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Startup nation with world-leading innovation ecosystem
Region
MIDDLE EAST
Corporate Tax
23%
Setup Time
4 weeks
Currency
ILS
Israel, a small nation with outsized tech sector impact, has earned its "Startup Nation" reputation through innovation density. The country's company registration framework and venture capital ecosystem support business setup for technology-focused operations.
With a population of 9.5 million, Israel offers Mediterranean lifestyle with intense business culture. Hebrew and Arabic are official languages, with English widely used in business and tech. The climate is Mediterranean in coast, desert in south.
Healthcare is excellent through mandatory insurance. Safety involves security considerations due to geopolitical situation, though daily life in most areas functions normally. The cost of living is high, particularly Tel Aviv housing.
The entrepreneurial culture and tech density create unique opportunities for innovation.
Corporate tax rate stands at 23%. Personal income tax reaches 50% on higher incomes. VAT applies at 17%. R&D incentives support innovation. Capital gains on qualifying tech exits may receive preferential treatment.
The Israeli shekel is freely traded and has strengthened significantly. The tech sector and venture capital ecosystem drive economic dynamism. US and international connections are extensive.
Company registration through the Registrar of Companies is established. The Ltd (private company limited by shares) is the standard vehicle. Foreign ownership faces no general restrictions.
Company formation takes approximately 1-2 weeks. Minimum capital requirements are nominal. At least one director is required. Annual compliance includes filing statements.
The Israel Securities Authority and Bank of Israel share oversight of crypto matters. Comprehensive crypto license frameworks are developing. The tech sector has significant crypto and blockchain activity despite regulatory uncertainty.
Israel's tech ecosystem naturally engages with digital assets, though regulatory clarity continues evolving.
Gambling is largely illegal in Israel, with limited exceptions. No gambling license framework exists for commercial operators.
Security situation requires awareness but should not deter most business operations. The small domestic market means export orientation is essential. Cultural intensity and negotiation style differ from other markets.
Banking access is available through Israeli banks. Professional services are highly developed for tech and venture transactions.
Israel suits technology companies, R&D operations, and businesses seeking innovation ecosystem access for their business setup.
Local: Ltd
Local: PBC
Local: Branch
| Corporate Tax Rate | 23% |
| Personal Income Tax Rate | 50% |
| VAT / Sales Tax | 18% |
| Capital Gains Tax | 25% |
| Withholding Tax | 25% or 30% |
| Reduced Corporate Tax Available | Yes |
| Non-Resident Withholding Exempt | No |
| Tax Treaty Network | Yes |
| Banking Access | MEDIUM |
| Financial Privacy | LOW |
| Currency Controls | NONE |
| Local Bank Account Required | No |
| Non-Resident Bank Account Allowed | Yes |
| Physical Presence for Banking | No |
| Banks Restrictive (High Risk) | Yes |
| AML Officer Required | No |
| MLRO Required | No |
| Compliance Officer Required | No |
| Data Protection Officer Required | No |
| Bookkeeping Frequency | Annual |
| Local Bookkeeping Required | Yes |
| Mandatory Audit | Yes |
| License Required | Yes |
| Local Director Required | No |
| Local AML Director Required | No |
| Local Legal Address Required | Yes |
| Local Physical Office Required | Yes |
| Required Share Capital | $500,000 |
| Capital Maintained in Account | Yes |
| Compliance Program Required | Yes |
| Travel Rule Compliance | FATF Travel Rule |
| Business Plan Required | Detailed business plan with AML/KYC procedures, risk assessment, and operational details required |
| Personnel Required | Compliance Officer, AML Officer, qualified directors with integrity assessment |
| Insurance Required | No |
| Remote Incorporation Possible | Yes |
| 100% Foreign Ownership | Yes |
| Min. Shareholders | 1 |
| Min. Directors | 1 |
| Shareholder/Director Same Person | Yes |
| Registry Public | No |
| Registry Access | License register maintained by Capital Market, Insurance and Savings Authority (CMISA) |
| Renewal Period | Annual |
| Accounting Filing Required | Yes |
| Accounting Filing Frequency | Annual |
| Financial Statement Required | Yes |
| Financial Statement Frequency | Annual |
| Accounting Audit Mandatory | Yes |
| Compliance Audit Mandatory | Yes |
