“Are you sure this money is legal?”
That question came from a branch manager at a bank in Bucharest, after three of my clients, all successful Israeli entrepreneurs with entirely legitimate businesses, tried to transfer funds to purchase a residential project in Romania. These weren't crazy sums, not a suspicious scenario, and certainly nothing illegal. Just three businessmen who want to invest in real estate.
But in 2026, that is no longer enough.
What changed? Everything.
Five years ago, when I accompanied an Israeli investor in purchasing a commercial property in Europe, the process was relatively simple. We filled in forms, presented basic documentation on the source of the funds, and the bank approved the transfer within hours to a few days. Was it necessary to prove the money was legal? Certainly. But it was a routine check, not an investigation.
Today? Today I find myself preparing files 200-300 pages thick for every deal. This is not merely an ordinary declaration of assets, it is full financial archaeology that traces every single shekel back in time, sometimes up to a decade.
What happened? Two words: national security
Many Western countries have realized something simple: strategic real estate - buildings near ports, military bases, critical infrastructure facilities, or even sensitive technology zones - can be a tool of foreign influence. The Chinese invested billions in European ports, the Russians bought strategic properties across Europe, and politicians woke up.
The result? New legislation everywhere. In the US, CFIUS (Committee on Foreign Investment in the United States) was established, which reviews every significant foreign investment. The European Union adopted a similar review mechanism. Cyprus, which was once a convenient “gateway” for foreign investors, drastically tightened its AML (Anti-Money Laundering) rules.
So what does this mean for the average Israeli investor?
1. The KYC process became an investigation
Once, Know Your Customer (KYC) was a one-page form: name, source of funds, signature. Today? It is a full investigation:
- Bank statements going back 12-24 months.
- Detailed explanations for every significant deposit.
- Accountant's confirmations on the source of the funds.
- In some cases: confirmations from tax authorities.
- Notarized affidavits that the money is not connected to illegal activity.
One of my clients, the owner of a successful hi-tech company, was required to explain why he deposited 800,000 ₪ into a savings scheme two years ago. The answer? He sold an apartment in Tel Aviv. But that wasn't enough; the bank demanded the sale contract, a confirmation from an accountant, and even the buyer's accountant's report.
2. The geopolitical situation complicates everything
Since October 7, I have seen a clear change in the attitude of European banks toward Israeli investors. This is not antisemitism (at least not always), it is fear of regulatory risk. Banks worry:
- That Israeli money may be connected to conflict zones.
- That Israel's political ties will entangle them in American regulation.
- That the money may be blocked in the future because of sanctions (even hypothetical ones).
One of my clients, a veteran real estate investor in Cyprus, received a letter from the bank asking him to “explain his business connection to conflict zones.” He invests in hotels! He has no connection whatsoever to conflict zones. But the Israeli passport was enough to set off a red flag.
3. The dual track: privacy versus total transparency
The interesting paradox: on one hand, regulations like GDPR in Europe protect privacy. On the other hand, the moment you try to invest in real estate, you have to disclose almost everything.
I learned this the hard way when I accompanied a young couple who wanted to buy a vacation apartment in Portugal. They asked to “maintain privacy” and not disclose unnecessary financial information. I told them honestly: if you want privacy, don't buy real estate in Europe in 2026. The process requires almost total transparency.
So how do you get past the barrier?
A. Start preparing the file early. Don't wait for the moment you find a property. Start organizing documents 3-6 months in advance: bank statements, tax confirmations, explanations of sources of funds.
B. Work with local or Israeli lawyers who understand the regulation. Every country is different. What works in Romania will not necessarily work in Cyprus. A good lawyer will cost 500 euros an hour, but will save you months of delays.
C. Be completely transparent. Don't try to hide anything. Even if something seems “embarrassing” (for example, a loan from family), it is better to disclose it than to go with partial explanations. Banks smell a lack of transparency from a kilometer away.
D. Consider alternative legal structures. Sometimes, purchasing through an Israeli company (rather than as a private individual) can ease the process. Or the opposite - it depends on the case. This is where an experienced lawyer makes the difference.
The last word
Investing in international real estate today requires more patience, more documentation, and more transparency than ever. But it is not impossible. I have seen dozens of clients go through the process successfully, even in the current challenging period.
The key? Preparation, professionalism, and a willingness to play by the new rules. The world has changed, and smart investors are changing with it.
What is your experience? Have you run into similar difficulties?
Stories are based on real situations, with identifying details changed. Not legal advice.
Translated from the Hebrew original. עברית