\/span>coverage. The Ministry of Interior will then issue a visitor\u2019s permit of work (B-1) and a\u00a0<\/span><\/span>multiple-entry permit for a period of up to one year with the possibility of extension.\u00a0<\/span><\/span><\/p>\n

TAX ON COMPANIES<\/strong><\/span><\/span><\/p>\n

Companies are liable for company tax and capital gains tax on their Israeli source income\u00a0<\/span><\/span>and on other income received in Israel, whether or not they are resident in Israel, unless\u00a0<\/span><\/span>provisions of a double taxation treaty state otherwise.<\/span><\/span><\/p>\n

Resident companies are also liable for capital gains tax on their worldwide gains and,\u00a0<\/span><\/span>where control and management are exercised from Israel, company tax on foreign\u00a0<\/span><\/span>business income.<\/span><\/span><\/p>\n

An Israeli resident company is defined as follows:<\/span><\/span><\/p>\n

A company registered in Israel whose main activity is in Israel. However, if registered in\u00a0<\/span><\/span>Israel as a foreign company, it will be deemed an Israeli resident company only if it so\u00a0<\/span><\/span>requests.<\/span><\/span><\/p>\n

A company controlled and managed in Israel.<\/span><\/span><\/p>\n

TAX RATES<\/strong><\/span><\/span><\/p>\n

The taxable income of Israeli companies is subject to a company tax of 25% for the year\u00a0<\/span><\/span>2016.<\/span><\/span><\/p>\n

Dividends paid to Israeli individuals or foreign residents (both individuals and companies)\u00a0<\/span><\/span>are subject to withholding taxes of 25% (30% for shareholders holding 10% or above). In\u00a0<\/span><\/span>the case of existing, valid tax treaties between Israel and other countries, withholding taxes\u00a0<\/span><\/span>are determined in each treaty. Dividends paid to an Israeli company by another Israeli\u00a0<\/span><\/span>company are subject to withholding taxes of 0%.<\/span><\/span><\/p>\n

Approved enterprises, foreign-controlled companies and foreign investors may be subject\u00a0<\/span><\/span>to different tax rates.<\/span><\/span><\/p>\n

Manager\u2019s Office
\n<\/strong><\/span><\/span>Financial Dept<\/strong><\/span><\/span><\/p>","protected":false},"excerpt":{"rendered":"

Foreign investors who intend to conduct commercial activities in Israel may choose from a wide range of legal entities.<\/p>","protected":false},"author":1,"featured_media":7858,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":""},"categories":[153],"tags":[],"yoast_head":"\nBusiness Tips: Doing Business in Israel - Manager's Office<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/managersoffice.net\/el\/business-tips-doing-business-in-israel\/\" \/>\n<meta property=\"og:locale\" content=\"el_GR\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Business Tips: Doing Business in Israel - Manager's Office\" \/>\n<meta property=\"og:description\" content=\"Foreign investors who intend to conduct commercial activities in Israel may choose from a wide range of legal entities.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/managersoffice.net\/el\/business-tips-doing-business-in-israel\/\" \/>\n<meta property=\"og:site_name\" content=\"Manager's Office\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Managers-Office-131795126893693\" \/>\n<meta property=\"article:published_time\" content=\"2016-12-13T10:43:48+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2019-07-10T09:44:36+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/managersoffice.net\/wp-content\/uploads\/2016\/12\/flag-israel.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"300\" \/>\n\t<meta property=\"og:image:height\" content=\"193\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@ManagersOffice\" \/>\n<meta name=\"twitter:site\" content=\"@ManagersOffice\" \/>\n<meta name=\"twitter:label1\" content=\"\u03b5\u03ba\u03c4\u03b9\u03bc\u03ce\u03bc\u03b5\u03bd\u03bf\u03c2 \u03c7\u03c1\u03cc\u03bd\u03bf\u03c2 \u03b4\u03b9\u03b1\u03b2\u03ac\u03c3\u03bc\u03b1\u03c4\u03bf\u03c2\">\n\t<meta name=\"twitter:data1\" content=\"11 \u03bb\u03b5\u03c0\u03c4\u03ac\">\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Organization\",\"@id\":\"https:\/\/managersoffice.net\/#organization\",\"name\":\"Manager's Office\",\"url\":\"https:\/\/managersoffice.net\/\",\"sameAs\":[\"https:\/\/www.facebook.com\/Managers-Office-131795126893693\",\"https:\/\/twitter.com\/ManagersOffice\"],\"logo\":{\"@type\":\"ImageObject\",\"@id\":\"https:\/\/managersoffice.net\/#logo\",\"inLanguage\":\"el\",\"url\":\"https:\/\/managersoffice.net\/wp-content\/uploads\/2021\/01\/MOFLogoSEO.jpg\",\"width\":160,\"height\":160,\"caption\":\"Manager's Office\"},\"image\":{\"@id\":\"https:\/\/managersoffice.net\/#logo\"}},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/managersoffice.net\/#website\",\"url\":\"https:\/\/managersoffice.net\/\",\"name\":\"Manager's Office\",\"description\":\"\",\"publisher\":{\"@id\":\"https:\/\/managersoffice.net\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":\"https:\/\/managersoffice.net\/?s={search_term_string}\",\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"el\"},{\"@type\":\"ImageObject\",\"@id\":\"https:\/\/managersoffice.net\/business-tips-doing-business-in-israel\/#primaryimage\",\"inLanguage\":\"el\",\"url\":\"https:\/\/managersoffice.net\/wp-content\/uploads\/2016\/12\/flag-israel.jpg\",\"width\":300,\"height\":193},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/managersoffice.net\/business-tips-doing-business-in-israel\/#webpage\",\"url\":\"https:\/\/managersoffice.net\/business-tips-doing-business-in-israel\/\",\"name\":\"Business Tips: Doing Business in Israel - 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