Corporate Law at Israel
Corporate law in Israel is characterized by a dynamic legal framework that fosters innovation and entrepreneurship, making it a hub for startups and multinational corporations alike. The legal environment is underpinned by a robust regulatory system that ensures transparency, investor protection, and efficient corporate governance.
🏛️ Legal Framework and Company Types
Key Legislation
Companies Law, 1999: The primary statute governing corporate entities in Israel, outlining the formation, operation, and dissolution of companies.
Common Business Entities
Private Limited Liability Company (Ltd.): The most prevalent form, offering limited liability to its shareholders.
Public Company: A company whose shares are listed on the Tel Aviv Stock Exchange (TASE), subject to stringent regulatory oversight by the Israel Securities Authority (ISA).
Partnerships: Including general and limited partnerships, where liability varies depending on the structure.
Sole Proprietorship: Owned and operated by a single individual, bearing unlimited liability.
📝 Incorporation Process
Registration: Companies must register with the Israeli Registrar of Companies, submitting necessary documentation such as Articles of Association and declarations from directors and shareholders.
Digital Communication: As of June 2023, all companies are required to maintain a digital address (email or mobile number) for official communications. This facilitates efficient interaction with the Registrar.
Capital Requirements: There is no minimum capital requirement for incorporation; however, companies often start with a nominal capital, such as 100 NIS.
📊 Corporate Governance and Compliance
Board of Directors: Public companies must have a minimum of three directors, with at least one being independent.
Shareholder Rights: Shareholders possess rights to vote on key decisions, including mergers and financial statements.
Annual Reporting: Companies are obligated to submit annual reports detailing any changes in company structure, directors, or shareholders. Failure to comply can result in fines and legal complications.
💼 Taxation Overview
Corporate Tax Rate: The standard corporate tax rate is 23%.
Value-Added Tax (VAT): Imposed at a rate of 17% on most goods and services.
Withholding Tax: Dividends paid to non-resident shareholders are subject to a 25% withholding tax, which may be reduced under applicable tax treaties.
Capital Gains Tax: Capital gains are taxed at 23% for companies.
⚖️ Regulatory Authorities
Israel Securities Authority (ISA): Regulates the securities market, ensuring transparency and protecting investors.
Registrar of Companies: Oversees company registrations and maintains corporate records.
🧑⚖️ Legal Service Providers
For comprehensive legal assistance in corporate matters, consider consulting the following esteemed law firms:
Gornitzky & Co.: Offers a multidisciplinary approach to corporate law, covering company formation, governance, and compliance.
Herzog, Fox & Ne'eman: Provides expertise in corporate finance, mergers and acquisitions, and regulatory compliance.
Amit, Pollak, Matalon & Co.: Specializes in high-tech ventures, venture capital, and securities law.
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