Economy Profile of Israel

Ease of Doing Business in Israel

Rankings on Doing Business topics – Israel

Topic Scores

Starting a Business

This topic measures the number of procedures, time, cost and paid-in minimum capital requirement for a small- to medium-sized limited liability company to start up and formally operate in each economy’s largest business city.

To make the data comparable across 190 economies, Doing Business uses a standardized business that is 100% domestically owned, has start-up capital equivalent to 10 times the income per capita, engages in general industrial or commercial activities and employs between 10 and 50 people one month after the commencement of operations, all of whom are domestic nationals. Starting a Business considers two types of local limited liability companies that are identical in all aspects, except that one company is owned by 5 married women and the other by 5 married men. The ranking of economies on the ease of starting a business is determined by sorting their scores for starting a business. These scores are the simple average of the scores for each of the component indicators.

The most recent round of data collection for the project was completed in May 2019. See the methodology for more information.

What the indicators measure

Procedures to legally start and formally operate a company (number)

Preregistration (for example, name verification or reservation, notarization)
Registration in the economy’s largest business city
Postregistration (for example, social security registration, company seal)
Obtaining approval from spouse to start a business or to leave the home to register the company
Obtaining any gender specific document for company registration and operation or national identification card

Time required to complete each procedure (calendar days)
Does not include time spent gathering information
Each procedure starts on a separate day (2 procedures cannot start on the same day)
Procedures fully completed online are recorded as ½ day
Procedure is considered completed once final document is received
No prior contact with officials

Cost required to complete each procedure (% of income per capita)
Official costs only, no bribes
No professional fees unless services required by law or commonly used in practice

Paid-in minimum capital (% of income per capita)
Funds deposited in a bank or with third party before registration or up to 3 months after incorporation

To make the data comparable across economies, several assumptions about the business and the procedures are used. It is assumed that any required information is readily available and that the entrepreneur will pay no bribes.

The business:

-Is a limited liability company (or its legal equivalent). If there is more than one type of limited liability company in the economy, the limited liability form most common among domestic firms is chosen. Information on the most common form is obtained from incorporation lawyers or the statistical office.

-Operates in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.

-Performs general industrial or commercial activities such as the production or sale to the public of goods or services. The business does not perform foreign trade activities and does not handle products subject to a special tax regime, for example, liquor or tobacco. It is not using heavily polluting production processes.

-Does not qualify for investment incentives or any special benefits.

-Is 100% domestically owned.

-Has five business owners, none of whom is a legal entity. One business owner holds 30% of the company shares, two owners have 20% of shares each, and two owners have 15% of shares each.

-Is managed by one local director.

-Has between 10 and 50 employees one month after the commencement of operations, all of them domestic nationals.

-Has start-up capital of 10 times income per capita.

-Has an estimated turnover of at least 100 times income per capita.

-Leases the commercial plant or offices and is not a proprietor of real estate.

-Has an annual lease for the office space equivalent to one income per capita.

-Is in an office space of approximately 929 square meters (10,000 square feet).

-Has a company deed that is 10 pages long.

The owners:

-Have reached the legal age of majority and are capable of making decisions as an adult. If there is no legal age of majority, they are assumed to be 30 years old.

-Are in good health and have no criminal record.

-Are married, the marriage is monogamous and registered with the authorities.

-Where the answer differs according to the legal system applicable to the woman or man in question (as may be the case in economies where there is legal plurality), the answer used will be the one that applies to the majority of the population.

Starting a Business – Israel

Figure – Starting a Business in Israel – Score

Figure – Starting a Business in Israel and comparator economies – Ranking and Score

DB 2020 Starting a Business Score

Note: The ranking of economies on the ease of starting a business is determined by sorting their scores for starting a business. These scores are the simple average of the scores for each of the component indicators.

Figure – Starting a Business in Israel – Procedure, Time and Cost

* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.

Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology). For details on the procedures reflected here, see the summary below.

Details – Starting a Business in Israel – Procedure, Time and Cost

1 Obtain company registration documents certified by an attorney

Agency : Attorney

The following company certification documents must be certified by an attorney:

Application to register the company.
Declaration by the initial director(s) of competence to serve.
Initial shareholders’ signatures on articles of association.

