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Corporate Relocation to Israel

Michael Decker
Michael Decker

Corporate relocation to Israel involves a significant shift in the life of the individual(s) relocating or in the management of the company branch being relocated. With years of experience in helping individuals and companies with their relocation to Israel, our law firm is here to help bring clarity to those seeking to relocate. This article explains some of the information it is important that anyone part of a corporate relocation to Israel should know.

Relocation for a worker at an Israeli corporation:

An individual who is not an Israeli citizen or resident, who works for a corporation that is registered both in Israel and abroad, will need to go through the process of relocation of foreign workers to Israel.

Corporate Relocation to Israel

Relocation for a worker at a non-Israeli corporation:

On the other hand, for individuals employed by a corporation that is not registered in Israel, corporate relocation to Israel will require that the company first register in Israel in accordance with the Israeli Companies Law. For details on the specific requirements for registering a corporation in Israel or establishing a new corporate entity in Israel, see our article on the topic.

Corporate relocation to Israel may simply involve the minimal steps of registering a company in Israel and the employment of a number of workers in compliance with Israeli Labor Law. However, it will often also involve a relocation of management to Israel, an establishment of offices and a corporate base in Israel.

Relocation of Management:

One of the first steps for relocation of management will be registration of the company in Israel and receiving a tax ID. This carries significant advantages in the area of compliance with Israeli Labor Laws, as it will enable a smooth process of ensuring all employees receive their legally mandated social rights. A relocation of management to Israel will also impact the company’s liability in terms of taxation.

Issues of taxation:

For corporations wishing to relocate their corporation to Israel, there will be key taxation issues to take into account. If it establishes itself in Israel as a Limited Liability Company (LLC), then as of 2021, the company’s taxable income will be subject to 23% tax based on the Israeli Income Tax Ordinance. However, there are exceptions whereby the company will pay lower taxes if it is in a sector with specific government incentives in the form of tax deductions. This will be the tax threshold either if the company is registered in Israel or if the control over the company’s business and their management is from Israel. For corporations relocating a branch to Israel and not incorporating in Israel, the income from that branch will be subject to Israeli corporate taxes.

Corporate relocation as a branch or as a subsidiary?

There are some key differences between companies that incorporate as an Israeli company and those that simply establish a branch of their company in Israel.


The assets of the company abroad will be subject to any legal conflict in the case of an Israeli branch. This is because in the case of a branch the branch is not a separate legal entity. In the case of a subsidiary established in Israel, the assets of the parent company abroad will usually not be subject to legal action as the subsidiary is considered to be a separate legal entity from the parent company.

Taxation of Dividends:

In the case of a subsidiary, the company is an Israeli corporation and must therefore pay the Israeli authorities a tax on dividends. This tax is usually 25% of the dividends but can vary depending on the type of company, whether the shareholder is a corporation or an individual and other factors. In the case of a branch, the company needn’t pay tax on dividends, as the profits from the branch belong to the foreign company.

It is important to emphasize, that companies incorporated outside of Israel, must pay corporate taxes based on the laws of the jurisdiction in which they function. That said, international taxation treaties mean that as a rule, companies should not be subject to double taxation.


If you have any further questions our relocation lawyers will be happy to assist you. We can help you with individual relocation to Israel, corporate relocation to Israel, or the legal issues surrounding relocation of management to Israel.

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