It is a challenge to spread into a new business territory. Are you exploring your business opportunities overseas? Israel might be an option for you to consider. Israel state tenders have great potential for international companies to win projects and starting a business in Israel, as well as other business opportunities it has to offer.
A step towards a business in Israel
Whether your company applied for a state tender in Israel and won, or decided to consider the option of starting a business in Israel.
Now, it is time to take the next step towards the actual conduction of business activity in Israel. According to the Israeli local law, each company or business entity starting a business activity in Israel is subjected to it and has two optional legal structures:
- Establish an Israeli company.
- Register an Israeli branch operated by a fiscal representative
Our recommendation is to start the process before the actual business activity starts.
To choose the most suitable legal structure for your business activity needs.
To register or establish the relevant business entity of your choice before conducting any business activity in Israel.
Note that the whole process might take a while.
Fiscal representative vs. Israeli company
What’s the plan?
Is your business activity planned to be a short-term or long-term activity?
As a foreign company, one of the main factors in the decision of the preferable legal structure is the length of the project.
To choose the model, which will serve your business in the best way.
The model of a fiscal representative office in most cases will be the preferable choice for project contractors, services providers, consultants of any kind, both under a short-term or a long-term agreement.
Register a fiscal representative office in Israel
The appointed fiscal representative is required to be a local representative office. The appointed representative is responsible for the legal and financial issues for the foreign company; taking care of all tax-related issues, including representation before the local Israeli authorities.
The fiscal representative is familiar with the local law and will make sure the company meets all the requirements of the local authorities. The representative is also able to bridge the cultural, business culture, and legal gaps for you.
Therefore, it might suit your business needs. Furthermore, the fact that it is suitable for both short-term projects and long-term business activity comes as an advantage too.
Note: In most cases, the representative will not handle the professional and operational aspects of the organization’s activity in Israel.
Yet, there is a downside to this model, which is the fact that legally the office in Israel is subjected to the head office overseas and under its supervision. So, if your business needs require independence with full legal freedom, read on.
Establishment of an Israeli company
It is about maximizing the scope of your business. If you are about to base an ongoing business activity in Israel and therefore need an office that can work independently without been subjected to the approval of the head office abroad. You should establish a local permanent office, an office that functions as an independent unit, as an Israeli company essentially.
If this is your case, you should be familiar with the local Israeli companies’ law.
The local companies’ law (1999) states that a foreign company, which manages its business activity in Israel, is required to register with the Ministry of Justice, Registrar of Companies.
The Company Law, 1999, Section 1 has defined a foreign company as:
“… a company registered outside Israel and anybody of persons, other than a partnership, registered or incorporated outside Israel.”
The Companies Law, Section 346, demands that:
“A foreign company shall not keep a place of business in Israel, and in particular shall not maintain an office for the transfer of shares or for the registration of shares, unless registered as a foreign company under the provisions of this section and unless it pays the registration and publication fees prescribed by the Minister under this section.”
A foreign company is required to register with the tax authorities in Israel, including the VAT, income tax and national insurance authorities.
The registration process should be completed before the company commenced any business activity in Israel.
Applications to register a foreign company must be submitted to the Registrar of Companies within one month following the establishment of the business.
The documents a foreign company requires to fill in and present are:
(1) A copy and translation of the company’s Articles of Association authenticated by a notary in Hebrew, which confirms the accuracy of the translation. Signatures are not required on a copy of the regulations.
(2) A list of the directors of the company.
(3) The name and address of Israeli representatives authorized to receive documents and mail for the company.
(4) A copy of the document appointing a representative to handle the company’s affairs and to act under a power of attorney.
(5) The certificate of incorporation of the company from its state of origin, signed by a notary and a document showing that the company’s registration is still valid and active as of the date the application is filed.
In the Ireland-Israel chamber, we support Irish companies in the process while starting a business in Israel. Our professional team of members will provide your company with the relevant services whether you are looking for a fiscal representative in Israel or need our assistance to register as an Israeli company. From filling the application documents towards the achievement of the desired recognition as an Israeli company.
Furthermore, after receiving the recognition as an Israeli company; we can provide your company with the required financial and fiscal services needed.