Closing a Company Abroad: Voluntary Liquidation vs Strike-Off, Tax Clearance, Closing the Bank Account and the Tax Consequences in Israel

A project has ended, the market did not justify itself, or the partners decided to part ways. In all these cases there remains a company abroad that needs to be closed properly. A proper closure ends the reporting obligations and fees, releases the directors from liability and allows the remaining money to be passed to the owners in an orderly way. A partial closure, or abandoning the company, may cost more than the closure itself. This guide explains the two main routes, compares five countries and sets out what happens in Israel, as of November 2026.

1What is the difference between voluntary liquidation and strike-off?

Voluntary liquidation is a procedure in which the company stops operating, appoints a liquidator (or the directors act as liquidators), realises its assets, pays its creditors and distributes the balance to the shareholders. Strike-off is removing the name from the register without a realisation procedure, and it usually suits only a company with no assets, debts or open liabilities.

2How do you close a company in Romania, Bulgaria, Greece, Cyprus and Delaware?

In all the countries in the table the logic is similar: an owners' resolution, notice to creditors, settling tax obligations, final returns and deregistration. The differences are in the waiting period for creditors and whether formal tax clearance is required. The table includes only what has been verified in the sources at the end of this guide; details that were not verified are described in general terms.

For details on formation and structure in each country see Setting up an SRL in Romania, Forming a company in Bulgaria, Forming a company in Greece, Forming a company in Cyprus and A US LLC for Israelis.

3Why is tax authority clearance the long stage?

Because the country's tax authority checks that all returns have been filed and that there are no debts, and only then approves or does not object to deregistration. A company that has not filed annual returns, VAT returns or payroll returns on time will have to complete them first, and sometimes pay penalties.

• Final financial statements: usually an opening liquidation balance sheet and a final liquidation balance sheet or report are required. In Cyprus, up-to-date audited statements are also required for the strike-off route.
• VAT: VAT deregistration and filing a final VAT return. Selling assets during liquidation may be subject to VAT.
• Corporate tax: gain from realising assets in liquidation, for example selling an apartment or equipment, is taxed in the company before distribution to the owners.
• Payroll and social security: lawful termination of employment, payment of employees' entitlements and a final report to the social security authorities.
• Withholding on distribution: in some countries the distribution of the liquidation surplus to the owners is subject to withholding tax, as a dividend or as a capital gain under local law. The rate and classification are checked against the treaty with Israel.

4What do you do with the bank account, the assets and the debts?

The bank account is closed last, after all payments to the authorities and creditors have gone out and the distribution to the owners has been transferred. Closing too early leaves the company with no way to pay final fees or receive tax refunds.

1. Map what is registered in the company's name: real estate, vehicles, shares in other companies, domains, trademarks, guarantees and leases.
2. Decide for each asset: sell to a third party, transfer to the owners in kind, or transfer to another group company. Each option has tax consequences in the country and in Israel.
3. Close contracts: office lease, suppliers, employees, licences. Check notice periods and exit penalties.
4. Pay debts: local creditors, authorities, shareholder loans. A shareholder loan that is not repaid may be distributed or waived, and each has a tax meaning.
5. Distribute the surplus according to the liquidation balance sheet, and transfer it to Israel with documents explaining the source of the money. See Transfer delays and source of funds at the Israeli bank.
6. Close the bank account and keep the account statements and the liquidation documents for the limitation period in the country and in Israel.

5What are the tax consequences in Israel of liquidating a foreign company?

For an Israeli shareholder, liquidating the foreign company is usually a taxable event in Israel. The consequence depends on the company's structure and history, so the review is carried out with an Israeli accountant before the decision, not after.

• Distribution on liquidation: under the Income Tax Ordinance, a distribution of assets to shareholders on liquidation is generally treated as a sale of the shares, so a capital gain or capital loss may arise. Part of the amount may be classified as a dividend, according to the profits accumulated in the company.
• Capital loss: when the company made losses, liquidation may create a capital loss that can be offset under the offset rules in Israel. Make sure the original cost of the shares is documented.
• Foreign tax credit: tax withheld in the foreign country on the distribution may be credited in Israel under the treaty. See Israel's tax treaties by country.
• Controlled foreign company: if the company's profits were already taxed in Israel as a "deemed dividend", check how this affects the tax on distribution, so as not to pay twice.
• A company owned by an Israeli company: the liquidation affects the parent company's financial statements and tax, including a written-off investment and exchange differences.
• Reporting: the liquidation, the distribution and the deregistration are reported in the annual return in Israel. See the Israel Tax Authority reporting hub.

6What is the risk of leaving a dormant company abroad?

A company that does not operate but has not been closed remains liable for returns, fees and sometimes an audit. Many owners discover the debt only when they need some approval, or when the authority starts proceedings against them.

• Accumulating returns and fees: an annual return to the register, a tax return, a VAT return and sometimes an annual fee. In Delaware, the annual franchise tax continues to apply as long as the company exists.
• Forced strike-off: many registrars strike off companies that have not reported, and in Cyprus section 327 of the Companies Law allows the registrar to strike off a company that is not operating. A forced strike-off does not close debts, and may harm remaining assets.
• Directors' liability: in some countries directors may be liable for tax debts or penalties of a company that is not managed.
• Bank account: banks close inactive accounts or require updated KYC documents; money left in the account may get stuck.
• In Israel: the company continues to be reported as a holding abroad, and you may be required to explain it.

7In what order do you work?

1. Check the position: open returns, tax debts, assets, contracts, employees and bank accounts.
2. Plan the tax in both countries: a local accountant and an Israeli accountant determine how and when to distribute and what tax is expected.
3. Choose a route: voluntary liquidation or strike-off, according to what remains in the company.
4. Adopt an owners' resolution and appoint a liquidator where required, with translation and apostille for documents from Israel.
5. Publish and notify creditors and wait for the period set by law.
6. Realise, pay and file final returns, and request tax clearance or a certificate of no debts.
7. Distribute, close the account and file the deregistration application, and keep all the documents.

8What to check before deciding to close, and how we accompany it

Before deciding, prepare a complete list of what is registered in the company's name and of all open reporting obligations, and obtain a tax estimate in Israel and in the foreign country on the distribution. We assist with the legal mapping of the company and its assets, coordination between the lawyers and accountants in the foreign country and the accountant in Israel, preparation of the owners' resolutions and the documents from Israel, and tracking the stages through to deregistration. The procedure itself in the foreign country is carried out by professionals licensed there.

More on this topic: A company abroad: comparison between countries · Exiting a project: selling the asset or selling the shares · An Israeli company in Romania

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