Israel has a very powerful national economy with well-developed international connection. Moreover, there are business rules and the policy of taxes which are really easy to understand, and the level of technology is quite strong. Thanks to the state it is not difficult for other citizens to get to economics of the country and create their own business there. And the article https://auditing.co.il/en/bookkeeping-services/start-business/ will help you to learn how to do it properly.
Is it possible to open my own business without legal arrangements?
You cannot open a business without legal arrangements because the financial discipline is extremely strict in the country. For example, if you are not allowed to make a tax receipt (so-called “heshbonit mas”) or have a receiving slip (they call it “kabala”) you can face serious consequences from the authorities. Fortunately, there is an accountant auditor who will find the way not to break the rules, get benefits. You can find more information about these specialists here: https://auditing.co.il/en/
How to decide on the form
There are many factors which define the choice such as activity (for example, license), the regions, how many owners, obligations, turnover in a year, taxes, representation department or subsidiary, etc. All these things can be chosen by an auditor.
In Israel there are several forms: cooperative, entrepreneur, etc. The most widespread are a LLC (so-called “hevra baam”) and an entrepreneur.
The easiest type of an entrepreneur is an esek patur, which does not have not to pay VAT. But “liberal professions” cannot get such a privellege. If a business is in this category, your accountant will help. This form does not allow to issue receipts, but you need to make “tax statement for the released entrepreneurs” annually, but the turnover is limited. For example, 2 years ago it was about 98700 shekels.
In case you need a bigger one or need to issue tax receipts, you should open the esek murshe, because the turnover is not limited for such form As for a summary report, it is performed once a year. On VAT you are to report every month (when you have large incomes) or two.
If there are large investments, more than one owner it is to be registered as LLC, which claims more complicated reports. You cannot open it without an accountant.
How non-residents can start
A business visa does not exist Israel, and you will not get a permit. But for those who have business there are no visa restrictions to visit Israel. But yo can develop business from other places and have a trustee who makes all the necessary operations.
You need to start a folder there:
1. Office of Value Added Tax. Here you will get a registration code and a certificate. Moreover, you will be able to issue receipts.
2. Income Tax Administration. The entity establishes a tax size, reporting information, accounting method. If you are an entrepreneur supported by an auditor, you can be free from taxes for the first 365 days of work.
3. National Insurance Service. The organizations defines insurance contributions which will allow get pensions and social guarantees annualy. In addition, all the citizens get the benefit when reaching the appropriate age.
As for individual entrepreneur, the registration is done in this way.
Reporting is always mandatory irrespective of different factors. As for the reports, you will need to submit yhem to all these organizations and pay taxes to the country treasury.
If you need to register a company, you will have to pass through 2 stages.
The first one includes making documents which you will need to submit to the Registrar of Companies and paying a fee (it was 2600 shekels 2 years agot), lawyer work starting from 1000 shekels.
The second stage: reports and taxes (also a tax (agra) to the Registrar of Companies)
Looking for a proper name
The most important thing is the uniqueness. Moreover, you cannot register a company if a name violates society rules or has insulting parts.
The name choice also depends on your organization form.
Tips on how to choose a company name for beginners:
1.The essence of the business in the name.
2. Your own brand using your name.
3. The name must be easily understood and pronounced. =
Israel taxes
The information for 2017:
• Income tax – 10 – 50%
• Corporate – 23%
• Dividends – 25 – 32%
• Social Insurance – 3,5 – 17,5%
• VAT – 17%
Deduction payment and reporting
It is often hard to deal with taxes for every businessman, especially in Israel.
If you make a mistake concerning registration, tax payment and rate and other important issues, you may face different fines and restrictions, that’s why itis extremely important to do it properly.
As for reports to esek patur, it is quite easy, because this business type has no VAT if the established turnover amount has not been risen for the 1st year.
It is very convenient that you can get reports from the Administration by mail and send the reports in this form (your seal is mandatory) and even via the Internet (Income Tax Administration website). The reports depend on business, its turnover (annual) and other factors.
Vital to remember that you need an auditor when registering. The specialist usually requests documentation and pay all the things and you will be free from the tiring paper routine and focus on profits. Almost 98% of businessmen use such service.
Of course you can open hevra baam by yourself but the certification of annual reporting by the rohe heshbon is necessary. It is advisable to find one auditor for all the work. It will work much better.
If write-off is correct you may get a tax cut
It is vital to record the expenditures properly or assign this to the accountant from the very beginning. If everything is done compenetly, you can legally reduce VAT payment size. But if the authorities will think that you attempt to hide your income, you will be strictly punished by the law and get large fines even for mistakes and inaccurate work.
The reasons to contact us
- Successful beginning. Moreover, it helps to have more time other important things such as development. If you are supported by a professional mentor, you will have much more chances to succeed.
- Integrated approach. The service with great experience in all business spheres is created just for our customers, who are extremely important to us. Shmuel Brodetsky Rohe Heshbon has a great range of additional services in addition to filing in documents
- Transparent work. For beginners it is really hard to study the sphere of accounting that’s why we always explain what we are going to do for you in all the details and in layman’s terms.
