What foreign entrepreneurs need to know to create a company in Israel
Outstanding for having made great contributions to the world in medicine and technology, Israel has made enormous strides in its free-market economy, enabling its inhabitants to enjoy a higher standard of living than other Western countries.
As a consequence of this type of economy, this country promotes the welfare state, the technology sector, and the constant modernization of its infrastructure.
The indices further indicate that Israel has the second highest-number of startups in the world after the United States.
Proof of the reliable prosperity this territory can bring is the fact that Intel, Microsoft, and Apple built their first overseas research and development facilities there.
With an impressive track record in creating technologies for profit, Israel has become the first choice for many of the world's leading entrepreneurs, investors, and industry giants.
This country, where entrepreneurs are highly valued, invests in research and development, which creates a climate in which more than 1,000 startups are created per year. The consequence of it? New immigrant entrepreneurs or returning residents make a dream come true.
It is evident the advantages that this territory brings with its first level economy, but it is necessary to highlight more specific benefits for those looking to establish a company in Israel, these are:
• The legal protection of the government for its corporate directors and shareholders.
• The possibility of tax cuts to offshore companies, which require a simple procedure with the appropriate advice for their constitution.
• The opportunity to hire trained employees to promote the success of the company, as a consequence of a culture that prioritizes work.
• The option to form a limited company with no investment capital required, such as Limited by Shares Company (LTD).
Once the decision to establish a company is consolidated, a process will begin to make it materialize, where the first step will consist of looking for some type of Israeli commercial entity that suits your requirements:
Among the prominent enabling commercial entities are the company, which can be private or public, the foreign company, society, the self-employed, cooperatives, and non-governmental organizations (NGOs).
In the case of companies, all must register with the Secretary of Companies -Ministry of Justice-.
To register a company as a company in the Secretariat, certain documents must be submitted, such as the company registration application form, the Memorandum of Association, which establishes the corporate identity and the main objectives of the company, shareholders, and responsibility of shares issued-, among others.
A new corporation must have a registered agent and an office located in Israel to process the official servers and notifications.
A minimum of one shareholder is required for an Israeli corporation, with a maximum of 50 shareholders. The shareholders can be natural or legal persons, and they can also be local or foreign. Once the incorporation process is complete, new shares can be issued and transferred to someone else.
A high percentage of those who decide to start processing this process is advised by a team such as Creimerman since with the knowledge and experience acquired over the years we will be able to process most of the applications and represent the company in the office. of the Secretary of Companies, without major inconveniences.
Once the company has been registered with the Secretariat, it must register with the Tax Administration - Ministry of Finance -.
Among the obligations presented, companies must present monthly earnings on account accompanied by the payment of taxes. The taxes to be presented include Corporation Tax in installments, complementary rates of Corporation Tax regarding certain non-deductible expenses, withholding taxes on wages, Value Added Tax (VAT), and National Insurance.
Besides, all commercial companies must have permits to operate. Permits are generally granted by municipalities after prior approval from other government departments.
Also, it is necessary to open an account in a commercial bank, through which all the finances of the company will be handled, where you will be forced to present copies of the Articles of the Company and the Certificate of Registration, approved by a lawyer, besides, approval by a lawyer of the company's signature rights.
In conclusion, despite being a territorially small country, Israel represents a good opportunity to expand markets and generate new business, legal advice being necessary since we understand that foreign companies are not familiar with local regulations, customs, language and, ways to create businesses relations.
Regarding your decision to enter the Israeli market for the first time or if you decide to expand your current presence, we will be at your service, providing you with completely personalized service to guarantee your comfort and confidence.