Quick Answer: A rihuy asak (רישיון עסק — business license) is required by the Business Licensing Law 5728-1968 for any business in a category listed in the Law's schedules. These include restaurants and food businesses, hotels, childcare facilities, pharmacies, fuel stations, entertainment venues, construction yards, waste-handling operations, and dozens of other types. Office-based businesses that are not listed — consultancies, software companies, professional services firms — do not need a rihuy asak. The license is issued by the municipality where the premises are located and must be renewed periodically (typically every one to ten years depending on the business type). Operating a listed business without a license is a criminal offence under Section 14 of the Law.

One of the first questions a foreign entrepreneur or investor asks when setting up a physical business in Israel is whether they need a formal operating license from the authorities — not just a company registration with the Registrar of Companies (Rasham HaChevrot), but a separate license to conduct business from specific premises. The answer depends entirely on the type of activity.

Israel's Business Licensing Law 5728-1968 (*Hok Rihuy Asarim*) creates a mandatory licensing regime for a defined set of business categories. For businesses that fall within those categories, the license is not optional: without it, you are operating illegally, and the local municipality has the authority to seek a court order closing your premises within 24 hours. For businesses outside the listed categories, there is no requirement — though other permits (building, signage, fire safety) may still apply.

1. What Is a Rihuy Asak — and Why Does It Exist?

A *rihuy asak* (רישיון עסק, literally "business license") is a permit granted to a specific business owner for specific premises to carry out a specific type of regulated activity. It is not a general commercial registration — that is handled separately through the Registrar of Companies or Rasham Ortaot (partnerships/sole traders). The rihuy asak is an operating license that confirms the business premises and activities meet health, safety, environmental, and zoning requirements set by multiple government bodies.

The licensing regime exists because the regulated activities create genuine risks to public health, safety, the environment, or public order. A restaurant that mishandles food can cause mass illness. A fuel station that is poorly constructed can explode. A childcare centre that is overcrowded or understaffed can endanger children. The rihuy asak system gives relevant government authorities a mechanism to inspect premises and enforce minimum standards before a business opens — and to withdraw the license if standards slip.

The license is tied to the premises and the owner. It does not transfer automatically to a new owner when a business is sold, and it does not follow the business if it moves to new premises. Foreign companies and entrepreneurs need to understand this from the outset: plan the licensing process as part of your site setup timeline, not as an afterthought.

2. Which Businesses Need a Business License in Israel?

The Business Licensing Law 5728-1968 delegates the task of listing which businesses require a license to subordinate regulations — primarily the Business Licensing Regulations (Licensed Businesses) 5773-2013 and their schedules. The current schedules categorise licensed businesses across several broad groups:

Food and Hospitality

  • Restaurants, cafes, and eateries — any premises that prepare and serve food to the public require a rihuy asak from the municipality and a separate food business approval from the Ministry of Health (Misrad HaBriut)
  • Hotels and guesthouses — all accommodation businesses require a license; hotels with more than a defined number of rooms also require classification under the Ministry of Tourism (Misrad HaTayyarut)
  • Food manufacturing and packing facilities — industrial kitchens, food factories, and catering commissaries all require licensing
  • Convenience stores and supermarkets — any retail establishment selling fresh food, meat, or dairy products that requires cold-chain storage is a licensed business

Health and Welfare

  • Pharmacies (Batei Merkachat) — licensed under both the Business Licensing Law and the Pharmacists Ordinance 5741-1981, with approval required from both the municipality and the Ministry of Health Pharmacy Division
  • Childcare facilities (*maonot* and *batei yeled*) — require coordinated approvals from the municipality and the Ministry of Labour's Childcare Inspectorate
  • Medical clinics and dental practices — in most cases require a license if operating from dedicated clinical premises
  • Veterinary clinics — require a rihuy asak with coordination from the Veterinary Services at the Ministry of Agriculture and Rural Development (Misrad HaChaklaut)

Fuel, Chemicals, and Industrial

  • Fuel stations (Tahanat Deleq) — require approval from the municipality, the Ministry of Environmental Protection (Misrad HaGana Al HaSviva), the Israel Fire and Rescue Services (Sherut Kibui VeHatzala), and the Ministry of Energy and Infrastructure
  • Auto repair garages and vehicle workshops — require a rihuy asak with fire safety inspection
  • Chemical storage and handling facilities — hazardous materials businesses face the most complex multi-authority review process
  • Waste treatment and recycling operations