The company's initial Articles of Association must be signed by the initial shareholders and their signature needs to be authenticated by an attorney.

2 File with the registrar of companies, Ministry of Justice

Agency : Ministry of Justice

To register a company, the promoter must:

File the articles of association;
The directors must sign a declaration stating that they have the capacity to serve and their signatures must be authenticated by an attorney;
The shareholders must also sign a declaration stating that they have the capacity to hold shares in a company and their signatures must be authenticated by an attorney.

2 days NIS 2,176 (online process) or NIS 2,645 (paper process)

3 Register for taxes and VAT at Ministry of Finance, Income Tax Department and at the National Insurance Institute

Agency : Ministry of Finance

To register for company taxation, the promoter must file the company deed and identity certificate of registration. Upon registration at the Ministry of Finance, the company is automatically registered for social security at the National Insurance Institute.

At the same time, it is possible to register for VAT. To register for VAT, the promoter must file the certificate of incorporation, identity documents for all directors, a lease agreement, and other information. The VAT authority generally can ask for a bank account for VAT refund purposes (or for VAT payment). There are no fees to open the account, but bank commissions may vary according to the bank and bank account features.

Takes place simultaneously with previous procedure.

7 days no charge

Dealing with Construction Permits

This topic tracks the procedures, time and cost to build a warehouse—including obtaining necessary the licenses and permits, submitting all required notifications, requesting and receiving all necessary inspections and obtaining utility connections. In addition, the Dealing with Construction Permits indicator measures the building quality control index, evaluating the quality of building regulations, the strength of quality control and safety mechanisms, liability and insurance regimes, and professional certification requirements. The most recent round of data collection was completed in May 2019. See the methodology for more information

What the indicators measure

Procedures to legally build a warehouse (number)

Submitting all relevant documents and obtaining all necessary clearances, licenses, permits and certificates
Submitting all required notifications and receiving all necessary inspections
Obtaining utility connections for water and sewerage
Registering and selling the warehouse after its completion

Time required to complete each procedure (calendar days)

Does not include time spent gathering information
Each procedure starts on a separate day—though procedures that can be fully completed online are an exception to this rule
Procedure is considered completed once final document is received
No prior contact with officials

Cost required to complete each procedure (% of income per capita)
Official costs only, no bribes

Building quality control index (0-15)
Quality of building regulations (0-2)
Quality control before construction (0-1)
Quality control during construction (0-3)
Quality control after construction (0-3)
Liability and insurance regimes (0-2)
Professional certifications (0-4)

To make the data comparable across economies, several assumptions about the construction company, the warehouse project and the utility connections are used.

The construction company (BuildCo):

Is a limited liability company (or its legal equivalent) and operates in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.
Is 100% domestically and privately owned; has five owners, none of whom is a legal entity. Has a licensed architect and a licensed engineer, both registered with the local association of architects or engineers. BuildCo is not assumed to have any other employees who are technical or licensed experts, such as geological or topographical experts.
Owns the land on which the warehouse will be built and will sell the warehouse upon its completion.

The warehouse:
Will be used for general storage activities, such as storage of books or stationery.
Will have two stories, both above ground, with a total constructed area of approximately 1,300.6 square meters (14,000 square feet). Each floor will be 3 meters (9 feet, 10 inches) high and will be located on a land plot of approximately 929 square meters (10,000 square feet) that is 100% owned by BuildCo, and the warehouse is valued at 50 times income per capita.
Will have complete architectural and technical plans prepared by a licensed architect. If preparation of the plans requires such steps as obtaining further documentation or getting prior approvals from external agencies, these are counted as procedures.
Will take 30 weeks to construct (excluding all delays due to administrative and regulatory requirements).

The water and sewerage connections:
Will be 150 meters (492 feet) from the existing water source and sewer tap. If there is no water delivery infrastructure in the economy, a borehole will be dug. If there is no sewerage infrastructure, a septic tank in the smallest size available will be installed or built.
Will have an average water use of 662 liters (175 gallons) a day and an average wastewater flow of 568 liters (150 gallons) a day. Will have a peak water use of 1,325 liters (350 gallons) a day and a peak wastewater flow of 1,136 liters (300 gallons) a day.
Will have a constant level of water demand and wastewater flow throughout the year; will be 1 inch in diameter for the water connection and 4 inches in diameter for the sewerage connection.

