Set Up Your Company in Israel
End-to-end incorporation, tax registration, payroll, and ongoing compliance — for foreign companies ready to establish their own legal entity in Israel.
You've Grown Beyond Your EOR. What Comes Next?
Many of our clients start their Israeli journey with an Employer of Record arrangement — a fast, low-risk way to hire local talent without a legal entity. But as teams grow, the economics and strategic logic shift. Having your own Israeli subsidiary gives you full legal standing, a local brand presence, the ability to sign contracts directly, and greater control over your operations.
The challenge is that setting up and running an Israeli company compliantly from abroad requires a local accountant, a commercial lawyer, a bookkeeper, and a payroll officer — all working in coordination. CWS Israel brings all of that together in a single, managed service, delivered in English, by professionals who understand the specific needs of foreign-owned companies.
Everything You Need, Under One Roof
We coordinate the full ecosystem of professionals required to establish and maintain a compliant Israeli entity — so you have a single point of contact, not four separate vendors.
Company Incorporation
We prepare and file all documents with the Israeli Companies Registrar (Rasham HaChevrot), including the Memorandum and Articles of Association, shareholder declarations, and director appointments. You receive your Certificate of Incorporation and company number.
Tax & VAT Registration
We register your company with the Israel Tax Authority (Misrad HaMasim) for income tax withholding (Nikui Mas), VAT (Mas Erech Musaf), and the National Insurance Institute (Bituach Leumi). All filings are handled in Hebrew on your behalf.
Bank Account Setup
Opening a corporate bank account in Israel as a foreign-owned company requires local knowledge and preparation. We guide you through the process with the major Israeli banks, prepare the required documentation, and accompany you through the KYC process.
Bookkeeping & Accounting
Monthly bookkeeping, VAT returns, and management of your Israeli accounting records in compliance with Israeli GAAP. We provide English-language reports and ensure your books are audit-ready at all times.
Payroll Processing
Monthly payroll for your Israeli employees, including income tax withholding, Bituach Leumi contributions, pension fund management, and filing of Form 102 with the Tax Authority. Payslips issued in Hebrew and English.
Commercial Legal Support
Access to a vetted Israeli commercial lawyer for employment contracts, commercial agreements, corporate secretarial work, and periodic compliance reviews. Legal advice delivered in English, with full Hebrew execution.
Annual Financial Statements
Preparation of annual financial statements and corporate tax returns in accordance with Israeli accounting standards. We coordinate with auditors where required and manage the full submission process with the Tax Authority.
EOR-to-Entity Transition
Already using CWS Israel as your Employer of Record? We manage the full transition — migrating employees to your new entity, transferring payroll, updating contracts, and ensuring zero disruption to your team during the changeover.
Ongoing Compliance Management
Regulatory requirements in Israel change frequently. We monitor updates to labour law, tax rates, Bituach Leumi contributions, and reporting obligations, and proactively update your processes to keep you compliant year-round.
Your Path from Decision to Operating Entity
A structured, guided process that takes most companies from initial consultation to a fully operational Israeli entity in 6–10 weeks.
Free Consultation
We assess your structure, team size, and goals to recommend the right entity type and service scope.
Engagement & KYC
We collect shareholder and director information, prepare the incorporation documents, and conduct required KYC checks.
Incorporation
Documents are filed with the Companies Registrar. You receive your Certificate of Incorporation and company number within 3–10 business days.
Tax & Bank Setup
We register with the Tax Authority, VAT authority, and Bituach Leumi, and guide you through the bank account opening process.
Payroll & Contracts
Employee contracts are updated, payroll is configured, and pension fund arrangements are put in place before the first payroll run.
Ongoing Management
Monthly bookkeeping, payroll, VAT filings, and legal support — all managed by your dedicated CWS Israel team.
Which Model Is Right for Your Stage of Growth?
Both models have their place. Here's how to think about the decision.
Not sure which model fits your current stage? Talk to our team — we'll give you an honest assessment.
What Does Running an Israeli Entity Actually Involve?
Israeli compliance is multi-layered. Here is a summary of the key obligations your entity will face — all of which CWS Israel manages on your behalf.
| Obligation | Frequency | Authority | Notes |
|---|---|---|---|
| Payroll withholding tax (Form 102) | Monthly | Israel Tax Authority | Income tax and Bituach Leumi deducted from employee salaries and remitted |
| VAT return (Doch Mas) | Monthly / Bi-monthly | Israel Tax Authority | Frequency depends on annual turnover; most companies file monthly |
| Employer Bituach Leumi | Monthly | National Insurance Institute | Employer contributions: 3.55%–7.60% of salary depending on income bracket |
| Pension fund contributions | Monthly | Pension funds | Mandatory for all employees: employer contributes minimum 6.5% of salary |
| Annual financial statements | Annual | Israel Tax Authority | Prepared by a licensed CPA; audit required for companies above certain thresholds |
| Corporate income tax return | Annual | Israel Tax Authority | Standard rate 23%; due within 5 months of financial year end |
| Annual report to Companies Registrar | Annual | Companies Registrar | Confirmation of directors, shareholders, and registered address |
| Advance tax payments (Mekadmot) | Monthly | Israel Tax Authority | Prepayments of estimated corporate tax liability based on prior year |
We Already Know Your Business
Most entity setup providers start from scratch. CWS Israel is different — if you've been using our EOR service, we already understand your team structure, compensation packages, employment contracts, and compliance history. That institutional knowledge makes the transition to your own entity faster, smoother, and less risky.
And if you're coming to us fresh, you benefit from a team that has guided dozens of foreign companies through the Israeli incorporation process — from US tech firms and European manufacturers to global staffing companies and financial services groups.
