Before opening a business abroad: a readiness check
Eleven questions on structure, tax, contracts, employees and banking. Wherever you answer “no” or “not sure”, you will see what to check, with a link to the relevant guide. The check is not saved or sent anywhere.
Market entry readiness check
Have you defined in which country you will operate and what exactly you will do there: sales, services, a project or an investment?
First define the country and the activity. That definition determines the structure, the tax and the registrations. A good place to start is the comparison between the countries.
Have you decided which structure you will operate through: directly from Israel, a branch, a representative office or a subsidiary?
Each structure has implications for liability for debts, tax and reporting. The country guides compare the options.
Have you checked where the company will actually be managed, and whether it may be considered an Israeli resident for tax purposes?
A foreign company managed from Israel may be considered an Israeli resident, and there are also controlled foreign company rules. This is checked with a lawyer and an accountant before registration.
Have you checked how much tax will be paid on profits in the country, how much will be withheld when a dividend is transferred to Israel, and what applies in Israel?
The path of the profit to Israel includes corporate tax, withholding tax under the tax treaty and Israeli tax with a credit. It is worth checking it before choosing a structure.
Have you checked VAT: whether registration in the country is required, and whether an invoice from Israel can be zero-rated?
The obligation to register for VAT abroad, the reverse charge and zero-rating on exports of services depend on the type of customer and the activity. It is worth checking before the first invoice.
Have you checked the local partner, agent or distributor in the registers: company, controlling shareholders, proceedings and charges?
A check of the companies register, the beneficial ownership register and the court proceedings registers takes little time and can prevent a dispute. The local partner checklist sets out the items.
Do you have a contract with the foreign party that sets the governing law, jurisdiction or arbitration, and payment terms?
Without a governing law and jurisdiction clause, even a small dispute may be heard in a foreign court and in a foreign language. It is worth settling this before signing.
If you will have employees or contractors in the country, have you checked whether a permanent establishment arises and what the payroll and social security obligations are there?
An employee who negotiates or signs on behalf of the company may create a permanent establishment. Remote employment also requires a review of the country's labour and social security law.
Have you prepared the documents for opening a bank account: company documents, controlling shareholders, source of funds and a business plan?
Banks abroad require identification documents for the company and its controlling shareholders, an explanation of the source of funds and a description of the business. A bank account is often the longest stage of the setup.
If you will sell to customers in the European Union, have you checked your data protection (GDPR) obligations?
An Israeli company offering services to EU residents may be subject to the GDPR, and sometimes needs a representative in the EU. It is worth checking before you start collecting data.
Do you have an annual deadline calendar for the company in the country, and a local accountant responsible for it?
Annual financial statements, tax returns, VAT and beneficial ownership updates are filed on fixed dates, and late filing costs money. The company deadline calendar brings them together by country.
The information is general and is not legal or tax advice, nor a substitute for a review of your business.
Starting operations abroad, or facing a dispute?
In an introductory call we will understand the goal, review the structure and set out the next steps.
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