Dealing with Construction Permits – Israel

Figure – Dealing with Construction Permits in Israel – Score

Figure – Dealing with Construction Permits in Israel and comparator economies – Ranking and Score

DB 2020 Dealing with Construction Permits Score

Note: The ranking of economies on the ease of dealing with construction permits is determined by sorting their scores for dealing with construction permits. These scores are the simple average of the scores for each of the component indicators.

Figure – Dealing with Construction Permits in Israel – Procedure, Time and Cost

* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.

Figure – Dealing with Construction Permits in Israel and comparator economies – Measure of Quality

Details – Dealing with Construction Permits in Israel – Procedure, Time and Cost

1 File a request for information regarding the land

Agency : Municipality

BuildCo should file a request for information regarding the land. An updated survey of the land, signed by an authorized surveyor, should be attached to the request. The survey should be marked by the local committee engineer and sent back to BuildCo, together with the requested information.

2 Obtain a survey map

BuildCo must hire an authorized surveyor who inspects the site, marks the plots and gives BuildCo the survey of the land. The authorized surveyor also obtains the land extract from the Land Registry on behalf of BuildCo. Since this procedure is actioned by the previous one, and it is done by the same organization, it can be simultaneous.

3 Obtain building permit from Local Committee

Agency : Local Committee

BuildCo must file an application for a building permit. The application should be signed by:

BuildCo
An authorized engineer
The planner of the frame of the building
The person in charge of frame construction
The person in charge of the audit

The documents obtained in the previous procedures should also be attached to the application, as should the building scheme and a schematic diagram of the construction area.

According to the Planning and Building Regulations Amendments (Request for Building Permit, Conditions and Fees) of 2014, the fee is ILS 32.72 per square meter. BuildCo must notify the regional Work Supervisor at the Local Committee and the person(s) in charge of the supervision.

4 Obtain marking report from authorized surveyor

Agency : Authorized Surveyor

Once the building permit is obtained, BuildCo will request a marking report from an authorized surveyor. This marking report is to reflect the footprint of the building on the land.

Details – Dealing with Construction Permits in Israel – Measure of Quality

Getting Electricity

This topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse. Additionally, the reliability of supply and transparency of tariffs index measures reliability of supply, transparency of tariffs and the price of electricity. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information.

What the indicators measure

Procedures to obtain an electricity connection (number)

Submitting all relevant documents and obtaining all necessary clearances and permits
Completing all required notifications and receiving all necessary inspections
Obtaining external installation works and possibly purchasing material for these works
Concluding any necessary supply contract and obtaining final supply

Time required to complete each procedure (calendar days)

Is at least 1 calendar day
Each procedure starts on a separate day
Does not include time spent gathering information
Reflects the time spent in practice, with little follow-up and no prior contact with officials

Cost required to complete each procedure (% of income per capita)

Official costs only, no bribes
Value added tax excluded

The reliability of supply and transparency of tariffs index (0-8)
Duration and frequency of power outages (0–3)
Tools to monitor power outages (0–1)
Tools to restore power supply (0–1)
Regulatory monitoring of utilities’ performance (0–1)
Financial deterrents limiting outages (0–1)
Transparency and accessibility of tariffs (0–1)

To make the data comparable across economies, several assumptions about the warehouse, the electricity connection and the monthly consumption are used.

The warehouse:

Is owned by a local entrepreneur and is used for storage of goods.
Is located in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.
Is located in an area where similar warehouses are typically located and is in an area with no physical constraints. For example, the property is not near a railway.
Is a new construction and is being connected to electricity for the first time.
Has two stories with a total surface area of approximately 1,300.6 square meters (14,000 square feet). The plot of land on which it is built is 929 square meters (10,000 square feet).

The electricity connection:

Is a permanent one with a three-phase, four-wire Y connection with a subscribed capacity of 140- kilo-volt-ampere (kVA) with a power factor of 1, when 1 kVA = 1 kilowatt (kW).
Has a length of 150 meters. The connection is to either the low- or medium-voltage distribution network and is either overhead or underground, whichever is more common in the area where the warehouse is located and requires works that involve the crossing of a 10-meter road (such as by excavation or overhead lines) but are all carried out on public land. There is no crossing of other owners’ private property because the warehouse has access to a road.
Does not require work to install the internal wiring of the warehouse. This has already been completed up to and including the customer’s service panel or switchboard and the meter base.