- English-first service — all communications, reports, and contracts in English
- Single point of contact for accounting, payroll, and legal
- Experienced with foreign-owned, remotely-managed Israeli subsidiaries
- Transparent, fixed-scope pricing — no surprise invoices
- Backed by PwC Israel for audit and assurance services
- Dedicated account manager throughout setup and beyond
How Much Will It Cost to Set Up and Run Your Israeli Entity?
Answer five questions about your company and receive an itemised, transparent cost estimate covering incorporation, accounting, payroll, and legal services. No registration required.
Ready to establish
your Israeli entity?
This calculator provides a transparent, itemised estimate of the costs involved in setting up and running a private limited company in Israel — covering accounting, bookkeeping, payroll, and legal services.
Answer 5 short questions about your company and we'll generate a personalised estimate in under 2 minutes.
All estimates are indicative and exclude 18% Israeli VAT. Actual costs depend on company activity and scope of services required.
Everything You Need to Know About Setting Up a Company in Israel
The Companies Registrar (Rasham HaChevrot) typically processes a new company registration within 3–10 business days once all documents are submitted. However, the full entity setup process — including tax registration, VAT registration, National Insurance (Bituach Leumi) registration, and bank account opening — generally takes 4–8 weeks in total. CWS Israel manages all of these steps in parallel to minimise the overall timeline.
Yes. Israel permits 100% foreign ownership of Israeli companies. There is no requirement for a local Israeli shareholder or director, although a registered address in Israel is required for incorporation purposes. CWS Israel can provide a registered address service as part of the setup package.
A Chevra Baam (חברה בע"מ) is an Israeli private limited liability company — the equivalent of a UK Ltd or US LLC. It is the most common structure for foreign businesses entering Israel because it provides limited liability protection, a separate legal personality from the parent company, and is straightforward to manage from abroad. For most foreign companies establishing a local presence, a Chevra Baam is the recommended structure. Alternatives include a branch office (Sniph) or a representative office, but these have more limited uses and different tax implications.
The standard corporate income tax rate in Israel is 23% as of 2025. Companies may qualify for reduced rates under the Law for the Encouragement of Capital Investments if they meet certain criteria related to R&D activity or preferred enterprise status — rates can be as low as 7.5% for qualifying technology companies in priority development zones. Dividends distributed from an Israeli company to a foreign parent are subject to a withholding tax of 25–30%, which may be reduced under applicable tax treaties.
Israel's Value Added Tax (VAT) rate is 18% as of January 2025 (increased from 17%). Any company conducting business in Israel is generally required to register for VAT with the Israel Tax Authority. VAT returns are typically filed monthly for larger companies or bi-monthly for smaller ones. Exports of goods and certain services to foreign clients may be zero-rated, which can be advantageous for tech and service companies whose primary customers are outside Israel.
Israeli employers must withhold income tax and National Insurance (Bituach Leumi) contributions from employee salaries and remit them monthly to the relevant authorities using Form 102. Employers must also make their own Bituach Leumi contributions (3.55%–7.60% of salary depending on the income bracket) and contribute a minimum of 6.5% of each employee's salary to a mandatory pension fund. Additionally, employers must comply with Israeli labour law regarding vacation pay, sick leave, severance pay (Pitzuim), advance notice periods, and annual recreation pay (Dmei Havraah).
No. Israeli law does not require a local director or shareholder. The company can be 100% owned and directed by foreign nationals. However, a registered address in Israel is required, and having a local accountant and legal representative is strongly recommended — and in practice essential — for ongoing compliance with Israeli tax and corporate law. CWS Israel provides both.
Yes — this is one of CWS Israel's core specialisations. Having managed your employees as an Employer of Record, we already understand your team structure, compensation packages, and compliance history. We can manage the full transition: incorporating the new entity, migrating employees, updating employment contracts, setting up payroll and accounting systems, and providing ongoing admin and finance support — with zero disruption to your team during the changeover.
A subsidiary (Chevra Baam) is a new Israeli legal entity that is separate from the foreign parent. The parent's liability is limited to its investment in the subsidiary. A branch (Sniph) is a registered extension of the foreign parent company — it is not a separate legal entity, meaning the parent company bears full liability for the branch's activities. For most foreign companies, a subsidiary is preferred because it provides liability protection and a cleaner corporate structure. Branches are sometimes used by companies that want to avoid the complexity of a separate entity but still need a formal Israeli registration.
The key documents required for incorporation include: a completed application form (Form 1) to the Companies Registrar; a Memorandum of Association (Takanonim) defining the company's purpose and structure; a declaration by the first director(s); identification documents for all shareholders and directors (passport copies, certified where required); and proof of a registered address in Israel. For foreign corporate shareholders, apostilled corporate documents from the parent company's jurisdiction are typically required. CWS Israel prepares and coordinates all of these documents on your behalf.
The cost of setting up an Israeli company depends on your shareholder structure, the number of employees, and the scope of legal and accounting work required. Government registration fees are relatively modest. The main costs are professional fees for the accountant and lawyer who handle the registration, tax filings, and employment contracts. Use the cost estimator on this page to get a personalised, itemised estimate based on your specific situation.
Trusted by Global Companies Entering Israel
"We used CWS Israel as our EOR for two years before deciding to establish our own entity. The transition was seamless — they already knew our team, our contracts, and our compliance history. What could have been a complex, months-long project was completed in under six weeks. We now have a fully operational Israeli subsidiary with payroll, accounting, and legal support all managed by the same team."
— Head of Global Operations, US-based Technology Company
Let's Build Your Israeli Entity Together
Book a free, no-obligation consultation with our team. We'll assess your situation, answer your questions, and give you a clear picture of the timeline, costs, and next steps.
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