Entertainment and Public Gatherings

  • Bars and nightclubs — require municipal licensing plus approval from the Israel Police (Mishterit Yisrael) under Section 17 of the Business Licensing Law
  • Cinemas and theatres
  • Gyms and fitness centres
  • Event halls and wedding venues

Other Common Categories

  • Laundry and dry-cleaning businesses
  • Printing and publishing facilities
  • Construction materials yards and stone-cutting operations
  • Scrapyards and metal dealers

What does NOT require a rihuy asak: Most office-based activities — software companies, law firms, accounting practices, consultancies, import/export trading companies, and professional services — do not appear in the schedules and are not licensed businesses under the Business Licensing Law. They still need to register the company or sole proprietor with the Registrar of Companies or Tax Authority, comply with zoning regulations governing office use, and in some cases obtain a certificate of occupancy (*teudat Ishurey Binyan*) for the premises — but they do not need a rihuy asak.

In Practice: A foreign entrepreneur opening a tech startup office in Tel Aviv does not need a rihuy asak — but a foreign investor opening a restaurant in Tel Aviv absolutely does, and they need to begin the licensing process before fitting out the premises. The municipality will inspect the actual space at the application stage. If you build out a kitchen to the wrong standard, you will be required to rebuild it at your cost before the license is issued. Engaging a licensed Israeli contractor and architect familiar with Ministry of Health kitchen standards from day one saves significantly more than it costs.

3. The Licensing Authorities: Who Must Approve Your Application

A rihuy asak is issued by the municipality (Iriya) or local authority where the business premises are located — but the municipality does not act alone. Depending on the business category, the municipality must consult with and receive non-objection confirmations from up to five separate government bodies before issuing the license. This is what makes the process complex and, historically, slow.

The bodies most commonly involved are:

  • Municipality (Iriya / Moatza Mekomit) — the primary licensing authority. The municipal licensing department (*Machlakat Rihuy Asarim*) receives the application, coordinates with other bodies, conducts municipal inspections (fire exit compliance, signage, zoning conformity), and ultimately issues the license.
  • Ministry of Health (Misrad HaBriut) — required for any food business, medical facility, childcare, or water-related activity. The district office of the Ministry of Health inspects food preparation areas, water supplies, and sanitation and issues a written condition report (*takdin*) that the municipality must incorporate into the license.
  • Ministry of Environmental Protection (Misrad HaGana Al HaSviva) — involved for businesses with noise, air, or water pollution potential: fuel stations, garages, industrial plants, and waste operations. Its approval is known as a *hamlatzat sviva*.
  • Israel Fire and Rescue Services (Sherut Kibui VeHatzala) — required for businesses in which a fire or explosion would pose public risk: fuel stations, warehouses, nightclubs, hotels, and large restaurants. Inspectors assess fire suppression systems, evacuation routes, and hazardous material storage. In municipalities where the fire service is administered by the municipality itself (e.g., Tel Aviv), this step is conducted internally.
  • Israel Police (Mishterit Yisrael) — involved specifically for businesses that could affect public order: bars, nightclubs, and event venues. Under Section 17 of the Business Licensing Law, the Police can object to or condition a license on security grounds.
In Practice: In a Tel Aviv restaurant licensing application, the typical authority sequence is: (1) Municipality planning/zoning sign-off on permitted use of the premises; (2) Ministry of Health District Office inspection of the kitchen layout, ventilation, and cold-chain equipment; (3) Israel Fire and Rescue Service inspection of fire suppression and emergency exits; and (4) Municipal licensing committee review. Delays at any one body delay the entire license. The 2018 Reform introduced mandatory response deadlines for each body — 45 working days from submission of a complete application — but in practice, the Ministry of Health, which is chronically understaffed in its licensing function, is most often the bottleneck. Budget accordingly.

4. How to Apply for a Business License in Israel

The Business Licensing Law Amendment 34 (5778-2018) restructured the process to create a single-window entry point and mandatory timelines. The practical steps:

Step 1: Pre-Application Zoning Check

Before submitting a formal application, confirm that the intended premises are in a zone that permits your type of business. A restaurant, for example, can typically operate only in areas zoned for commercial use — operating from a residentially zoned building requires a variance (*setyia*) that is rarely granted. The municipal planning department (*Machlakat Tikhnun*) can provide a zoning certificate (*teudat zekhuyot binyan*) confirming permitted uses. This step costs approximately NIS 250–600 depending on the municipality and takes one to three weeks.