The monthly consumption:

It is assumed that the warehouse operates 30 days a month from 9:00 a.m. to 5:00 p.m. (8 hours a day), with equipment utilized at 80% of capacity on average and that there are no electricity cuts (assumed for simplicity reasons) and the monthly energy consumption is 26,880 kilowatt-hours (kWh); hourly consumption is 112 kWh.
If multiple electricity suppliers exist, the warehouse is served by the cheapest supplier.
Tariffs effective in January of the current year are used for calculation of the price of electricity for the warehouse. Although January has 31 days, for calculation purposes only 30 days are used.

Price of electricity (cents per kilowatt-hour)*

Price based on monthly bill for commercial warehouse in case study

*Note: Doing Business measures the price of electricity, but it is not included in the ease of doing business score nor in the ranking on the ease of getting electricity.

Getting Electricity – Israel

City Covered

Tel Aviv

Price of electricity (US cents per kWh) 11.8

Indicator

Israel

OECD high income

Best Regulatory Performance

Procedures (number)

4.4

3 (28 Economies)

Cost (% of income per capita)

13.3

61.0

0.0 (3 Economies)

Time (days) 102 74.8 18 (3 Economies)

Figure – Getting Electricity in Israel – Score

Reliability of supply and transparency of tariff index (0-8) 6 7.4 8 (26 Economies)

66.7

99.8

75.0

Procedures

63.5

Time

Cost

Reliability of supply and transparency of tariff index

Figure – Getting Electricity in Israel and comparator economies – Ranking and Score

DB 2020 Getting Electricity Score

0 100

98.8: Germany (Rank: 5)

96.9: United Kingdom (Rank: 8)

92.0: France (Rank: 17)

85.9: Regional Average (OECD high income)

82.2: United States (Rank: 64)

76.2: Israel (Rank: 83)

Note: The ranking of economies on the ease of getting electricity is determined by sorting their scores for getting electricity. These scores are the simple average of the scores for all the component indicators except the price of electricity.

Figure – Getting Electricity in Israel – Procedure, Time and Cost

100

Time (days) Cost (% of income per capita)

Cost (% of income per capita)

Time (days)

60 8

0 0

1 2 * 3 4 5

Procedures (number)

* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.

reflected here, see the summary below.

Figure – Getting Electricity in Israel and comparator economies – Measure of Quality

7.4

Index score

Israel France Germany United Kingdom

United States

OECD

high income

Details – Getting Electricity in Israel – Procedure, Time and Cost

Submit application to Israel Electric Corporation and await initial estimate

Agency : The Israel Electric Corporation Ltd.

The application for an electricity connection can be submitted by phone, by fax, by mail or by arriving to the Israel Electric Corporation offices. The application should include: the building permit, accurate information concerning the required power connection, the building specifications, the location of the building, the designation of the business and the date when the power is requested.

11 calendar days

ILS 0

After getting all the essential information from the customer concerning the connection, the Israel Electric Corporation will indicate the initial expected costs. Along with the response, IEC will attach

a bill for 10% of the initial estimate costs (“advance payment”).

No.

Procedures

Time to Complete

Associated Costs

2 Await completion of technical coordination of project by Israel Electric Corporation

Agency : The Israel Electric Corporation Ltd.

The customer should pay the advance payment in order to start the project planning. The payment can be done at the bank or at the utility. After the payment, the Israel Electric Corporation opens an order file and works on technical coordination.

After the technical coordination is completed a written agreement between the customer and the Israel Electric Corporation regarding the process of connection works, their schedule and costs is signed. It also specifies the responsibilities of the applicant and the utility and the final estimate.

At the completion of the technical coordination process, the IEC would send to the customer a bill for 70% of the final estimate.

30 calendar days ILS 0

3 Await and receive site inspection by Israel Electric Corporation

Agency : The Israel Electric Corporation Ltd.

