and operation of a fiscal representative office; should be registered by a
representative is responsible for the management of the company’s legal and
financial affairs in Israel; including all tax-related issues.
There are several
major advantages to a fiscal representative office registration over the establishment
of an Israeli company.
company’s business and tax-related activities are managed in resemblance to the way Israeli
companies are been managed.
Israeli daughter company decides to shut down its business activity, the
process might be long and challenging. On the other hand, the procedure of
shutting down a business activity of a fiscal representative office is an
expeditious procedure, which requires only to finalize and to report tax
and PR (Public relationships) might be the reason for some business entities to
give up and not to establish a company in Israel from the first place.
Registration of a branch or an office in Israel, by
its legal term, is under the supervision of the head office of the company
is why, a fiscal representative office in Israel might be the ultimate solution
for these kinds of business entities to conduct their business activity in Israel;
without the risk of potential damage to the parent company’s relations with other countries
that do not have trade relations or have no official statement about their
position in relation to Israel.
Note The professional and operational aspects of the organization’s
activity in Israel, usually are not handled by the representative office.
In most cases, when registering an office with a fiscal representative in Israel, there will be no additional tax on dividends after paying income tax on profits made in Israel.
business entity registers as an office with a fiscal representative,
withdrawing distributed profits obtained from Israeli business activities isn’t
considered a dividend. However, each situation requires a specific examination
of the relevant double taxation treaties between the residence country, where
the head office located and Israel.
signed treaties of double taxation with more than 55 countries.
representative office in Israel entails personal liability for all of the
Israeli branch tax debts for the foreign company.
result, it is customary to provide guarantees and deposits to the trust account
of the representative office for the duration of the business activity in
Israel. Furthermore, there is a legal business liability cover for the company
activities in Israel.
recommend that you examine and understand all the relevant aspects before
making a decision about the type of business entity you want to establish in
with local experts, who will provide you with the needed local insights and
information. Following that, you will be able to consider the advantages,
disadvantages and to review all the relevant threats and opportunities to make
the best decision for your business.
If the professional
recommendation will support the decision to define business activity as a
“fixed presence” in Israel, then a fiscal representative office needs to be
open before commencing the activity.
process of opening and registering such an office can take a few days and up to
more than a month, depending on several factors.
result, our advice is to make the necessary arrangements in advance, ”the sooner
Feel free to contact our experts to get a professional consultation.
For more information about Fiscal Representation services in Israel:
FISCAL REPRESENTATION IN ISRAEL
THE ALTERNATIVES WHEN STARTING A BUSINESS IN ISRAEL