Registering a foreign company for VAT in Israel is a paper-based, Hebrew-language procedure with several moving parts. The company registers as a VAT dealer (Osek Murshe) in its own name, appoints a fiscal representative in Israel, and supports both with authenticated corporate documents and a local bank account. Most delays come not from the tax authority but from what has to be assembled around the application.
Not sure yet whether your company must register? Start with who is liable to register for VAT in Israel.
What the Registration Process Involves
Israel has no simplified VAT registration for foreign businesses. Many countries let non-residents register online through a simplified procedure; Israel does not. Legislation to introduce one has been proposed in the Knesset but has not been approved, so foreign companies go through the standard procedure:
- Registration forms: the application to open a VAT file (Form 821) and the appointment of a representative (Form 22). All forms are completed in Hebrew.
- Corporate documents: the company’s incorporation and governance documents, authenticated by apostille or certified by a notary.
- A fiscal representative in Israel: appointed under Section 60 of the VAT Law, in addition to the company’s own registration.
- A local bank account: Israeli bank details are needed for the registration.
Where the Process Stalls
- The bank account. Anti-money-laundering onboarding for a foreign-owned company, including tracing its ultimate beneficial owners, commonly takes two to four months. Start it early, in parallel with the documents.
- Document authentication. Foreign documents without a valid apostille or notarial certification are rejected, and obtaining them abroad takes time.
- Hebrew-only forms. Every form is in Hebrew, so foreign companies need local help to complete them correctly.
- Finding a representative. Because the representative carries personal liability, the appointment needs indemnity arrangements agreed in advance.
The Fiscal Representative (Section 60)
Section 60(a) of the VAT Law requires a non-resident taxable person with business or activity in Israel to appoint a representative whose permanent residence is in Israel, within 30 days of starting activity in Israel.
- It is an additional obligation. The company remains the registered dealer; the representative stands alongside it before the Israel Tax Authority.
- When it applies. Wherever the entity has no Israeli-resident directors: for a foreign company operating through a branch, and for an Israeli subsidiary whose directors are all abroad.
Branch or Subsidiary?
| Foreign company branch (Chevrat Chutz) | Israeli subsidiary (Chevra Bat) | |
|---|---|---|
| Legal status | Part of the foreign parent; registered with the Registrar of Companies (Section 346, Companies Law) | A separate Israeli company |
| Parent’s liability | Direct and unlimited | Limited |
| Fiscal representative | Required | Required if no director is an Israeli resident |
| Income tax | A branch can constitute a permanent establishment (ITA Circular 4/2016) | Israeli resident company; intercompany pricing under Section 85A |
Corporate Documents Checklist
- Certificate of incorporation or good standing.
- Articles of association or bylaws.
- Board resolution and power of attorney appointing the representative.
- Passport copies of the directors and authorized signatories.
- Contracts or orders evidencing the activity in Israel.
After Registration: Bookkeeping and E-Invoicing
- Registration number: the regional VAT office issues a 9-digit VAT registration number, needed for invoicing and customs declarations.
- Certified software: Israeli tax invoices must be issued through bookkeeping software registered with the tax authority, not Word, Excel or PDF templates.
- Allocation numbers: under the “Israel Invoices” reform, B2B invoices above NIS 5,000 before VAT need a real-time allocation number from the tax authority’s SHAAM system. Without one, the Israeli customer cannot deduct the input VAT, and will often refuse to pay the invoice.
- Corrections: issued invoices cannot be edited or deleted; changes are made through a credit note.
Summary Checklist
| Step | What is needed | Typical timeline |
|---|---|---|
| Documents | Corporate documents with apostille or notarial certification | 3–10 business days |
| Representative | Section 60 appointment (Form 22) and indemnity | 1–3 business days |
| Bank account | Local bank AML onboarding | 2–4 months |
| Registration | Form 821 in Hebrew, filed with the regional VAT office | 5–14 business days |
| Invoicing | Certified software and SHAAM integration | Before the first invoice |
Registering Your Company
Registration is manageable when the documents, the bank and the representative are lined up from the start. Contact Alex Polo to arrange Section 60 fiscal representation and handle the full VAT registration for foreign companies.