An external inspection carried out by the Israel Electric Corporation is required during the technical coordination. Someone from the applicant's party has to be present for the inspection.

3 calendar days ILS 0

4 Await completion of external works by Israel Electric Corporation

Agency : The Israel Electric Corporation Ltd.

The customer should pay 70% of the final estimate (minus the “advance payment”) to begin the external works and 30% at their completion. The customer pays only for the connection fees which are determined by the Public Utility Authority for Electricity. All the additional works are at the Israel Electric Corporation expense.

Await and receive internal wiring inspection, meter installation and final connection

Agency : The Israel Electric Corporation Ltd.

An inspection of the internal wiring by the Israel Electric Corporation’s examiner is required. The licensed electrician should submit to the IEC the plans of the internal wiring. The electrician may request the inspection before the completion of the external connection works by the Israel Electric Corporation, so that the internal inspection would be conducted immediately after their completion. The electrician should be present during the inspection.

1 calendar day

ILS 0

If there is no problem with the internal wiring, the examiner will install the meter at the same day

and the final connection will be completed.

An underground connection is the only available option.

60 calendar days ILS 19,902.95

Takes place simultaneously with previous procedure.

Details – Getting Electricity in Israel – Measure of Quality

Answer

Reliability of supply and transparency of tariff index (0-8) 6

Total duration and frequency of outages per customer a year (0-3) 2

System average interruption duration index (SAIDI) 1.5

System average interruption frequency index (SAIFI) 2.0

What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 1.0

Does the distribution utility use automated tools to monitor outages? Yes

Mechanisms for monitoring outages (0-1) 1

Does the distribution utility use automated tools to restore service? Yes

Mechanisms for restoring service (0-1) 1

Does a regulator—that is, an entity separate from the utility—monitor the utility’s performance on reliability of supply? Yes

Regulatory monitoring (0-1) 1

Does the utility either pay compensation to customers or face fines by the regulator (or both) if outages exceed a certain cap? Yes

Financial deterrents aimed at limiting outages (0-1) 1

Are effective tariffs available online? Yes

Communication of tariffs and tariff changes (0-1) 0

Link to the website, if available online https://www.iec.co.il/EN/IR

Are customers notified of a change in tariff ahead of the billing cycle? No

/Documents/tariff_1.4.12. pdf

Note:

If the duration and frequency of outages is 100 or less, the economy is eligible to score on the Reliability of supply and transparency of tariff index. If the duration and frequency of outages is not available, or is over 100, the economy is not eligible to score on the index.

If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index.

Registering Property

This topic examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute. In addition, the topic also measures the quality of the land administration system in each economy. The quality of land administration index has five dimensions: reliability of infrastructure, transparency of information, geographic coverage, land dispute resolution, and equal access to property rights. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information.

What the indicators measure

Case study assumptions

Procedures to legally transfer title on immovable property (number)

Preregistration procedures (for example, checking for liens, notarizing sales agreement, paying property transfer taxes)
Registration procedures in the economy's largest business city.
Postregistration procedures (for example, filling title with municipality)

Time required to complete each procedure (calendar days)
Does not include time spent gathering information
Each procedure starts on a separate day – though procedures that can be fully completed online are an exception to this rule
Procedure is considered completed once final document is received
No prior contact with officials

Cost required to complete each procedure (% of property value)
Official costs only (such as administrative fees, duties and taxes).
Value Added Tax, Capital Gains Tax and illicit payments are excluded

Quality of land administration index (0-30)
Reliability of infrastructure index (0-8)
Transparency of information index (0–6)
Geographic coverage index (0–8)
Land dispute resolution index (0–8)
Equal access to property rights index (-2–0)

To make the data comparable across economies, several assumptions about the parties to the transaction, the property and the procedures are used.

The parties (buyer and seller):

Are limited liability companies (or the legal equivalent).
Are located in the periurban (that is, on the outskirts of the city but still within its official limits) area of the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.
Are 100% domestically and privately owned.
Perform general commercial activities.

