Best Investment & Business Structuring Lawyers in Israel

About Investment & Business Structuring Law in Israel

Investment and business structuring law in Israel covers how businesses are formed, organized, and operated to attract investment while complying with local taxation, corporate governance, and regulatory requirements. It includes choosing entity types, establishing ownership structures, and planning cross-border activities for tax efficiency and regulatory compliance. Practical structuring also involves addressing foreign investment controls, transfer pricing, and incentive programs offered by the state.

For investors and Israeli residents alike, the right structure can affect liability, funding access, and ongoing administrative costs. A well planned structure supports scalable growth, protects assets, and clarifies roles and responsibilities among shareholders and managers. It often requires coordinating corporate law, tax rules, and industry specific regulations in parallel.

Note that Israeli corporate, tax, and regulatory regimes change periodically. Relying on up to date guidance from official sources helps ensure compliance and tax efficiency. See official government resources for current rules and interpretations.

Israel maintains a dynamic regime for corporate governance, incentives, tax planning and cross border investments that is regularly updated by the legislature and the Tax Authority.

Sources: Government of Israel, Israel Tax Authority

Why You May Need a Lawyer

Engaging a lawyer experienced in Investment & Business Structuring can prevent costly missteps and speed up regulatory approvals. Below are concrete scenarios that commonly require legal counsel in Israel.

• Setting up a foreign parent with an Israeli subsidiary - A foreign technology company wants to hold Israeli operations through a local subsidiary and an Israeli holding company. A lawyer helps design the ownership, share class structure, intercompany agreements, and exit strategies while aligning with the Law for the Encouragement of Capital Investments and transfer pricing considerations.
• Reorganizing a family business into a corporate structure - A family seeks succession planning by converting a partnership into a private company with clear shareholding and governance documents, including a shareholder agreement, vesting schedules, and dispute resolution provisions.
• Applying for investment incentives or subsidies - A manufacturing start-up looks to obtain tax concessions or reduced land or infrastructure costs under the Encouragement of Capital Investments Law. Legal counsel coordinates with the Investment Center and ensures eligibility and ongoing compliance.
• Executing a merger or acquisition in Israel - A multinational acquires a local business and needs detailed due diligence, transaction structuring, and post deal integration plans guided by Israeli corporate law and tax rules.
• Setting up a fund or SPV for local investments - An investor creates an Israeli special purpose vehicle to isolate risk, manage ownership, and satisfy know-your-customer and regulatory requirements for a fund administrator.
• Navigating cross border share transfers and tax planning - A non resident sells shares in an Israeli company and requires guidance on withholding taxes, capital gains treatment, and treaty relief under Israeli law and international agreements.

Local Laws Overview

The core frameworks shaping Investment & Business Structuring in Israel include the following laws and regulations. Each governs different aspects of formation, governance, incentives, and taxation.

• Companies Law, 1999 - This law governs the creation, management, and dissolution of companies in Israel, including directors duties, shareholder rights, and annual reporting obligations. Reforms have intensified governance and disclosure requirements in the last decade.
• Law for the Encouragement of Capital Investments, 1959 - This regime provides incentives for investments in designated areas and projects, including tax concessions and accelerated depreciation. Amendments over the years have refined eligibility and the scope of incentives.
• Income Tax Ordinance, 1961 - The framework for Israeli income tax, including corporate tax for resident and non resident entities, capital gains treatment, and tax residence concepts. It is frequently amended to reflect economic policy and international tax developments.

Recent trends include greater emphasis on transparent corporate governance, digitization of filing requirements, and alignment of incentives with international tax standards. For the newest provisions, consult the official pages of the Israel Tax Authority and the Government of Israel portal.

Recent amendments in Israel focus on governance transparency, tax compliance for cross border structures, and modernization of corporate filings.

Key official resources for these topics include:

• Israel Tax Authority - guidance on corporate taxation, capital gains, incentives and cross border tax issues.
• Government of Israel - official information on corporate law, investment incentives, and regulatory changes.
• Invest in Israel - official portal for investment incentives, regulatory procedures, and business registration guidance.

