The process of establishing a company in Israel
The Israeli corporations’ authority within the Ministry of Justice is responsible for the registration of companies in Israel. Anyone who is interested in establishing a company in Israel, whether private limited liability company, a branch of a foreign company or an Israeli partnership, will need the approval of this state agency. The requirements for registration will differ slightly for each type of legal entity.
Regardless of the type of company you wish to establish in Israel, the Decker, Pex, Levi and associates law offices are at your service. We have a great deal of experience in representing foreign companies and entrepreneurs entering the Israeli marketplace. Our business law attorneys can help you register your company, relocate employees from abroad, open a company bank account, and submit required reports throughout the business lifecycle.
Required documents when establishing a company in Israel
An application form for the registration of a company in Israel is the first document. Three alternatives for the proposed company name must be listed, in case the chosen initial name is already taken. The name on the certificate of registration can be in Hebrew or English.
The applicant must have an Israeli ID or passport, home address and an address for the company in Israel. They must also offer a telephone number for the applicant to be contacted at, for the purpose of clarifications.
In addition, they must state the requested number of verified copies of the Articles of Association. On the company Articles of Association the following details should be included: company name, company objectives, details regarding registered capital and capital allotted to shareholders, details regarding limitations of liabilities, particulars of the shareholders, full name, ID number and address.
Who can submit an application to establish an Israeli company?
The application for the registration of a company should be submitted on Form 1 of the Addendum of the Companies Regulations (Reporting, Details of Registration and Forms) 1999, completed with the same details as those in the Company’s Articles of Association.
This form may only be submitted by company shareholders, and it is sufficient to have only one shareholder, whether Israeli or a foreign citizen, in order to register a company in Israel. The shareholder may also either be an individual or another corporation. If the owner is a foreign citizen, they must attach a copy of their passport to the company registration application. If the shareholder is an international corporation, they are also required to provide their certificate of registration, verified and translated.
The shareholders must sign the Articles of Association and their signature must then be validated by an Israeli lawyer. The shareholders’ signature on the application form must be authenticated by an affidavit proclaiming that there is no legal limitation on them registering the company in Israel.
Shareholders declaration
According to Form 2 of the Addendum of the Companies Regulations (Reporting, Details of Registration and Forms) 1999, a first Shareholders’ Declaration Form must also be submitted,. The applicant must verify that the correct declaration has been examined and completed. The declarant’s signature must be validated by an affidavit signed in the presence of a lawyer.
A ‘Declaration of the Shareholders’ must be submitted as part of the application process if the company to be registered has more than one shareholder. The lawyer must validate the signatures of the first shareholders and provide them with a full warning by an affidavit.
Establishing an Israeli company requires a registration fee to the Israeli government Department of Corporations at the Ministry of Justice. Currently, the fee for the registrar of companies is 2,645 NIS.
Using a smart card
A smart card enables the submission of a request for registering a company directly via the Registrar of Companies website. There is no need to obtain a separate smart card for each company.
This online request for registering a private company can be submitted either by an attorney, or the single shareholder and single director of the company, who is not an attorney. Once the company is registered, the applicant will receive an email containing a certificate of incorporation and articles of association, with the new verification stamp.
The applicant may use a smart card to execute the following operations: submitting annual statements, allocation of shares, transfer of shares, increase/reduction of registered capital, appointment and removal of directors, change of the company’s registered address.
There are several advantages of this new service. Firstly, a smart card enables immediate notification and conformation on executing current reports online through the Registrar of Companies systems. It also provides the opportunity to track the status of handling the request on the website, including the integrity of the information and restrictions. The holder of the smart card must be updated as being authorized to report on behalf of the company in the Registrar of Companies Registry.
Other practical information
The owner will have to pay 25% tax on the profit of their company. In addition, they will have to pay the state an annual fee of 1,500 NIS each year after registering the Israeli company. Filing yearly business activity reports as a company is also required. This should take account of any work carried out by the company, expenses paid and income received. A local Israeli CPA help with preparing and filing these documents.
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If you need legal representation for your company, help registering your company or dealing with required reports, or have any other questions about corporate law, our attorneys are at your service.
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