Why Do You Need an Accountant to Start a Business in Israel?
Outsourcing financial audit is a common practice for companies operating in Israel. And that’s no wonder – the country recognizes multiple types of organizations, with each of them paying different taxes. Regional restrictions may apply as well; so, you would need to familiarize yourself with the specifics of local laws. Considering all the mentioned aspects, hiring a professional accountant who is fully aware of every aspect of entrepreneurship in Israel is a proper decision to take before starting your business. If you are currently in search of a trusted auditor, check out https://auditing.co.il/en/accountant-in-tel-aviv/.
Which Types of Companies Can Be Opened in Israel?
Before setting up a business, you should go through the types of organizations that can be opened in Israel. Although there are multiple options available, most newly registered companies take one of the 3 following forms:
- Individual entrepreneur, or esek patur;
- An entrepreneur with a higher turnover – esek murshe;
- Limited liability company, or hevra baam.
For detailed coverage of all legal aspects associated with new company setup in Israel, consider looking through https://auditing.co.il/en/.
Taxation for Various Types of Businesses
Depending on the form of business that you are planning to register, taxes and report requirements would differ significantly. For instance, esek paturs do not pay value-added taxes and do not need to submit monthly income reports. However, their annual income is limited at 100,187 shekels (around 28,500 USD). Representatives of several professions, such as lawyers, doctors, or translators, are not allowed to register as esek paturs.
Opening an esek murshe allows you to legally cooperate with large entities and doesn’t limit annual income. However, such companies are obliged to submit bi-monthly VAT reports and summary reports once a year. Hevra Baam commonly presupposes more than one owner, significant investments, and complicated audit. Such companies require professional assistance to be opened; so, hiring an experienced accountant is strongly advised if you are planning to set up a hevra baam.