Step 2: Submit the Application Through the Municipal Licensing Department

Applications for a new rihuy asak are submitted to the municipal licensing department — in most large cities, now available online through the municipality's digital portal or through the gov.il unified business licensing system. The application requires:

  • Completed application form identifying the business type, premises address, and owner details
  • Current floor plan of the premises drawn to scale, showing all rooms, exits, equipment placement, and ventilation
  • Copy of the lease agreement or property ownership document
  • Company registration certificate (Niyar Chevra) or Osek Murshe/Osek Patur registration from the Tax Authority
  • ID of the business owner (or passport for foreign nationals)
  • For food businesses: proposed menu and description of food preparation methods
  • Fire safety preliminary assessment (may be requested at this stage or later)

Step 3: Conditional Operating Permit (Ishur Asak Zmanit)

Under the 2018 Reform, many business categories are eligible for a conditional operating permit (*ishur asak zmanit*) that allows the business to open while the full licensing review continues. This permit is valid for up to 90 days and can be issued within 30 working days of a complete application. Businesses operating on a conditional permit are subject to surprise inspections and must comply with all conditions stated in the permit. A violation during the conditional period can result in its revocation and a bar on applying for a new conditional permit for 12 months.

Step 4: Inspections by Relevant Authorities

Each consulting authority — Ministry of Health, Fire Service, Environmental Protection, Police (where required) — will inspect the premises and submit a written report (*takdin*) to the municipality within 45 working days under the 2018 Reform deadlines. If an authority fails to respond within the deadline, the municipality may under certain conditions proceed to issue the license without that body's sign-off, though this mechanism is rarely invoked in practice.

Step 5: Receive Conditions or License

After all reports are received, the municipality issues either: (a) the full rihuy asak if all conditions are satisfied; (b) a license with attached conditions (*tenai rihuy*) that the business must comply with on an ongoing basis; or (c) a refusal, which can be appealed to the Administrative Affairs Court (*Beit Mishpat Leminhali Asarim*).

Step 6: License Renewal

Business licenses in Israel are not permanent. The renewal period depends on the business category: most restaurants and food businesses hold a one-year license renewed annually; hotels may hold licenses valid for three or five years; lower-risk businesses may receive ten-year licenses. Renewal requires confirmation that conditions are still being met and, for annual licenses, a new fee payment. A business that fails to renew on time is operating without a valid license and is subject to the same criminal penalties as a business that never obtained one.

In Practice: Foreign-owned businesses often encounter a practical problem at Step 2: the company director who signs the application is abroad and has not appointed an Israeli authorised signatory (meyukhad letafkid). The municipality's system requires a signature from someone present in Israel. A limited power of attorney (*yifui koach*) granted to the Israeli lawyer or architect managing the project resolves this — but it must be notarised and apostilled before it is accepted for corporate signatories. Build this into your setup timeline if you will not be physically present in Israel during the application process.

5. Timelines and Costs

Timelines

The theoretical timeline under the 2018 Reform — from submission of a complete application to receipt of the permanent license — is 45 working days for each consulting authority, plus municipal processing time. In practice, for new premises with multiple consulting authorities:

  • Simple food retail or professional services (1–2 authorities): 2–4 months from submission of a complete application
  • Restaurant with Ministry of Health and Fire Service involvement: 3–6 months for a permanent license; a conditional permit may be available within 30–45 working days allowing earlier opening
  • Complex businesses (fuel stations, industrial, nightclubs with police involvement): 6–12 months; in some cases up to 18 months where structural changes are required following inspections

The most common cause of delay is an incomplete application at Step 2 — each missing document resets the clock. A second common cause is premises that require physical modification following an inspection (e.g., a kitchen that fails Ministry of Health ventilation standards must be corrected and re-inspected before the process can advance).

