Company formation in Israel – legal support from incorporation to the first round

Corporate · October 19, 2026

The short answer

Forming a company is four decisions and two documents. The decisions: which structure (a limited company, a partnership or a sole trader); who holds what and what happens when someone leaves; who decides what; and how an investor comes in. The documents: articles of association, which bind the company and everyone who later joins it, and a founders’ agreement, which binds the founders to one another. The registration itself – online, a fee of ILS 2,559, a few business days – is the easy part. The firm handles every stage: the structure, the documents, the filing, the authentication for founders abroad, and what comes after the certificate of incorporation.

What the service includes

Stage	What is done	Legal basis
1. Structure	An introductory conversation about the business, the founders and the plans; a recommendation for a limited company, a registered partnership or operating as a sole trader; capital structure and classes.	Companies Law sections 2–6, 35; Partnerships Ordinance
2. Name and checks	Three name alternatives, checked against the companies register and the trademarks register.	Sections 25–29
3. Tailored articles	Not a template: entrenched majorities, appointment rights, transfer restrictions, pre-emption, a deadlock mechanism, private-company reliefs. In Hebrew or English.	Sections 18–22, 294; regulation 1(d)
4. Founders’ agreement	Share split, vesting and repurchase, roles, intellectual property, non-competition, confidentiality – aligned with the articles so that what is meant to bind the company actually does.	Section 17(a); CC 53928-02-24 (2026)
5. Filing	Verification of signatories, online filing with the Registrar of Companies by smart card, follow-up to the certificate of incorporation; correction and a “continuation application” if needed.	Sections 8, 23(b); regulations 1, 16B
6. Founders abroad	Passport and signature certification before a foreign notary with an apostille or at a consulate; a foreign corporation as shareholder; registered office at the firm.	Regulation 16; section 123
7. After registration	Registers of shareholders and directors, resolutions on signatories and the bank account, IP assignments, ratification of pre-incorporation acts, an option plan.	Sections 12–14, 130–131, 288(b)(1)
8. Ongoing	Reports within 14 days, the annual report, the annual fee, board and shareholder resolutions, allotments and transfers – as outside corporate counsel.	Sections 140–141, 354, 362A

Why not “standard articles and a founders’ agreement from the internet”

The Companies Law has no model articles. Section 18 requires four items – name, objects, registered capital and limitation of liability – and everything else follows the Law’s defaults unless you wrote otherwise: amendment by simple majority (section 20(a)), allotments by the board with no pre-emption right (section 288), freely transferable shares (section 294), removal of a director by simple majority (section 230). For two equal founders that is an invitation to deadlock; for three unequal ones, an invitation to oppression. What each default means and what tailored articles change.

And the founders’ agreement, however important, does not bind the company. The articles are a contract between the company and its shareholders and among them (section 17(a)); a founders’ agreement is a contract between its signatories. In March 2026 the Economic Department of the Tel Aviv District Court (CC 53928-02-24) held that a board is not subject to a shareholders’ agreement that was not adopted into the articles, and may not even take it into account. The real legal work in a formation is therefore the alignment: the mechanisms that must bind the company go into the articles, in short form; private matters – pay, timelines, vesting details, non-competition – stay in the agreement, away from the public file at the Registrar. On the founders’ agreement.

What it costs – the official fees

Under the Companies (Fees) Notice, 5786-2025 (Kovetz HaTakanot 12113), in force from 1 January 2026: a registration fee of ILS 2,559 for an online application (ILS 3,123 for a non-online filing); an annual fee of ILS 1,777, or ILS 1,338 if paid by 31 March; no annual fee in the year of registration. The firm’s fee is given in a written proposal after the introductory conversation, according to the scope of work – the number of founders, the complexity of the articles and the agreement, founders abroad – and before anything starts. Any tax matter – corporate tax, dividends, holding structure – is checked with the accountant or a tax lawyer; on these the firm gives general information only.

