Must a foreign company register in Israel to do business there?

Section 346 of the Companies Law 5759-1999 requires a foreign company that establishes a place of business in Israel, including an office maintained for the transfer or registration of its shares, to register as a foreign company within one month of setting it up. Registration means filing the company's incorporation documents, a Hebrew translation, details of its directors, and the name of a local person authorized to accept legal service. The statute targets a continuing place of business, not one-off dealings. A foreign company can therefore sell to Israeli customers, sign a commercial contract, or appoint a distributor without registering, as long as it does not set up its own fixed establishment.

The harder questions are usually tax and employment, not company registration. Even without a registered branch, a foreign company that creates a permanent establishment for tax purposes, or that directly employs staff in Israel, can pick up Israeli filing and withholding duties that are assessed separately from the Companies Law test. Many foreign businesses that want a genuine local footprint choose between registering a branch and forming an Israeli subsidiary, which limits liability and is often cleaner for banking and contracts. Operating an unregistered place of business exposes the company and its officers to fines. If your activity is shifting from occasional deals toward a standing presence, get advice before the line is crossed. The guide on a foreign company branch in Israel walks through the choice.

From the full guide: Opening a Foreign Company Branch in Israel

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