Corporate law in Israel governs company formation, shareholder relationships, and commercial transactions under the Companies Law 5759-1999. It covers incorporating an Israeli company, registering a foreign branch under Section 346, founders and shareholders agreements, Section 102 employee equity, and mergers and acquisitions.
Incorporating a company is a single event. Running one is not. This page covers the legal work that continues after the company number is issued - the agreements between shareholders, the contracts the company signs, the employee equity it grants, and the disputes and transactions that follow. For the incorporation itself, see establishing and registering a company in Israel.
Most corporate problems in Israel are created at the start and discovered years later. Articles of Association that never anticipated a second share class, an equity split with no vesting, an option plan granted outside the Section 102 trustee route. Each is cheap to structure correctly on day one and expensive to unwind at exit. These are the four areas where that choice is made.
Founders and investors worldwide: United States · United Kingdom · Canada · France · Australia · Germany · Switzerland · South Africa · Belgium · and across the diaspora.
Eliyahu & Co. Law Office is a boutique Israeli law firm with deep expertise in corporate and business law at every scale - from a single founder incorporating a first Israeli company through to complex multi-jurisdictional structures involving foreign parents, Israeli subsidiaries, employee equity plans under Section 102, and exits to international acquirers. Since 2007, Adv. Eliyahu has handled company formations, shareholders agreements, commercial contracts, M&A transactions, and cross-border corporate matters where Israeli law intersects with the law of the United States, the United Kingdom, France, Canada, Australia, and beyond.
Our specialization covers every dimension of Israeli corporate law: company formation and registration at the Registrar of Companies, foreign company branch registration under Section 346 of the Companies Law, drafting and negotiation of founders agreements and shareholders agreements (including drag-along, tag-along, ROFR, and anti-dilution mechanisms), commercial contracts across supplier, customer, distribution, licensing, and employment relationships, Section 102 employee stock option plans coordinated with the Israel Tax Authority and approved trustees, ongoing corporate counsel and corporate governance, and representation in M&A transactions and shareholder disputes. The work operates under the framework of the Companies Law (5759-1999), alongside the Contracts Law, the Securities Law (where relevant), and the Israeli Tax Ordinance.
The firm is led by Adv. Reut Eliyahu, founding attorney and licensed Israeli notary, who holds an LL.B and an MBA with Marketing Specialization, has been a member of the Israel Bar Association since 2007 (License No. 47439), and is also a registered arbitrator. The combination of legal training, formal notarial authority, business administration credentials, and direct practice in cross-border Israeli matters since 2007 allows the firm to handle every dimension of a corporate matter in-house: legal strategy, document preparation, notarization of overseas Powers of Attorney, court filings, tax coordination with the Israel Tax Authority on Section 102 plans, and final registration. The MBA training is consistently relevant in corporate work - particularly when structuring shareholders agreements, valuing private companies in transactions, and advising founders on the business consequences of legal alternatives.
Israeli corporate matters arise from many different business situations - some routine, some highly complex. Each scenario requires its own legal approach. Below are the most common patterns we handle for both Israeli companies and overseas founders.
Founders incorporating a first Israeli company - including pre-incorporation founders agreements, IP assignment, equity vesting, and the initial Section 102 employee equity plan for the founding team. Whether single founder or multi-founder, Israeli resident or overseas.
Founders and investors in the United States, United Kingdom, France, Canada, Australia, and elsewhere who want to incorporate an Israeli company or invest in an existing one - and need an English-speaking Israeli lawyer to manage the entire process from abroad, without traveling to Israel.
Israeli companies needing ongoing corporate counsel - routine board resolutions, annual returns, contract reviews, employee equity grants, regulatory compliance, and day-to-day legal questions. A practical alternative to maintaining a full-time legal department.
Foreign companies establishing an Israeli presence - either as a branch (registered foreign company under Section 346 of the Companies Law) or as an Israeli subsidiary (wholly-owned Israeli Ltd.). Each structure has different tax, liability, and compliance implications.
Buyers, sellers, and individual shareholders in M&A transactions - share purchases, asset sales, and exits to international acquirers. Includes due diligence, term sheet negotiation, definitive agreements, regulatory approvals, and closing mechanics.