The property (fully owned by the seller):
Has a value of 50 times income per capita, which equals the sale price.
Is fully owned by the seller.
Has no mortgages attached and has been under the same ownership for the past 10 years.
Is registered in the land registry or cadastre, or both, and is free of title disputes.
Is located in a periurban commercial zone (that is, on the outskirts of the city but still within its official limits), and no rezoning is required.
Consists of land and a building. The land area is 557.4 square meters (6,000 square feet). A two- story warehouse of 929 square meters (10,000 square feet) is located on the land. The warehouse is 10 years old, is in good condition, has no heating system and complies with all safety standards, building codes and legal requirements. The property, consisting of land and building, will be transferred in its entirety.
Will not be subject to renovations or additional construction following the purchase.
Has no trees, natural water sources, natural reserves or historical monuments of any kind.
Will not be used for special purposes, and no special permits, such as for residential use, industrial plants, waste storage or certain types of agricultural activities, are required.
Has no occupants, and no other party holds a legal interest in it.

Registering Property – Israel

Indicator	Israel	OECD high income	Best Regulatory Performance
Procedures (number)	6	4.7	1 (5 Economies)
Time (days)	37	23.6	1 (2 Economies)
Cost (% of property value)	7.2	4.2	0.0 (Saudi Arabia)
Quality of the land administration index (0-30)	22.5	23.2	None in 2018/19

Figure – Registering Property in Israel – Score

58.3

82.8

52.3

75.0

Procedures

Time

Cost

Quality of the land administration index

Figure – Registering Property in Israel and comparator economies – Ranking and Score

DB 2020 Registering Property Score

0 100

77.0: Regional Average (OECD high income)

76.9: United States (Rank: 39)

75.7: United Kingdom (Rank: 41)

67.1: Israel (Rank: 75)

66.6: Germany (Rank: 76)

63.3: France (Rank: 99)

Note: The ranking of economies on the ease of registering property is determined by sorting their scores for registering property. These scores are the simple average of the scores for each of the component indicators.

Figure – Registering Property in Israel – Procedure, Time and Cost

Time (days) Cost (% of property value)

Cost (% of property value)

Time (days)

20 4

15 3

10 2

5 1

0 0

1 * 2 3 * 4 5 6

Procedures (number)

* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.

Figure – Registering Property in Israel and comparator economies – Measure of Quality

22.5

24.0

26.0

23.0

23.2

17.6

Index score

Israel France Germany United Kingdom

United States

OECD

high income

Details – Registering Property in Israel – Procedure, Time and Cost

Obtain a land registration extract from the Land Registry Office

Agency : Land Registry office

The buyer obtains a land registration extract relating to the property from the regional land registry office. The buyer can verify that the property is registered in the name of the seller and that no other rights of any kind of third parties are registered.

It is possible to retrieve an extract online (costing approximately NIS 15). The extract is

electronically signed and constitutes a binding legal document in every respect.

Less than one day,

online

ILS 15

No.

Procedures

Time to Complete

Associated Costs

2 Check the Municipality record relating to the property

Agency : Municipality

File a report on the transaction with the Municipality and obtain tax clearance from the Municipality

Agency : Tax Department of the Municipality

The Municipal certificate for transfer of title confirms that all the municipal taxes relating to the use of the property were paid and that there is no Municipality Appreciation Levy liability or that such liability was discharged.

25 days

ILS 111.9

The Municipality Appreciation Levy (Hetel Hashbacha) is paid on the appreciation in the value of the property due to change of the permitted use of the property ("the Appreciation").

Hetel Hashbacha is imposed

When a city building plan is approved;
When the city provides relief construction rights;
In case of resulting from the resolution of the original zoning conforming use of the property.

Hetel Hashbacha shall be paid to the municipality only if there has been a change of zoning for a neighbourhood which causes the value of the property to rise.

The assumptions in this case study do not indicate that such a change was made, so there is no Municipality Appreciation Levy liability. The rate of the Municipal Appreciation Levy payable is 50%

of the Appreciation.

The Municipality records show the right to build on the land of the property, and can indicate whether the building was constructed according to the applicable building permits, whether there are any legal proceedings relating to the construction and use of the building.

Less than one day, online

no charge

4 File a report on the transaction with the tax authority and obtain tax clearance

Agency : Tax Authority

After the sale agreement has been prepared and signed by the parties, they have 30 days to file a report on the transaction based on self-assessment with the tax authorities. It should include all details of the transaction including the tax amount and calculation. Usually the self-assessment is prepared by the company's lawyers and accountants and the report on the transaction is filed by the lawyer that handles the transaction.

