What is the minimum share capital required to register a private company in Israel?

The Companies Law 5759-1999 is the primary statute governing Israeli companies. Unlike some jurisdictions — such as Germany's GmbH, which mandates a minimum EUR 25,000 — Israel abolished any capital threshold for private companies. A hevra baam (limited liability company, abbreviated B.M.) can technically be incorporated with an authorized share capital of NIS 1, divided into a single NIS 1 share. In practice, most incorporations set an authorized share capital of NIS 1,000,000 divided into 1,000,000 ordinary shares of NIS 1 each — not because the law requires it, but because the structure provides flexibility for future share issuances without amending the articles of association. The full process for setting up an Israeli entity is explained in the Israeli company formation guide.

For foreign investors establishing an Israeli subsidiary or startup, the share capital structure matters beyond simple registration. The amount actually paid in as equity affects the company's withholding tax treatment when distributing dividends abroad and may be relevant to R&D grant eligibility under Israel Innovation Authority criteria. Israeli banks — which require extensive KYC documentation from foreign shareholders — typically set their own internal thresholds for account activation that far exceed the statutory minimum. Investors who plan to apply for a preferred enterprise tax benefit under the Law for the Encouragement of Capital Investments should also consider how the initial capitalization interacts with the benefit criteria. Issuing shares at a premium above nominal value, rather than injecting capital purely as paid-up share capital, allocates funding between share capital and a share premium reserve with different tax and distributable-profits implications.

From the full guide: Company Formation in Israel: A Complete Guide for Foreign Investors

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