Shareholders, founders, and directors involved in contested matters - oppression claims by minority shareholders, breach of shareholders agreement, breach of director fiduciary duty, deadlock in 50/50 companies, and board-level disputes.
The legal framework governing Israeli corporate and business law is well-established. These are the core statutory references and practical numbers every founder, shareholder, and business operator should know.
Corporate income tax - Standard Israeli corporate income tax rate (2026) on company profits before distribution.
Company incorporation - Typical timeline at the Registrar of Companies from filing to issuance of company number.
Section 102 capital gains - Preferential tax rate on qualifying employee stock options through approved trustee route.
Companies Law (5759-1999) - Foreign company branch registration in Israel, alternative to incorporating a subsidiary.
Where foreign-owned accounts usually open - In our experience, most foreign-owned companies we form open their Israeli account at the second bank they apply to, not the first.
Private M&A timeline - Term sheet to closing for a typical private transaction, depending on due diligence scope.
Free initial consultation - by email, phone, or Zoom - to assess the matter, identify the right structure, and plan the next steps. No obligation.
We handle the full range of corporate and business matters in Israel - from company formation and ongoing corporate counsel through to complex shareholder disputes, M&A transactions, and exit events. See also our complete Areas of Practice.
Incorporating an Israeli private company (Ltd.) at the Registrar of Companies - drafting Articles of Association, appointing directors, allocating founders' shares, and registering for Tax Authority and VAT. Foreign founders served remotely via Power of Attorney.
How company registration works →Registering a foreign company as a branch (under Section 346 of the Companies Law) or as an Israeli subsidiary. We advise on the right structure - branch, subsidiary, or representative office - and handle the full registration process.
Read more →Drafting and negotiating founders agreements (pre-incorporation) and shareholders agreements (post-incorporation) - covering equity splits, vesting, IP assignment, voting rights, drag-along and tag-along rights, ROFR, anti-dilution, and exit mechanisms.
Drafting and reviewing the full range of business contracts: supplier and customer agreements, distribution and reseller agreements, services and consulting agreements, licensing and IP agreements, NDAs, employment and contractor agreements.
Commercial contracts drafting and review →Acting as outside general counsel for Israeli companies - corporate governance, board procedures, regulatory compliance, share allotments and option grants, Section 102 employee equity, annual returns, and day-to-day legal questions.
Ongoing counsel for companies →Representing Israeli companies, foreign acquirers, and individual shareholders in mergers, share purchases, asset sales, and exit events. Includes due diligence, term sheets, definitive agreements, regulatory approvals, and closing.
Israeli employee stock option plans (ESOPs) and restricted stock units (RSUs) under Section 102 of the Income Tax Ordinance - drafting the plan, coordinating Tax Authority approval, and ongoing grant administration with the approved trustee.
Specialized representation for foreign shareholders selling Israeli public company shares - including coordination with Israeli trustees (Reznik Paz Nevo, I.B.I Trust Management, bank nominee companies and others) and cases without an active Israeli bank account.
Selling shares from abroad →Representation in contested corporate matters - minority oppression claims, breach of shareholders agreement, deadlock between 50/50 shareholders, breach of director fiduciary duty, and valuation disputes on share transfers.
A foreign company entering Israel chooses between two structures, and the choice is difficult to reverse later. The first is registering the foreign company itself as a branch - a registered foreign company under Section 346 of the Companies Law (5759-1999). The entity remains the same legal person; it simply becomes registered and taxable in Israel, with a local representative authorized to accept service of process. The second is incorporating an Israeli subsidiary - a new Israeli private company (Ltd.), owned wholly or partly by the foreign parent, with its own legal personality and its own liability.
The practical difference that matters most to founders is liability. A branch exposes the foreign parent directly to Israeli claims; a subsidiary does not, absent a piercing argument. The second difference is tax: a branch is taxed on its Israeli-source profits, while a subsidiary is an Israeli resident taxed on worldwide income, with withholding on dividends to the parent. The third is banking - Israeli banks are generally more comfortable opening an account for an incorporated Israeli company than for a branch of an unfamiliar foreign entity, and in practice this alone decides many cases.
