When a company is incorporated and registered in Israel, it does not matter where the company's owner resides, as the law governing the company is the Israeli law. This means that the company must act pursuant to Israel's corporate law. In order to ensure that your company meets all legal requirements, it is always recommended to seek legal advice from a lawyer specializing in company and corporate law. Corporate laws change considerably from country to country, and as foregoing, the corporate laws relevant to each company are the laws of the country of its registration and incorporation. In case a person residing outside Israel is the owner of an Israeli company, it is recommended to use the services of a lawyer dealing with companies and corporations in Israel, who is familiar with the local laws and who speaks Hebrew. This is the only way to ensure that although the owner does not reside in Israel, the company he owns will comply with all requirements of Israeli corporate law.
A company incorporated in Israel must comply with all reporting duties. The reporting duties are different for private companies and public companies. It is important to file all periodic reports and be familiar with all cases requiring reporting to different authorities. This is even more important when dealing with a publically traded company, since failure to comply with the reporting duties may entail commencement of administrative enforcement proceedings against it. Since reporting duties change between different countries, it is important for the company to receive its legal advice from a lawyer in Israel specializing in company and corporate law, rather than relying on the advice of a lawyer from another country.
The Companies Law, 5759-1999, sets various administrative requirements from companies incorporated and registered in Israel. Here too, of course, there is a difference in requirements by type of incorporation and whether the company is traded on the stock exchange. The administrative requirements relate to the appointment of directors and executives in the company, convening of the general meeting, appointment of an internal auditor etc. Similarly to the reporting duties, administrative requirements are also not identical in different countries. In order to ensure that your company complies with all administrative requirements of Israeli law, you require the assistance of a lawyer in Israel who is familiar with the requirements of the Companies Law. This is especially important when the company's owner does not reside in Israel, and his knowledge of the governing rules in Israel is less thorough. In such a case, it is highly recommended to seek legal services from a company and corporate lawyer residing in Israel, rather than a foreign lawyer from the owner's country of residence. In this way, the company's owner can be sure that although he is not physically in Israel, his company ensures full compliance with the requirements of Israeli law.
Paying corporate tax in Israel
The issue of paying corporate tax in Israel is complex. There are different tax plans according to the company's size, location, operations and more. The difference in the tax rate to be paid can be very substantial. Therefore, it is very important to study the different tax plans and adjust the plan to the specific company. In addition to knowledge of the law, it is also necessary to be familiar with Israel's income tax systems, in order to understand how to file an application for tax calculation under a certain plan. On this matter, it is important to have a company and corporate lawyer in Israel who is familiar with law and government agencies and who can ensure that the tax rate paid by the company is indeed the rate appropriate for it, thus saving the owner significant amounts of money.
Eli Shimony - Israeli law firm representing clients on all civil legal issues in Israel. For any questions please contact us and we will be happy to assist.
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The above article is a general information only and it is not intended to replace a legal advice.