Costs

Israeli municipal licensing fees vary by municipality and are updated periodically. Indicative ranges for 2026:

  • Application fee (non-refundable): NIS 500–2,500 depending on business type and municipality
  • Annual license fee for a restaurant (up to 100 covers): approximately NIS 3,000–8,000 per year depending on the municipality (Tel Aviv is at the higher end)
  • Annual license fee for a small food retail store: approximately NIS 1,500–4,000
  • Hotel license fee: NIS 10,000–40,000 depending on number of rooms and star classification
  • Professional assistance: An architect to prepare the required plans costs NIS 8,000–25,000; a licensing consultant (*yaats rihuy asarim*) who manages the multi-authority process charges NIS 5,000–20,000 for a restaurant-type project

These figures are indicative. Municipalities publish their official fee schedules annually; confirm specific rates with the municipal licensing department before budgeting.

6. Special Considerations: Restaurants, Food Businesses, and Home-Based Operations

Restaurants and Food Businesses

Food businesses face the most demanding licensing process of any category. Beyond the standard municipal review, the Ministry of Health district office inspector will conduct a physical inspection of the kitchen and examine:

  • Ventilation: Israeli Standards Institute (Makhon HaTakanim) requires specific air-change rates per hour for different kitchen zones; non-compliant kitchen hoods are one of the most common grounds for initial refusal
  • Cold chain equipment: walk-in cold rooms and display fridges must meet minimum temperature-hold specifications
  • Separation of raw and cooked food areas: cross-contamination prevention is a scored criterion
  • Water supply and drainage: hot and cold water to every preparation surface, with grease traps meeting municipal specifications
  • Pest control documentation: an active pest control contract must be in place from day one

A food business that wishes to serve alcohol must additionally obtain a rihyon le-mekhirat mashke meshakker (alcohol retail license) from the municipality under the Prohibition on Alcohol Consumption Law 5743-1983. For a bar or nightclub, Police approval under Section 17 of the Business Licensing Law is also required.

Home-Based Food Businesses

Many foreign nationals living in Israel want to run catering, baking, or food-delivery businesses from home. The legal position is stricter than most expect: any food preparation business — including a home baker selling online — is a licensed business under the Business Licensing Law's food schedules. Running such a business from a residential apartment requires:

  • Municipal approval for commercial use within a residentially zoned property (frequently refused)
  • Ministry of Health inspection of the domestic kitchen (which rarely meets commercial standards without significant investment)
  • Building permit approval for any structural modification to create a separated food-prep area

In practice, many small home-based food businesses operate without a license, accepting the legal risk. The consequences of enforcement — fines plus a closure order — can be severe, and the municipality can act on a single complaint from a neighbour. The safer route is to rent kitchen space in a licensed shared commercial kitchen (*mitbah meshutaf*), which can be licensed as part of its own rihuy asak, covering your activity.

Childcare and Educational Settings

Foreign nationals operating or investing in childcare or educational businesses face an additional layer: the Supervision of Day Care Centres for Children Law 5725-1965 and the Supervision of Educational Institutions Law 5729-1969, which require separate operating permits from the Ministry of Labour (for daycare) or Ministry of Education (for schools and tutoring centres) in addition to the municipal rihuy asak.

In Practice: A UK-based couple opened a children's enrichment centre (coding classes and arts) in Herzliya in 2025. They incorporated an Israeli company (chevra beysraelit) and signed a three-year lease — then discovered the municipality required both a rihuy asak (business license) under the Business Licensing Law and a permit under the Supervision of Educational Institutions Law 5729-1969 from the Ministry of Education's district office. The Ministry of Education permit required a separate application, including a background check on the teaching staff and a curriculum review. Total time from lease signing to opening: seven months. They could have reduced this to five months by filing both applications simultaneously — something their Israeli corporate lawyer advised, but which they delayed acting on.

7. Penalties for Operating Without a Business License

Running a business that requires a rihuy asak without holding a valid one is a criminal offence under Section 14 of the Business Licensing Law 5728-1968. The consequences are serious and escalate for repeat offenders:

