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Investing in Israel: Law, Taxes, and the Path of a Foreign Investor
| Section | What It Covers |
|---|---|
| Legal Environment | What Israeli legislation says about foreign investments, applicable laws |
| Tax Benefits | Tax reductions, preferences, double taxation avoidance agreements |
| Required Documents | What papers and data are needed to start investing: passport, sources of funds, legal address |
| Procedures | Steps an investor goes through—from due diligence to account opening and registration |
| Where to Seek Help | List of official and private organizations assisting foreigners |
| Conclusion | Summary of Israel’s advantages and advice to consult a lawyer for a confident start |
Israel is not only a high-tech powerhouse but also a country with a well-designed system to support foreign investors. Here, you’ll find not only a vibrant market but also a solid legal framework that protects your capital. Let’s break down what you need to know about legislation, taxes, documents, and organizations if you’re a foreigner looking to invest in Israel.
Legal Environment: What Does the Law Say?
Israel is open to foreign investment. The law does not restrict foreigners from owning companies, real estate, or other assets. Moreover, Israel has signed over 50 investment protection agreements with various countries, including Germany, France, the USA, Canada, and others.
The main law governing investments is the Encouragement of Capital Investments Law. It provides investors with tax benefits, subsidies, and, in some cases, direct government support.
There are also industry-specific laws regulating investments in startups, agriculture, energy projects, real estate, and more.
Tax Benefits for Foreign Investors
Israel offers various tax incentives, especially in high-tech zones and for new enterprises. Here are the main advantages:
- Reduced Corporate Tax Rate — from 7.5% to 16% for companies meeting "priority enterprise" conditions.
- Dividend Tax Exemption — for certain foreign shareholders under specific conditions.
- Double Taxation Avoidance Agreements — with over 50 countries, including Russia, Germany, the USA, and the UK.
- Startup Investment Benefits — including the ability to deduct investments as expenses.
Special tax regimes are available under the "Innovation Authority" program and for companies certified as R&D-oriented.
What Documents Are Needed to Start?
The procedure depends on the type of investment (company, real estate, venture), but the general outline is as follows:
- Passport — with a valid visa (if required).
- Incorporation Documents — if starting a company (charter, list of shareholders, etc.).
- Proof of Source of Funds — bank statements, documents on the origin of capital.
- Tax Residency — a certificate from your tax authority (sometimes required for double taxation avoidance agreements).
- Legal Address in Israel — for company registration or real estate purchase contracts.
Where to Seek Help?
To simplify the investor’s journey, both government and private organizations operate in Israel:
- Invest in Israel — the official portal of the Israeli Ministry of Economy. Provides support, consultations, and connects investors with projects. (Website in English)
- Israel Innovation Authority — helps those looking to invest in technology and startup projects. (Some Russian information available on external resources, but the official site is in English)
- Israel Land Authority — handles state land and real estate. (Website available in Hebrew and English)
- Private Law Firms — private legal firms with English-speaking (and often Russian-speaking) consultants. For example: Fischer (FBC & Co.) (in English) or Herzog, Fox & Neeman (in English)
- Banks and Accountants — provide services for account opening, tax planning, and transaction support. Major banks with English support: Bank Leumi (in English), Israel Discount Bank (in English)
How Does the Process Work?
Suppose you want to buy commercial real estate or invest in a startup. You find the asset or project, then, through an Israeli lawyer, conduct due diligence, sign a contract, open an account in an Israeli bank, and transfer funds. All transactions are transparent and regulated by the Bank of Israel.
Company or property registration takes place in the relevant registries: Ministry of Justice (in English), Registrar of Companies (in English), Israel Tax Authority (in English).
Conclusion
Israel offers a unique combination— a secure legal framework, generous tax incentives, and advanced infrastructure. If you’re ready to invest in a stable and innovative economy, Israel awaits you.
Be sure to consult a lawyer and tax specialist before making decisions. Every case is unique, and competent legal support is the key to a successful investment.