Israel is known for its vibrant start-up ecosystem and has a rapidly growing economy. The country is home to many successful businesses and entrepreneurs, including many expats. If you’re an expat interested in self-employment or starting a business in Israel, this guide will provide you with essential information on how to get started.
How Self-Employment Works for Expats in Israel
Expats who want to work as self-employed individuals in Israel must obtain a work permit from the Ministry of Interior. To do this, you must first find an employer who is willing to sponsor your work permit. Once you have a sponsor, you can apply for a B-1 work permit, which is valid for one year and can be renewed annually.
Another option is to obtain a self-employment visa, which allows you to work as a self-employed individual in Israel for up to 24 months. To be eligible for this visa, you must provide proof that you have sufficient funds to support yourself and your business during your stay in Israel.
How to Register as Self-Employed in Israel
To register as self-employed in Israel, you must follow these steps:
Obtain a tax identification number: You can do this by visiting the nearest branch of the Israel Tax Authority and filling out an application form.
Register for VAT (value-added tax): If your business will have an annual turnover of more than NIS 100,000, you must register for VAT. You can do this by visiting the Israel Tax Authority website and filling out an online application.
Register for National Insurance: You must register for National Insurance with the National Insurance Institute within 30 days of starting your business. You can do this by visiting a National Insurance Institute branch and filling out an application form.
Register with the Companies Registrar: If your business will be a company or partnership, you must register with the Companies Registrar. You can do this by visiting the Registrar’s website and filling out an online application.
Open a business bank account: Once you have completed the above steps, you can open a business bank account with any Israeli bank.
Can You Work as a Digital Nomad in Israel?
Yes, you can work as a digital nomad in Israel, but you must obtain a work permit or self-employment visa, as described above. Israel has a fast and reliable internet connection, making it a great destination for digital nomads. Additionally, there are many co-working spaces and networking events available for entrepreneurs and freelancers.
How to Start a Company in Israel
To start a company in Israel, you must follow these steps:
Choose your business structure: You can choose to start a sole proprietorship, partnership, or limited liability company (LLC). An LLC is the most common business structure in Israel, as it offers liability protection for shareholders.
Choose a business name: Your business name must be unique and not already registered with the Companies Registrar.
Register with the Companies Registrar: You must submit a registration form to the Companies Registrar, along with any required documentation, such as a copy of your ID, proof of address, and company bylaws.
Obtain a tax identification number: As mentioned above, you must obtain a tax identification number from the Israel Tax Authority.
Register for VAT: If your business will have an annual turnover of more than NIS 100,000, you must register for VAT.
Register for National Insurance: You must register for National Insurance with the National Insurance Institute within 30 days of starting your business.
Open a business bank account: Once you have completed the above steps, you can open a business bank account with any Israeli bank.
How to Set Up a Company in Israel
To set up a company in Israel, you must follow these steps:
Choose your business structure: Decide whether to start a sole proprietorship, partnership, or limited liability company (LLC).
Choose a business name: Select a unique business name that is not already registered with the Companies Registrar.
Draft company bylaws: If you are starting an LLC, you must draft company bylaws that outline the management structure, shareholder rights, and other important details about the company.
Submit registration documents: File the company’s registration documents, including the bylaws, with the Companies Registrar. You can submit these documents online or in person.
Obtain a tax identification number: You will need to obtain a tax identification number from the Israel Tax Authority.
Register for VAT: If your company will have an annual turnover of more than NIS 100,000, you must register for VAT.
Register for National Insurance: You must register for National Insurance with the National Insurance Institute within 30 days of starting your business.
Open a business bank account: Once you have completed the above steps, you can open a business bank account with any Israeli bank.
Incentives and Programs for Expats
Israel offers several incentives and programs to encourage expats to become self-employed or start a business in the country. These include:
Innovation visas: This program allows foreign entrepreneurs and investors to obtain a two-year visa to live and work in Israel.
Investment grants: The Israeli government offers grants to companies that invest in research and development in certain sectors, such as biotech and cybersecurity.
Incubators and accelerators: Israel has many incubators and accelerators that offer support and resources to startups, including access to mentors, investors, and networking opportunities.
Tax incentives: Israel offers various tax incentives to encourage investment and innovation, including tax breaks for companies that invest in certain sectors or regions.
Startup Nation Central: This nonprofit organization connects startups with investors and provides resources and support for entrepreneurs.
Israel is a great place for expats who want to become self-employed or start a business. With a supportive ecosystem for entrepreneurs, a thriving start-up culture, and various incentives and programs, Israel provides many opportunities for those looking to start a business venture. By following the steps outlined above, expats can easily register as self-employed or start a company in Israel and take advantage of the many benefits this country has to offer.