A branch is usually right for a short, defined Israeli project, or where the parent needs the Israeli activity to sit on its own balance sheet. A subsidiary is usually right where the Israeli operation will employ people, raise capital, grant employee equity under Section 102, or eventually be sold separately. A subsidiary can be sold; a branch cannot.
In our experience, foreign companies that planned to hire in Israel almost always ended up with a subsidiary - and usually because of the bank account, not the tax analysis.
| Branch (Section 346) | Israeli Subsidiary (Ltd.) | |
|---|---|---|
| Legal personality | Same entity as the foreign parent | Separate Israeli legal person |
| Parent liability | Direct exposure to Israeli claims | Limited to share capital |
| Tax base | Israeli-source profits | Israeli resident, worldwide income |
| Dividend withholding | Not applicable | Applies on distribution to parent |
| Bank account | Harder - unfamiliar foreign entity | Easier - standard Israeli company |
| Section 102 equity | Not available | Available |
| Can be sold separately | No | Yes |
| Typical use | Defined project, limited duration | Hiring, fundraising, long-term operation |
The two main contractual instruments between business partners serve different stages of a company's life. The right choice depends on whether the company is formally incorporated yet - and the topics covered by each follow distinct logic.
| Founders Agreement | Shareholders Agreement | |
|---|---|---|
| When signed | Before the company is incorporated | After incorporation, when shares are issued |
| Who signs | The founders (as individuals) | All shareholders or specific shareholder groups |
| Key topics | Equity splits, vesting, IP assignment, roles | Voting rights, transfers, drag/tag-along, exit |
| Governing framework | Contracts Law + general principles | Companies Law (5759-1999) + Articles of Association |
| Replaced by | Usually superseded by shareholders agreement | Remains in force until a new agreement is signed |
| If a founder leaves | Vesting and IP-assignment clauses apply | Transfer restrictions and ROFR apply |
| Dispute resolution | Often arbitration under the Arbitration Law 5728-1968 | Arbitration or District Court (Economic Department) |
Every Israeli company formation follows a clear, sequenced process. From the initial structuring decision through to the company's first commercial operations - these are the six stages of a typical Israeli company formation, especially as handled for foreign founders who never set foot in Israel.
Free consultation by email, phone, or Zoom. We discuss the business plan, the founders, the funding model, and the expected ownership structure. Key decisions on this call: Israeli company vs. branch of a foreign company, share classes, founder vesting schedule, and tax structure. For overseas founders, the call is by video conference in English.
Within a day of the strategy call we send the application to the Registrar together with the declarations of the first shareholders and the first directors. Israeli citizens can approve them online. For anyone else, the signatures are authenticated by a lawyer and the documents are scanned and sent back to us. We check every document before it is signed, because a name spelled differently in two documents is the most common reason for a query from the Registrar. No one needs to travel to Israel.
We draft the Articles of Association (the company's constitutional document) tailored to the planned operation - share classes, board structure, transfer restrictions, dividend policy. The incorporation file is then submitted to the Registrar of Companies, together with founder declarations and the registration fee. Typical timeline: 1-3 business days to issuance of the company number.
Once the company is incorporated, we register it with the Israel Tax Authority, with VAT (if applicable based on activity), and with the National Insurance Institute as an employer. For companies eligible for the Preferred Technology Enterprise regime, we coordinate the application with the Innovation Authority and Tax Authority for the reduced 12% corporate tax rate.
Opening an Israeli bank account for a foreign-owned company has become significantly more complex due to anti-money laundering rules. In our experience, most foreign-owned companies we form open their account at the second bank they apply to, not the first. We advise on which banks accept foreign-owned companies, prepare the documentation, and where banking presents difficulties, we recommend fintech alternatives (Israeli payment service providers and EMIs) that serve early-stage operating needs.
With the company operational, we draft the founders or shareholders agreement, the first board resolutions (officers, signatory rights, banking authorization), and the initial corporate housekeeping. From here, ongoing corporate counsel takes over - or we hand back to the founders' team if they prefer to manage operations internally with periodic legal support.
We represent founders, shareholders, and investors living anywhere in the world in Israeli corporate matters - by Zoom, email, and notarized Power of Attorney with Apostille. Services in English, Hebrew, and Spanish. No travel to Israel required.
