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Top Reasons to start A Business In Israel

business in Israel

Israel is one country that has succeeded in creating a thriving economic climate for both its citizens and foreign residents. If you are a foreigner considering starting a business in Israel, feel free to get your hopes up.

Investing in the Israeli economy will fetch you profit in the long run. Still in doubt? This article will help you make a decision, hopefully, a smart one.

Why You Should Consider Starting a Business in Israel

There are many reasons you should do business in Israel and some of the most common include:

●    A Variety Of Business Formations to Choose From

There are different types of business formations in Israel and each of them has requirements that you will need to fulfill. Fortunately, most of these forms of business are open to foreigners.

The most common types of businesses in Israel are sole proprietorship, public company, private company, legal partnership, cooperation, a foreign company, and non-profit organizations.

Sole Proprietorship

The sole proprietorship business which is also known as individual entrepreneurship is classified into two (“Osek Patur” and “Osek Murshe”).

Osek Patur describes a small business with a yearly financial turnover of not more than 102,292

NIS. It is suitable for foreign business owners that trade in goods and merchandise.

If you are, however, starting a business in Israel that involves providing professional services, then the Osek Patur is not for you. These professional services include healthcare, legal, accounting, insurance, educational, architectural, and engineering services. You will need to go a step higher even when your annual turnover is below the Osek Patur threshold.

Osek Murshe is recommended for those who offer professional services and for businesses with an annual turnover that exceeds the Osek Patur limit. This class of business pays Value Added Tax (VAT) and can employ as many workers as it wants.

Private Limited Company

If you are a foreigner who is thinking of starting a business in Israel with limited resources, this is what you should be looking at. This type of business structure is very common in Israel.

It requires just one director and no more than fifty shareholders. It is not authorized to offer its debentures or shares for public sale.

Public Limited Company

This kind of company requires a minimum of two directors and seven shareholders. It is expected to publish its financial report every year and its shares and debentures can be sold to the public.

Legal Partnership

A legal partnership may include limited or unlimited partners. True, it is not so common in Israel but it does exist. In a legal partnership, the unlimited partner usually manages the business and is liable for the debts of the business.

The limited partner, on the other hand, does not participate in the management of the company. This means that a limited partner must have an unlimited or general partner for a partnership to be legal. The liability of the limited partner does not exceed the sum invested in the partnership.


Common in the agriculture and transportation sector, this type of business entity can be formed by one or more individuals or legal entities with the same interest. Starting a business in Israel with this kind of structure involves a lot of planning and resources. Different cooperatives can also come together to set up a business cooperative for making a profit.

Foreign Company

A foreign company can decide to set up a branch, a subsidiary, or a representative office in Israel. In situations where the foreign company decides to set up a branch or a representative office, the parent company is held accountable for the actions of its subdivisions.

If, however, the foreign company has a subsidiary in Israel, the latter is liable for its actions. A subsidiary of a foreign company is considered a separate legal entity in Israel.

Non-profit Organizations

As the name implies, this kind of organization is set up for charity and not for profit. The non-profit organization can operate as an academic institution, hospital, or other charitable establishment.

●    Impressive Business Environment

Those starting a business in Israel know that the environment is conducive to trade and investment. Israel has a stable financial climate and that is why it is a good place to do business.

In the first quarter of 2022, a report revealed that Foreign Direct Investment (FDI) in Israel rose by 104175.40 USD Million. The Israeli business environment poses very little risk, allowing businesses to thrive and industrialists to meet their investment goals.

●    Infrastructure

The availability of basic infrastructures in the country is another reason you should consider starting a business in Israel. The availability of different means of transportation and ports makes it easy to travel and move goods from one place to another in Israel. There are many workspaces available for rent and lease in the major cities of Israel.

●    Highly Educated and Skilled Workforce

Over the years, Israel has invested heavily in the education sector. The country boasts of technical schools, research centers, universities, and the military where people are trained in specific fields such as engineering and technology.

Every year,   a large number of young and vibrant adults graduate from these Israeli tertiary institutions. Not only are most of these fresh graduates smart and innovative, but many of them are also equipped with skills to tackle challenges in the workplace.

Apart from the young educated workforce in Israel, there are skilled workers who bring years of experience to the table. These people work alongside the highly educated workforce to solve work-related challenges and ensure productivity. The availability of a high-quality workforce is another reason why starting a business in Israel is a good decision.

●    Technology and Innovation

In this time and age, nothing compares to doing business in technologically advanced countries. Not only does technology make work easy, but it also makes it fast.

Israel is highly advanced in technology. It presents both local and foreign businesses with innovative approaches to solving business-related challenges. You will be saving time and money when you choose to do business in a tech-driven country like Israel.

●    Favorable Government Policy

The Israeli government has developed policies that benefit both local and foreign investors with plans of starting a business in Israel. The tax reduction policy by the government makes it easy for foreign businesses to set up branches and offices in the country without fear of paying so much. There are also marketing and network institutions as well as vast R&D support programs that help start-up companies to gain ground in the Israeli market.

●    Fantastic Quality of Life

If you are thinking of starting a business in Israel, know that the country has everything it takes to make life comfortable for its residents. The healthcare system is remarkable. There’s everything you need to survive in the country from standard accommodation to healthy food to a clean and safe environment and even work-life balance.

●    Geographic Location

The distance between the major cities in Israel is quite short making it easy to do business in the country. You can easily transport goods from one destination to another in the country. Plus, Israel maintains good relations with neighboring countries. So there is room for expansion and foreign trade when your business grows.

Like most countries, there are procedures for starting a business in Israel as a foreigner. Once you fulfill the requirements for setting up the type of business you want, you can commence activities almost immediately.

Good thing is, that business registration doesn’t take so much in Israel. You can count on us to help you facilitate the process. Contact us today for your business advice, inquiries, and surveys. We are here to help you achieve your goal of establishing a business in Israel in a short time.

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