Founders and directors who are not in Israel

A good part of the companies the firm forms belong to Israelis living abroad, to foreign founders with an Israeli partner, or to a foreign company opening an Israeli subsidiary. There is no citizenship or residency requirement for a shareholder or a director. The passport is certified under regulation 16 of the Companies Regulations – an Israeli consul, a notary in the passport’s country or in the country of residence, or an Israeli lawyer – and only a lawyer may file an application to which such a certification is attached (regulation 16A(d)). The firm’s practice: the founder signs the articles and declarations before a notary in his country, the certification receives an apostille, and the firm files. A foreign corporation attaches a certificate of incorporation and a certificate of good standing with a notarised translation. The registered office must be in Israel (section 123) – the firm serves as such, and as the digital address to which the Registrar’s notices are sent (section 123A), so that the Registrar’s notices are not lost. The full procedure, step by step.

After incorporation

Registration is the beginning of the obligations. Every change in the articles, the board, the address, allotments and transfers is reported to the Registrar within 14 days (section 140); an annual report (section 141) and an annual fee (section 9) are due every year; and non-compliance costs ILS 9,380 per breach (section 354), is collectible from the directors (section 360), and leads to registration as a “violating company”, after which the Registrar may refuse to register a change of name, charges – and sometimes the next company (section 362A). The firm supports private companies in this ongoing work as outside corporate counsel – board meetings, resolutions, allotments, an employee option plan (section 102), and preparation for the first round (SAFE or convertible note). On the corporate practice as a whole – the practice page.

Frequently asked questions

How long does it take to form a company?

The Corporations Authority publishes its processing times on its website and does not commit to a fixed figure. In the firm’s experience, when the file is in order – an available name, complete articles, signed and verified declarations – the certificate of incorporation arrives by e-mail within a few business days. The stage that takes time comes before filing: the agreements between the founders.

What are the official fees?

Under the Companies (Fees) Notice, 5786-2025 (Kovetz HaTakanot 12113), in force from 1 January 2026: a registration fee of ILS 2,559 for an online application; an annual fee of ILS 1,777, or ILS 1,338 if paid by 31 March (no annual fee in the year of registration). Lawyers’ and accountants’ fees are not fixed by law and are given in a written proposal before work begins.

Can I form a company without a lawyer?

Yes, through the self-service route using national digital identification (regulation 16B), which generates minimal articles. It suits a one-person company whose owner is an Israeli citizen and resident. With two or more founders or an investor on the horizon, the articles are where a lawyer is needed in practice; where a founder is not an Israeli resident, the regulations themselves require a lawyer to file (regulation 16A(d)).

I live abroad. Can I form an Israeli company without travelling?

Yes. There is no residency requirement for a shareholder or a director. The passport copy is certified under regulation 16 (an Israeli consul, a foreign notary, or an Israeli lawyer); the firm’s practice is to have the founder’s signature on the articles and declarations certified by a notary in his country too, with an apostille, and to file as the filing lawyer. The registered office must be in Israel (section 123) – our office serves as such.

What is the difference between the articles and a founders’ agreement, and why do I need both?

The articles are a contract between the company and its shareholders and among them (section 17(a) of the Companies Law) and are public; a founders’ agreement binds only its signatories and stays private. A 2026 decision held that a board is not subject to a shareholders’ agreement that was not adopted into the articles. The firm therefore puts into the articles the mechanisms that must bind the company – transfer restrictions, special majorities, appointment rights – and leaves private matters in the agreement.

Does the firm handle tax and the opening of tax files?

No. Opening files with the Tax Authority, VAT and National Insurance, and questions on the taxation of the company and its owners, are matters for a CPA or a tax lawyer; the firm works alongside the company’s accountant and gives general information only.

The above is general information on Israeli law only, current as of the date of publication, and does not constitute legal advice or a substitute for advice on your specific circumstances. Fee amounts are the official 2026 figures published by the Israeli Corporations Authority and are updated annually. Anything concerning tax should be checked with a tax lawyer or a CPA. Consult a lawyer before acting.

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