| Technical Audit Mandatory | No |
| Corporate Income Tax Applicable | Yes |
| Dividend Tax Applicable | Yes |
| Capital Gains Tax Applicable | Yes |
| Territorial Tax Regime | No |
| VAT Applicable | Yes |
| Regulators | Capital Market, Insurance and Savings Authority (CMISA), Israel Money Laundering and Terror Financing Prohibition Authority (IMPA) |
| Licensing Fee | $25,000 |
| Licensing Fee Details | Application fee plus ongoing annual supervision fees. Fees vary based on scope of activities. |
| Permitted Business Models | Exchange, Custody, Wallet services, Payment processing |
| Permitted Activities | Crypto-to-fiat exchange, crypto-to-crypto exchange, custodial services, payment services |
| Restricted Activities | Privacy coins subject to enhanced scrutiny |
| Cross-Border Service Allowed | Yes |
| Physical Inspection Required | No |
| Derivatives Allowed | No |
| RWA Tokenization Allowed | No |
| App Store Listing Allowed | Yes |
| Crypto Custody Allowed | Yes |
| License Required | Yes |
| Local Director Required | No |
| Local AML Director Required | No |
| Local Legal Address Required | No |
| Local Physical Office Required | No |
| Capital Maintained in Account | No |
| Compliance Program Required | No |
| Business Plan Required | N/A |
| Insurance Required | No |
| Remote Incorporation Possible | Yes |
| 100% Foreign Ownership | No |
| Shareholder/Director Same Person | Yes |
| Registry Public | No |
| Registry Access | false |
| Renewal Period | Not applicable - state monopoly |
| Accounting Filing Required | No |
| Financial Statement Required | No |
| Accounting Audit Mandatory | No |
| Compliance Audit Mandatory | No |
| Technical Audit Mandatory | Yes |
| Corporate Income Tax Applicable | Yes |
| Dividend Tax Applicable | Yes |
| Capital Gains Tax Applicable | No |
| Territorial Tax Regime | No |
| VAT Applicable | No |
| Licensing Fee Details | State monopoly only |
| Permitted Business Models | National lottery, sports betting (soccer/basketball) via state operators only |
| Permitted Activities | All commercial gambling is prohibited. Online gambling, casinos, poker, slot machines are illegal. Social casino games with no real-money prizes operate in legal gray area. |
| Restricted Activities | false |
| Cross-Border Service Allowed | No |
| Physical Inspection Required | No |
| License Required | Yes |
| Local Director Required | No |
| Local AML Director Required | No |
| Local Legal Address Required | Yes |
| Local Physical Office Required | Yes |
| Required Share Capital | $4,000,000 |
| Capital Maintained in Account | Yes |
| Compliance Program Required | Yes |
| Travel Rule Compliance | FATF compliant |
| Business Plan Required | Comprehensive business plan with risk management, compliance procedures, and operational details |
| Personnel Required | Qualified directors, compliance officer, controlling shareholders subject to integrity assessment |
| Insurance Required | Yes |
| Insurance Details | Professional indemnity insurance may be required depending on license type |
| Remote Incorporation Possible | No |
| 100% Foreign Ownership | Yes |
| Min. Shareholders | 1 |
| Min. Directors | 1 |
| Shareholder/Director Same Person | Yes |
| Registry Public | Yes |
| Registry Access | Capital Market, Insurance and Savings Authority (CMISA) maintains register of licensed entities |
| Renewal Period | Annual |
| Accounting Filing Required | Yes |
| Accounting Filing Frequency | Annual |
| Financial Statement Required | Yes |
| Financial Statement Frequency | Annual |
| Accounting Audit Mandatory | Yes |
| Compliance Audit Mandatory | Yes |
| Technical Audit Mandatory | No |
| Corporate Income Tax Applicable | Yes |
| Dividend Tax Applicable | Yes |
| Capital Gains Tax Applicable | Yes |
| Territorial Tax Regime | No |
| VAT Applicable | Yes |
| Regulators | Bank of Israel (banking), Capital Market, Insurance and Savings Authority (CMISA), Israel Securities Authority (ISA) for payment services |
| Licensing Fee | $15,000 |
| Licensing Fee Details | Application fee NIS 15,000-50,000 depending on license type. Minimum equity requirement NIS 500,000-4,000,000 depending on activities. Payment Services Law came into effect June 2024. |
| Permitted Business Models | Credit services, financial asset services, payment services, payment initiation |
| Permitted Activities | Lending, currency exchange, payment processing, remittances, credit brokerage |
| Restricted Activities | Banking requires separate license from Bank of Israel. Investment advice requires ISA license. |
| Cross-Border Service Allowed | Yes |
| Physical Inspection Required | Yes |