The Israeli corporate process is largely the same regardless of where the client resides - what changes is the procedure for executing the Power of Attorney and the apostille requirements in each jurisdiction. Click on your country below to see how we work with founders and investors in your jurisdiction.
New York · San Francisco · Los Angeles · Miami · Boston · Chicago · Washington DC · Austin · Seattle
We handle Israeli company matters for clients across the United States - from New York and California through Florida, Texas, and beyond. Common scenarios include US citizens forming an Israeli subsidiary of a US parent (often as a Delaware-Israeli structure), American founders incorporating directly in Israel, US investors taking shares in Israeli private or public companies, and US-based tech companies opening an Israeli R&D office.
The Israeli process is handled entirely through Power of Attorney, with documents executed before a US notary and apostilled by the relevant State Secretary. Coordination with US tax counsel is straightforward - we are accustomed to working alongside American attorneys on Section 102 employee equity plans, Section 351 transactions, and outbound US tax considerations. Our US direct line (+1-310-735-4210) provides convenient access during US business hours.
London · Manchester · Birmingham · Leeds · Edinburgh · Glasgow · Cardiff · Belfast
British founders and investors often face questions about how an Israeli company interacts with the UK tax and corporate landscape - particularly around HMRC reporting on UK-resident shareholders of foreign companies, the application of UK's controlled foreign company rules, and the interaction between Israeli and UK contract law in commercial agreements. We advise on Israeli company structures for UK-resident founders, draft shareholders agreements that work alongside UK shareholder protections, and handle the full Israeli process for UK clients.
Power of Attorney documents are prepared in English, executed before a UK notary public, then apostilled by the FCDO (Foreign, Commonwealth & Development Office) for use in Israel. No travel to Israel is required. Where the structure involves a UK parent acquiring an Israeli subsidiary, we coordinate with UK counsel on the cross-border aspects.
Toronto · Montreal · Vancouver · Calgary · Ottawa · Edmonton · Winnipeg · Quebec City
Canadian founders and investors frequently encounter Israeli corporate matters - whether forming an Israeli operating company under a Canadian parent, investing in Israeli startups, or holding Israeli company shares as a Canadian resident. We handle the entire Israeli process remotely from Toronto, Montreal, Vancouver, and elsewhere across Canada. The legal proceedings - incorporation, shareholders agreements, ongoing corporate counsel, and M&A representation - are all managed by our firm on the client's behalf.
Power of Attorney documents are executed before a Canadian notary or lawyer and apostilled or authenticated under the appropriate Canadian procedures (the rules differ by province - Quebec under civil law, Ontario and BC under common law). Where the structure involves Canadian tax planning around the Israeli operation, we coordinate with Canadian counsel and file the Israeli proceedings independently.
Paris · Marseille · Lyon · Nice · Toulouse · Bordeaux · Strasbourg · Lille
The Franco-Israeli business connection runs deep - many French entrepreneurs, family offices, and investors operate Israeli companies, particularly in technology, real estate development, and import-export. We represent French clients in Israeli company formations, shareholders agreements, and M&A matters - routinely coordinating with French avocats and notaires on cross-border structures.
Our firm advises on Israeli holding structures that interact with the French civil law system, drafts shareholders agreements that work in both jurisdictions (carefully navigating the French Civil Code where relevant), and manages corporate filings at the Israeli Registrar of Companies.
Sydney · Melbourne · Brisbane · Perth · Adelaide · Canberra · Gold Coast
Australian founders and investors operating Israeli companies benefit from a straightforward apostille process under the Apostille Convention. We handle the full Israeli proceedings for clients in Sydney, Melbourne, Perth, Brisbane, and across Australia - including coordination with Australian corporate counsel where the deal involves a dual-jurisdiction structure.
Time-zone differences (8-10 hours ahead of Israel) are managed through email and asynchronous communication, ensuring smooth progress without requiring late-night phone calls. The Israeli incorporation process typically takes 1-3 business days, and Power of Attorney documents are executed before an Australian notary public and apostilled by DFAT.