After filing a report on the transaction with the tax authority, a voucher will be sent by the tax authority.

The following taxes, based on self-assessments, must be paid:

Capital Gains Tax (Mas Shevach) – paid by the seller on the difference between the purchase price and the original purchase price paid by the buyer in the current transaction. According to the Amendment No. 70 to the Land Taxation (Capital Gain and Purchase) Act 2011, starting on March 31, 2011 the purchaser makes an advance payment on account of CGT at the rate 7.5%-15% of the value of the transaction (the full amount of CGT is set off against the consideration of property and is regarded as if it was paid to the seller). The tax is up to 25 % for companies (Land Betterment Tax);
Purchase Tax (Mas Rechisha)- paid by the purchaser is a flat rate of 6% for a commercial property. Purchase tax is paid within 60 days after filing the self-assessment report;
Betterment Tax (Hetel Hashbacha) – only if there has been a change of zoning for a neighborhood which causes the value of the property to rise.

21 days ILS 448,381.15; (6% of

property tax)

Lawyer drafts the sale purchase agreement

Agency : Lawyer

The contract agreement is prepared by the parties' lawyers. Lawyer fees for a commercial warehouse will be in the range of 1.0-2.0% of property value.

4 days

ILS 85,939.72;

(0.8%-1.5% of property value)

A sale deed is also prepared and signed by the parties.

Apply for registration at the regional Land Registry Office

Agency : Land Registry office

When all the certificates are obtained, the sale deed is signed by both parties.

When the registration is made in the Land Registry, the signature of the parties on the deeds and other certain details relating thereto are required to be authenticated by a lawyer or the Land Registrar, after the nature of the transaction and the consequences thereof were explained to the parties and it was clear that the parties willingly signed it.

The transaction is subject to a 17% VAT, paid on the 15th day of the month following the date of receipt of payment

The documentation shall include:
- Transfer deed
- Tax Authority certificates confirming tax payments (obtained in Procedure 4)
- Municipal clearance certificate (obtained in Procedure 3)
- Certificate of incorporation of the parties
- Minutes of the companies’ board of directors with resolution to execute the transaction. (If a power of attorney was executed by the company and authorized by a notary that the subscriber is empowered to execute on behalf of the company- there is no need to attach the minutes).
- Counsel’s or accountant’s certificate regarding both companies including the following details: existence of the company; the company is authorized to execute the transaction according to its articles of association; and the participants at the board of directors meeting as detailed in the above mentioned minutes are the directors of the company and empowered to act on behalf of the company and to sign the deed of transaction.
days ILS 38

Takes place simultaneously with previous procedure.

Details – Registering Property in Israel – Measure of Quality
	Answer	Score
Quality of the land administration index (0-30)		22.5
Reliability of infrastructure index (0-8)		8.0
Type of land registration system in the economy:	Title Registration System
What is the institution in charge of immovable property registration?	The Land Registration and Settlement of Rights Department
In what format are past and newly issued land records kept at the immovable property registry of the largest business city of the economy —in a paper format or in a computerized format (scanned or fully digital)?	Computer/Fully digital	2.0
Is there a comprehensive and functional electronic database for checking for encumbrances (liens, mortgages, restrictions and the like)?	Yes	1.0
Institution in charge of the plans showing legal boundaries in the largest business city:	Survey of Israel
In what format are past and newly issued cadastral plans kept at the mapping agency of the largest business city of the economy—in a paper format or in a computerized format (scanned or fully digital)?	Computer/Fully digital	2.0
Is there an electronic database for recording boundaries, checking plans and providing cadastral information (geographic information system)?	Yes	1.0
Is the information recorded by the immovable property registration agency and the cadastral or mapping agency kept in a single database, in different but linked databases or in separate databases?	Different databases but linked	1.0
Do the immovable property registration agency and cadastral or mapping agency use the same identification number for properties?	Yes	1.0
Transparency of information index (0–6)		4.5
Who is able to obtain information on land ownership at the agency in charge of immovable property registration in the largest business city?	Anyone who pays the official fee	1.0
Is the list of documents that are required to complete any type of property transaction made publicly available– and if so, how?	Yes, online	0.5
Link for online access:	https://www.gov.il/he/ service/bill_of_sale
Is the applicable fee schedule for any type of property transaction at the agency in charge of immovable property registration in the largest business city made publicly available–and if so, how?	Yes, online	0.5
Link for online access:	http://www.justice.gov .il/Units/LandRegistra tion/agrot/Pages/Rish umFees.aspx
Does the agency in charge of immovable property registration agency formally commit to deliver a legally binding document that proves property ownership within a specific timeframe –and if so, how does it communicate the service standard?	Yes, online	0.5
Link for online access:	https://www.gov.il/he/ service/bill_of_sale https://www.gov.il/he/ service/land_registrati on_extract
Is there a speciﬁc and independent mechanism for filing complaints about a problem that occurred at the agency in charge of immovable property registration?	No	0.0
Contact information:
Are there publicly available official statistics tracking the number of transactions at the immovable property registration agency?	Yes	0.5
Number of property transfers in the largest business city in 2018:	10049.0
Who is able to consult maps of land plots in the largest business city?	Freely accessible by anyone	0.5