Frequently Asked Questions

What is the main purpose of the Israeli Companies Law?

The Companies Law governs the formation, governance, and dissolution of companies in Israel. It sets duties for directors and requirements for shareholder meetings and reporting. It also provides mechanisms for share transfers and capital maintenance.

How do I restructure a local startup into a private company in Israel?

Begin with a detailed plan and appoint a lawyer to draft a shareholders agreement and articles of association. You will need to file for incorporation, issue shares, and update the Registrar of Companies with changes in ownership and governance.

When do I need to involve a lawyer for cross border investments?

As soon as you plan to structure investments through Israeli entities or offshore vehicles. A lawyer helps optimize tax positions, ensure compliance with anti money laundering rules, and prepare transfer pricing documentation.

Where can I obtain official guidance on investment incentives in Israel?

Official guidance is available from the Invest in Israel portal and the Israel Tax Authority. They provide eligibility criteria and application procedures for incentives.

Why is due diligence important in structuring investments?

Due diligence uncovers potential liabilities, regulatory risks, and hidden obligations. It helps you tailor the structure to reduce risk and improve investment returns.

Can a foreign investor use an Israeli SPV for tax advantages?

Yes, a local SPV can be used to isolate assets and optimize tax positions within Israeli law. A lawyer can ensure proper substance, compliance, and transfer pricing alignment.

Should I register a new company before signing a shareholder agreement?

Usually yes. Incorporating first creates a formal framework for the shareholder agreement and clarifies ownership, rights, and remedies.

Do I need to appoint a director under the Companies Law?

Most Israeli companies require at least one director. The exact requirements depend on company type and size, and there are governance and disclosure obligations to observe.

Is there a minimum capital requirement for Israeli companies?

Israeli law does not impose a universal minimum capital for all company types, but certain sectors or incentives may specify minimums for eligibility.

How long does it take to complete corporate restructuring in Israel?

Simple restructurings can take 4-6 weeks, while complex reorganizations with tax and regulatory approvals may take 3-6 months. Timeline depends on diligence and regulator responses.

What is the capital gains tax treatment for share transfers?

Capital gains on Israeli residents and non residents vary by asset and residency. Tax planning is essential to determine any relief under treaties and the applicable tax rate.

How much do Investment & Business Structuring lawyers typically cost?

Fees range by complexity and region, with hourly rates commonly between 500-1200 ILS for mid sized firms. Fixed retainers for project based work are also common.

Additional Resources

Use these official sources to supplement legal advice and stay current with Israeli law and incentives.

• Israel Tax Authority - official body administering tax rules, corporate taxes, capital gains and cross border taxation guidance. See: https://tax.gov.il.
• Invest in Israel - government portal for investment incentives, regulatory guidance, and registering Israeli entities for investors. See: https://investinisrael.gov.il.
• Registrar of Companies and Partnerships - authority under the Ministry of Justice for company registrations and amendments. See: https://www.gov.il/en/departments/registrar-of-companies.

Next Steps

1. Define your structuring goals - Clarify investment type, jurisdiction, and desired tax treatment. Allocate a preliminary budget for legal and regulatory work. Time: 1 week.
2. Identify potential entities and structures - Decide between local subsidiary, holding company, SPV, or trust structure with the help of a qualified attorney. Time: 1-2 weeks.
3. Consult with a licensed Investment & Business Structuring lawyer - Seek a practitioner experienced with Israeli corporate law and tax incentives. Request a fixed scope and milestones. Time: 1-3 weeks for initial consultations.
4. Draft and review the formation documents - Articles of Association, shareholder agreements, and any incentive applications. Ensure alignment with the Encourgagement Law and tax planning. Time: 2-6 weeks depending on complexity.
5. Apply for incentives and registrations - Submit applications to the Investment Center and tax authorities, and register with the Registrar of Companies. Time: 4-12 weeks depending on program and regulator response.
6. Implement governance and compliance framework - Establish board structure, reporting cycles, and compliance policies. Time: ongoing; initial setup 2-4 weeks.
7. Review and update regularly - Schedule periodic legal reviews to reflect regulatory changes and business evolution. Time: annually or as needed.