São Paulo · Rio de Janeiro · Brasília · Salvador · Belo Horizonte
Brazilian founders and investors with Israeli business interests - whether incorporating an Israeli company, investing in an Israeli startup, or operating an Israeli subsidiary of a Brazilian parent. The Brazilian-Israeli business community has a long history, particularly in technology, agriculture, and trade. We handle Israeli incorporations, shareholders agreements, and corporate counsel for Brazilian clients remotely.
Services available in Hebrew and Spanish (and English). Power of Attorney is executed before a Brazilian notary (tabelião) and apostilled - Brazil is a signatory to the Apostille Convention since 2016, which streamlines the process considerably.
Buenos Aires · Córdoba · Rosario · Mendoza
Argentine founders and Israelis in Argentina with Israeli business interests. Remote proceedings managed end-to-end - company formations, shareholders agreements, commercial contracts, corporate counsel, and M&A representation. The Jewish community in Argentina is one of the largest in the diaspora, and Israeli business matters arise frequently across the generations.
Services in Hebrew and Spanish provide direct communication without language barriers. Argentina is part of the Apostille Convention, so Powers of Attorney executed before an Argentine notary are recognized in Israel through standard apostille procedures.
Moscow · Saint Petersburg · Kyiv · Odesa · Kharkiv
Russian-speaking founders and investors with Israeli business interests. Remote proceedings - Israeli company formations, branch registrations, commercial contracts, shareholders agreements, and corporate counsel. The Russian-speaking community is one of the largest immigrant groups in Israel, and cross-border business between Russia/Ukraine and Israel is common - particularly in technology, trade, and real estate development.
Document execution and authentication procedures differ depending on the current diplomatic situation - we provide tailored guidance on the appropriate notarization and authentication route at the start of each engagement, ensuring documents are properly executed the first time.
Lisbon · Porto · Coimbra · Faro
Portuguese residents and Israelis in Portugal with Israeli business interests. Remote handling of Israeli company formations, shareholders agreements, commercial contracts, corporate counsel, and cross-border business structures. Portugal has become a popular destination for Israelis seeking EU residency, particularly through Sephardic citizenship programs, creating a growing community with cross-jurisdictional business needs.
Services in English, Hebrew and Spanish. Portugal is a longstanding signatory to the Apostille Convention, which simplifies document authentication considerably.
South Africa · Germany · Switzerland · Belgium · Netherlands · Spain · Italy · Mexico · Uruguay · Moldova
We have represented founders, shareholders, and investors from across the diaspora - South Africa, Germany, Switzerland, Belgium, Netherlands, Spain, Italy, Mexico, Uruguay, Moldova, and many other countries. The Israeli corporate process is largely the same regardless of where the client resides - what changes is the procedure for executing the Power of Attorney and the apostille requirements in each jurisdiction.
With cross-border practice since 2007, we are familiar with the documentation requirements for every major jurisdiction. Contact us with the country of residence and we will assess the documentation requirements together, provide country-specific instructions for the Power of Attorney, and outline a realistic timeline for the full process.
Company formation, shareholders agreements, commercial contracts, M&A, Section 102 employee equity, corporate counsel - one conversation can clarify everything. Free first consultation, no obligation.
Sun-Thu 08:00-19:00 · Fri 08:00-13:00 (Israel Time) · In office, by Zoom, or remotely worldwideCorporate matters are about long-term business relationships - between founders, between shareholders, and between a company and its market. Our approach combines legal precision with clear, plain-English communication - giving clients the clarity they need to make business decisions with confidence.
Adv. Reut Eliyahu handles each corporate matter personally - from first consultation through final closing. No transfers to junior staff. Clients always know who is handling their matter and how to reach them.
Adv. Eliyahu is a licensed Israeli notary. Notarial documentation can be issued in-house - saving time and coordination on cross-border documents that require notarial certification or translation.
We regularly represent overseas founders and investors in Israeli corporate proceedings - in English, with full remote capability. Clients in the US, UK, France, Canada, Australia, and across the diaspora build Israeli operations without traveling to Israel.
The MBA training is consistently relevant in corporate work - particularly when structuring shareholders agreements, valuing private companies, and advising founders on the business consequences of legal alternatives.
Corporate and business law are core practice areas for our firm - not peripheral services. Each engagement draws on direct prior experience with similar matters, with deep familiarity in the Registrar of Companies, Tax Authority, and Israeli court practice.
