Foreign Subsidiary in Israel
This article addresses registering a foreign subsidiary in Israel. Foreign investors are increasingly establishing subsidiaries in Israel. Our law offices assist numerous local and foreign clients with their corporate needs, which are regulated by the Israel Corporations Authority.
Background Information for a Foreign Subsidiary in Israel
Foreign companies are welcome to create an Israeli subsidiary of their company (i.e., a daughter company). This is particularly appealing for small to mid-sized foreign companies. This daughter company is a limited liability company, and this is appealing to numerous foreign investors, as Israeli law permits all shareholders of Israeli subsidiaries to be foreign citizens. All of the company’s shares may be held by foreign citizens. In Israel, the foreign subsidiary is considered a distinct entity from the foreign parent company, regardless of whether or not the foreign parent company is the exclusive shareholder.
A Few Details on the Foreign Subsidiary in Israel
The foreign subsidiary will be subject to the Israeli Company Registrar and will be taxed in Israel. The subsidiary is free to have any type of commercial activity and investment, whether particular or global in nature. It is permitted to, for example, make real estate acquisitions for residential or commercial use. There are also numerous financial advantages to having a limited liability company, which we discuss in other articles.
Sometimes clients ask if the company director must immigrate to Israel to carry out this arrangement. This is not necessary, provided that the director has physical headquarters in Israel, allowing the subsidiary company to implement the director’s activities. However, it is important to note that, in the event that it is possible for the company director to immigrate to Israel, this company director will benefit from certain tax advantages. These advantages go into effect as soon as the director is considered an Israeli tax resident (dwelling in Israel for more than 183 days). It is also important to note that, if the company director immigrates and establishes tax residence in Israel, they will be subject to the “exit tax.”
Our law firm advises clients before they create their company helping them come up with the best legal terms to fit their needs. Our lawyers also take care of all the legal steps to create and manage a company, working hand in hand with our clients, investors and entrepreneurs to make sure their interests are most effectively served throughout the process.
You can find numerous other topics related to Israeli corporate and commercial law on our website.
If you wish to establish a foreign subsidiary in Israel or need assistance with any other aspect of Israeli company law, feel free to contact us.
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