  • Criminal fine for first offence: The standard fine for operating without a license is set by the Penal Law (Fines) Regulations. Courts typically impose fines in the range of NIS 19,200 to NIS 38,400 for a first offence, depending on the scale of the operation and the duration of unlicensed activity.
  • Criminal fine for repeat offence: For a second or subsequent conviction, fines commonly range from NIS 38,400 to NIS 75,600. The court has discretion to impose higher fines where the unlicensed operation continued over a prolonged period or generated significant revenue.
  • Closure order (Tzav Sgirat Esar): Separately from the criminal process, the municipality can apply to the local court for an immediate closure order on the premises. Under Section 17A of the Business Licensing Law, the court may issue a closure order ex parte (without a hearing) that takes effect within 24 hours. Once a closure order is in force, operating the business from those premises constitutes a contempt of court offence (biza beit mishpat) and can result in imprisonment.
  • Sealing of premises: Following a closure order, the municipality's enforcement officers can physically seal the premises. Breaking the seal is a separate criminal offence.
  • Director and officer liability: The criminal liability for operating without a license can extend to the directors and officers of the company operating the business under Section 25 of the Business Licensing Law, which creates a presumption that the senior officer responsible for the business is personally liable unless they can demonstrate the violation occurred without their knowledge and they took all reasonable steps to prevent it.
Common Mistake: Foreign investors who purchase an existing Israeli restaurant or food business often assume the previous owner's business license transfers with the sale. It does not. Under Section 7 of the Business Licensing Law 5728-1968, a business license is personal and does not transfer when ownership changes. The new owner must apply for a fresh license before continuing to operate. In an asset purchase, a well-drafted sale agreement will include a condition precedent requiring the municipality to confirm that it will accept a new license application in the buyer's name, and the seller should agree to cooperate during the transition period. Closing without this in place and then discovering the premises fail current standards can result in a forced closure of a business you have already purchased.

Frequently Asked Questions

Most standard office-based activities — consulting, software development, management, import/export trading — are not listed businesses under the Business Licensing Law 5728-1968 and do not require a rihuy asak. However, if the office activity involves food service, childcare, healthcare, financial services regulated by the Capital Markets Authority, or any other activity in the Law's schedules, a license from the relevant authority is required regardless of whether the company is Israeli or foreign.
For new premises, the full process typically takes three to nine months from submission of a complete application to receipt of the permanent license. Under the 2018 Business Licensing Reform (Amendment 34), businesses in fast-track categories can receive a conditional operating permit (ishur asak zmanit) within 30 working days, allowing them to open while the permanent review continues. Delays almost always stem from incomplete applications or from premises that require physical modification to meet inspection standards.
Under Section 14 of the Business Licensing Law 5728-1968, operating a listed business without a valid rihuy asak is a criminal offense. First-offense fines typically range from NIS 19,200 to NIS 38,400; repeat offenses can reach NIS 75,600 or more. Separately, the municipality can apply to the court for a closure order (tzav sgirat esar) that takes effect within 24 hours and can physically seal the premises. Corporate directors and officers can face personal criminal liability under Section 25 of the Law.
No. Under Section 7 of the Business Licensing Law 5728-1968, a rihuy asak is issued to the business owner for specific premises and does not transfer automatically when ownership changes. The new owner must apply for a fresh license. When buying an Israeli business with licensed premises, include a condition precedent in the sale agreement requiring the municipality to confirm it will accept a new application in the buyer's name — and verify that the premises currently meet all applicable standards before committing to the purchase.
It depends on the activity. Most consulting, freelance, and professional services run from a home office do not require a rihuy asak. However, any food preparation business — even a home baker selling online — is a licensed business under the Business Licensing Law's schedules. Operating such a business from a residential property requires municipal approval for commercial use of residentially zoned premises (frequently refused), plus Ministry of Health inspection. The practical alternative is renting space in a licensed shared commercial kitchen (mitbah meshutaf).

Related Guides

How to Form a Company in Israel: Guide for Foreign Entrepreneurs Annual Compliance for Israeli Companies: What Foreign Owners Must Do Commercial Leases in Israel for Foreign Businesses Employment Law in Israel for Foreign Companies and Expats Data Protection Law in Israel for Businesses and Foreign Companies
Adv. Eli Shimony

Adv. Eli Shimony

Licensed Israeli Attorney

Adv. Eli Shimony advises foreign entrepreneurs, investors, and companies on setting up and operating businesses in Israel, including navigating the multi-authority business licensing process, commercial leasing, and corporate compliance.

Request Consultation Firm Website

Opening a Business in Israel and Need Licensing Guidance?

Whether you need to navigate the rihuy asak process, deal with multiple authorities, or acquire an existing licensed business, Adv. Eli Shimony can guide you through every step of the Israeli business licensing system.

Get Free Consultation →