Direct WhatsApp, email, and phone access. No call-center buffers. Overseas founders coordinating across time zones value this directly - questions get answered in hours, not days.
Fees depend on the matter - company formation, contract drafting, ongoing counsel, or M&A all use different fee structures. We provide a clear written fee quote after the initial free consultation, before any work begins. No surprises.
Beyond legal fees, a founder should budget for the statutory costs that are paid to the authorities rather than to the lawyer. Company incorporation carries a registration fee to the Registrar of Companies, and every Israeli company then pays an annual fee to the Registrar - reduced significantly if paid in the first quarter of the calendar year. Unpaid annual fees accumulate and are eventually transferred for collection, which is one of the most common reasons a dormant company becomes expensive to close years later. Notarial certification and apostille for an overseas Power of Attorney are separate, and are charged according to the notary fee schedule set by regulation.
The most expensive corporate document we redraft is an Articles of Association written for a single founder that now has to accommodate an investor. The practical guidance we give founders is this: the cheapest moment to get a corporate structure right is before incorporation. Redrafting Articles of Association, unwinding an equity split, or retrofitting a Section 102 plan after options have already been granted costs several times what it would have cost to structure correctly at the start.
Fixed fee for routine Israeli company incorporations. Includes Articles of Association, filings with the Registrar of Companies, and Tax Authority registration.
Fixed or capped fee for standard arrangements. Complex multi-party or cross-border agreements are quoted per matter based on scope.
Ongoing counsel for active companies. The scope and the fee are agreed in writing in advance, based on what the company needs.
Quoted per transaction. M&A, share sales, and complex deals are quoted individually based on scope, due diligence, and complexity.
Founding Attorney & Notary · Eliyahu & Co. Law Office
Adv. Reut Eliyahu founded Eliyahu & Co. as a firm specializing in corporate and business law at every scale - from a single founder incorporating a first Israeli company through to complex multi-jurisdictional structures involving foreign parents, Israeli subsidiaries, employee equity plans under Section 102, and exits to international acquirers. A member of the Israel Bar Association since 2007 (License No. 47439), she holds LL.B and MBA degrees and is a registered notary and arbitrator.
The firm's corporate practice covers every aspect of Israeli business law: company formation and registration at the Registrar of Companies, foreign company branch registration under Section 346 of the Companies Law, founders and shareholders agreements, commercial contracts, ongoing corporate counsel, Section 102 employee equity plans coordinated with the Israel Tax Authority, M&A and share transactions, and shareholder disputes. The firm works under the framework of the Companies Law (5759-1999), alongside the Contracts Law, the Securities Law (where relevant), and the Israeli Tax Ordinance.
Reut handles corporate matters personally - from initial structuring through to closing or completion. Clients never find themselves explaining their company structure repeatedly to different staff members. This continuity is particularly valued by overseas founders, who cannot visit the office and depend on a single, reliable point of contact who knows the business in detail.
Beyond corporate work, the firm's full practice covers Israeli real estate law, inheritance and estate matters, sale of Israeli shares for foreign shareholders, foreign legal opinions on Israeli law, and notarial and apostille services. The firm is based in Herzliya Pituach and serves clients across Israel and internationally.
📍 The first consultation is free and without obligation.
Answers to the most common questions we receive from Israeli companies, foreign founders, and international investors about business and corporate law in Israel.
Tell us briefly about the Israeli corporate or business matter - whether you are forming a new company, drafting a shareholders agreement, planning an M&A transaction, or facing a shareholder dispute. We will get back to you within one business day. The first consultation is free and without obligation.
You can also read more about company formation in Israel, foreign company registration, selling Israeli stocks from abroad, commercial contracts, and ongoing corporate counsel.
4 HaOgen Street, Herzliya Pituach, Israel
Sun - Thu: 08:00 - 19:00
Fri: 08:00 - 13:00
(Israel Time)
English · Hebrew
Shareholders agreements, commercial contracts, Section 102 employee equity, M&A and corporate disputes - one conversation can clarify everything. Free first consultation, no obligation.
Sun-Thu 08:00-19:00 · Fri 08:00-13:00 · In office, by Zoom, or remotely worldwide