How long will it take to register a subsidiary of my company in Israel?

It would take approximately 12 weeks to register a new company and open a corporate bank account.

Will I need to travel to Israel for the incorporation process?

No. To open the company, you will only be required to sign and courier some documents.

What is Healy Consultants' professional fee for Israel company setup service?

To set up an Israeli LLC, our fees will be US$13,500, including corporate bank account opening. Please refer to the attached invoice for a breakdown of the fees.

Doing business in Israel

Since 2003, Healy Consultants Group has assisted our Clients with business registration in Israel. Our services include i) Israel company incorporation ii) government license registration iii) business bank account opening iv) employee recruitment v) visa strategies and vi) office rental solutions.

Compare different Israel entities	LLC	Fast business setup solution	LLP	PLC	Branch office	Representative office
Best use of company	All products and services	Close customer deal now	Professional services	To secure public funding	Import/export	Marketing and research
How soon can you invoice Clients/sign sales contracts?	3 months	3 weeks	3 months	3 months	3 months	No
How soon can you hire staff?	3 months	3 weeks	3 months	3 months	3 months	2 months
How soon can you sign a lease agreement?	1 week	1 week	1 week	1 week	1 week	1 week
How long to supply company registration?	1 month	3 weeks	1 month	1 month	1 month	1 month
How long to supply corporate bank account numbers?	3 months	3 weeks	3 months	3 months	3 months	3 months
How long to supply tax numbers?	3 months	3 weeks	3 months	3 months	3 months	No
Corporate tax rate on annual net profits?	23%	23%	0%	23%	23%	0%
Limited liability entity?	Yes	Yes	Yes	Yes	No	No
Government grants available?	Yes	Yes	Yes	Yes	Yes	No
Resident director/partner/manager required?	No, but recommended	No, but recommended	Yes	Yes	Yes	Yes
Can bid for for government contracts?	Yes	Yes	Yes	Yes	Yes	No
Corporate bank account location?	Union Bank	Leumi Bank	Bank Hapoalim	Israel Discount Bank	First International Bank of Israel	Mizrahi-Tefahot Bank Ltd
Can secure trade finance?	Yes	Yes	Yes	Yes	Yes	No
VAT payable on sales to local customers?	17%	17%	17%	17%	17%	No sales allowed
Average total engagement costs?	US$32,600	US$30,200	US$14,270	US$14,270	US$19,450	US$13,500
Average total engagement period?	3 months	2 months	3 months	3 months	3 months	3 months

See full table

Accounting and tax considerations	LLC	Fast business setup solution	LLP	PLC	Branch office	Representative office
Statutory corporate tax payable?	23%	23%	0%	23%	23%	0%
Legally tax exempt if properly structured?	No	No	Yes	No	No	Yes
Group HQ tax incentives?	Yes	Yes	No	Yes	Yes	No
Must file an annual tax return?	Yes	Yes	Yes	Yes	Yes	No
Must file annual financial statements?	Yes	Yes	No	Yes	Yes	No
Must appoint an auditor?	No	No	No	Yes	No	No
Access to double taxation treaties?	Yes	Yes	Yes	Yes	Yes	No
Withholding tax on payments to shareholders?	30%	30%	30%	30%	30%	0%
Company Registration	LLC	Fast business setup solution	LLP	PLC	Branch office	Representative office
Minimum number of directors/managers?	1	1	2	2	1	1
Minimum number of shareholders/partners?	1	1	2	7	Parent company	Parent company
Maximum shareholding for foreigners?	100%	100%	100%	100%	100%	100%
Shelf companies available?	Yes	Yes	No	Yes	No	No
Time to incorporate a new entity?	3 months	3 weeks	3 months	3 months	3 months	2 months
Can easily convert to a PLC?	Yes	Yes	No	Yes	No	No
Public register of shareholders and directors?	Yes	Yes	Yes	Yes	Yes	Yes
Can have preference shareholders?	Yes	Yes	No	Yes	No	No
Business Considerations	LLC	Fast business setup solution	LLP	PLC	Branch office	Representative office
Good entity for trademark registration?	Yes	Yes	Yes	Yes	No	No
Can secure an import and export license?	Yes	Yes	Yes	Yes	Yes	No

Resident tax representative required?	Yes
Nominee tax representatives often require indemnity insurance?	Yes
Minimum paid up share capital?	None
Sponsorship by a local citizen required?	No
Our Client needs to travel to Israel for business set up?	No
Government approval required for foreign owners?	No
Temporary physical office solutions available?	Yes
You need a local resident as bank signatory?	No
Can be wholly foreign owned?	Yes
The entity will likely be regulated by?	Israeli Corporations Authority
Monthly VAT reporting to the government?	Yes
Must sign an office lease agreement during incorporation?	No
Shareholders and directors documents to be attested/translated?	Yes
Each foreign director needs a personal income tax number?	No
Foreign director needs a residence visa?	No
Maximum number of staff allowed?	None
Expatriate to local staff ratio?	None
Can secure residence visa for business owner?	Yes
Other useful information
What will be included in my customer sales invoice?	Click link
This country has signed free trade agreements?	Yes
This country is a member of WIPO/TRIPS?	Yes
This country is a member of the ICSID?	Yes
Average customs duties suffered?	6% to 18%
Government foreign investment approval required?	No
Average monthly office rental? (US$ per sq m)	US$29
Minimum statutory monthly salary?	US$1,298
Average monthly US$ salary for local skilled employees?	US$2,940
US$ deposit interest rate? (1-year average)	0.45%
Overseas remittance currency controls?	No
Banking considerations
Multi-currency bank accounts available?	Yes
Corporate visa debit cards available?	Yes
Quality of e-banking platform?	Good
Crowd funding available in this country?	Yes

