27 June 2022 was an important date for the Israeli business community. This was the day Israel’s legislature, the Knesset, passed laws mandating electronic communication between government departments and Israeli businesses. One particular piece of legislation, Amendment 35 to the Israeli Companies Law 5759-1999, saw the introduction of mandatory paperless communication between the Israeli Registrar of Companies (IRoC) – part of the Ministry of Justice – and all companies formed after the enactment date. This move to paperless communication is just one of the initiatives which Israel’s government has taken to maintain, and build on, the country’s reputation as the ‘Start-Up Nation’. Israel is already one of the world’s least complex countries to do business in, ranking 63rd out of 78 in TMF Group’s newly-published 2023 Global Business Complexity Index. This has contributed to the country’s ability to attract new market entrants and investment – especially in its tech sector. According to World Bank statistics, Israel’s net inflow of foreign direct investment (FDI) in 2022 was $27.76 billion, placing the country among the top 20 host countries for FDI. Israel is known for its highly skilled workforce, advanced technological environment, entrepreneurial culture, robust technological infrastructure and innovation-driven economy. Over recent years, the country has been home to the world’s highest number of start-ups per capita, and is host to more than 350 R&D centres belonging to multinational corporations. The wider changes to digital communication between Israeli government bodies and the public are intended to accelerate the provision of digital services by public bodies and streamline and improve services to the public, In addition to providing Israeli businesses and residents with a faster and more efficient service, it is estimated that the move to digital communication will directly save the state around NIS 820 million per year. There is also the positive environmental impact of a dramatic reduction in the quantity of letters and forms being printed and delivered – estimated to provide annual savings of around 30,000 trees and 18,634 tons of greenhouse gas emissions. What Has Changed? The changes to Israel’s Companies Law included a number of amendments, SPECIAL FEATURE 43 Special Feature Legislation Boosting Efficiency at the Israeli Company Registrar A recently enacted amendment to Israel’s Companies Law mandates paperless communication between the Israeli Registrar of Companies and all companies formed after June 2022. Here, Diana Grosz, head of Legal and Corporate at TMF Israel, looks at what these changes mean for companies setting up and operating in Israel, and how they are already providing a dramatic efficiency boost in dealings with the government body – as well as simplifying compliance. ‘The Start-Up Nation’
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