Israel business setup summary

Press the link headings below to read detailed, relevant, up to date information.

Advantages and disadvantages
Advantages of Israel company registration
1. An Israeli private LLC can be registered by 1 director and 1 shareholder, who need not be Israeli nationals or residents. Furthermore, there is no obligation for our Clients to visit Israel in order to complete the registration process. Also, there is no statutory share capital requirement, due to which our Clients can setup their companies with US$1;
2. Israeli companies will enjoy several benefits including
  - Companies investing in approved R&D projects may receive funding from the Office of Chief Scientist (OCS) covering between 20% and 50% of the program’s budget. Furthermore, such companies operating in priority areas will be eligible for an additional 10% grant from the OCS;
  - Industrial companies incorporated in Israel will enjoy reduced tax rates of either 10% or 15% if i) the companies export 25% of their produce abroad or ii) invest in the field of biotechnology or nanotechnology. As a result of these incentives, Israel was 20^th best in the world in the metric “Innovation” in the 2019 Global Competitiveness Report ;
  - Multinational companies investing at least US$2.5 million and hiring at least 250 people in the country may be eligible for reduced corporate tax rates, ranging between 5% and 8%;
  - Dividends distributed by an Israeli company to another Israeli company will be completely corporate tax exempt if the source of the income is also in the country;
  - Goods imported in the Eilat free trade zone will be exempt from VAT and other duties if the goods are used or sold within the free zone;
  - The World Bank ranked Israel as the 18^th best jurisdiction in the world with regards to the metric “protecting minority investors”. As a result, foreign investors will feel secure when investing in the country;
  - There are no exchange controls in Israel. As a result, our Clients will be able to easily repatriate the profits to their home countries;
  - Israel has signed tax treaties with over 50 countries including China, India, Singapore, UK and USA to reduce withholding taxes on payments abroad.
3. The Government of Israel extends a range of incentives to its priority sectors to support and encourage entrepreneurs willing to invest in Israel. The main incentives include:
  - Employment aids: the government provides wage subsidies to new employees for a particular period;
  - Research & development benefits: the foreign entrepreneurs are provided with innovative visas, funding for the qualified R&D work and technological incubators and labs for carrying out their R&D work, among many other benefits;
  - Taxation benefits: in the form of lower companies’ tax and dividend rates.
4. In 2020, Israel signed Peace Treaties with four Arab countries including the UAE, Bahrain, Sudan and Morocco.
Disadvantages of Israel company registration
1. Every Israel company must appoint a local Israeli tax representative. This local person is solely and personally responsible for the company, including possible entity debts and liabilities, in front of the Israel Tax Authority. Consequently, every tax representative will want to have some control over the company.
2. Israel is an expensive jurisdiction. While company set up is inexpensive, our Clients should budget to pay a monthly minimum fee of US$2,200 to i) the local tax representative and ii) local accountants.
3. Our Clients should expect to travel at least once to Israel before the bank account is open. If our Client cannot travel to Israel, there is a 50% probability that the bank will accept to issue corporate bank account numbers if our Client appoints a local co-bank signatory.
4. While is not required by law, Healy Consultants Group recommends every Israel entity maintains an Israel office manager to liaise with the Israeli government and banks. Unfortunately, many administrative operations with the Israeli government and banks still require an Israeli resident to visit and sign documentation in person. If required, Healy Consultants can provide a nominee resident office manager or assist recruit one.
5. All companies doing business in Israel are required to file audited annual tax returns and financial statements within five months after their fiscal year. Healy Consultants will assist our Clients efficiently and effectively to complete this annual statutory obligation;
6. Israel is ranked as the world’s 35^th least corrupt country, according to the 2020 Corruption Perception Index;
7. Israel has been poorly ranked in the 39^th position in the Global Terrorism Index 2019. This further implies that the daily business activities might be hindered due to terrorism in the country. Also, entrepreneurs might be sceptical in investing in Israel.
Best uses for an Israeli company
High technology R&D and manufacturing
1. Tel Aviv is one of the most advanced tech startup hub outside of the United States, according to the Global Startup Ecosystem Report. This engineering talent, coupled with universal national service and high military funding, also means that the country the talent, experience and infrastructure for defence companies to create and build their products.