Is the applicable fee schedule for accessing maps of land plots made publicly available—and if so, how?	No cost	0.5
Link for online access:
Does the cadastral/mapping agency formally specifies the timeframe to deliver an updated cadastral plan—and if so, how does it communicate the service standard?	Yes, online	0.5
Link for online access:	http://mapi.gov.il/new sandupdates/docume nts/amana2017.pdf
Is there a speciﬁc and independent mechanism for filing complaints about a problem that occurred at the cadastral or mapping agency?	No	0.0
Contact information:
Geographic coverage index (0–8)		4.0
Are all privately held land plots in the largest business city formally registered at the immovable property registry?	Yes	2.0
Are all privately held land plots in the economy formally registered at the immovable property registry?	No	0.0
Are all privately held land plots in the largest business city mapped?	Yes	2.0
Are all privately held land plots in the economy mapped?	No	0.0
Land dispute resolution index (0–8)		6.0
Does the law require that all property sale transactions be registered at the immovable property registry to make them opposable to third parties?	Yes	1.5
Legal basis:	Articles 7-10, Land Law 5729-1969
Is the system of immovable property registration subject to a state or private guarantee?	Yes	0.5
Type of guarantee:	State guarantee
Legal basis:	Articles 9-10, Land Law 1969
Is there a is a speciﬁc, out-of-court compensation mechanism to cover for losses incurred by parties who engaged in good faith in a property transaction based on erroneous information certified by the immovable property registry?	No	0.0
Legal basis:
Does the legal system require a control of legality of the documents necessary for a property transaction (e.g., checking the compliance of contracts with requirements of the law)?	Yes	0.5
If yes, who is responsible for checking the legality of the documents?	Registrar;
Does the legal system require verification of the identity of the parties to a property transaction?	Yes	0.5
If yes, who is responsible for verifying the identity of the parties?	Registrar; Notary; Lawyer;
Is there a national database to verify the accuracy of government issued identity documents?	Yes	1.0
What is the Court of first instance in charge of a case involving a standard land dispute between two local businesses over tenure rights for a property worth 50 times gross national income (GNI) per capita and located in the largest business city?	Tel Aviv Magistrate Court
How long does it take on average to obtain a decision from the first-instance court for such a case (without appeal)?	Between 1 and 2 years	2.0
Are there publicly available statistics on the number of land disputes at the economy level in the ﬁrst instance court?	No	0.0
Number of land disputes in the economy in 2018:
Equal access to property rights index (-2–0)		0.0
Do unmarried men and unmarried women have equal ownership rights to property?	Yes
Do married men and married women have equal ownership rights to property?	Yes	0.0

Getting Credit

This topic explores two sets of issues—the strength of credit reporting systems and the effectiveness of collateral and bankruptcy laws in facilitating lending. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information.

What the indicators measure

Case study assumptions

Strength of legal rights index (0–12)

Rights of borrowers and lenders through collateral laws (0-10)
Protection of secured creditors’ rights through bankruptcy laws (0-2)

Depth of credit information index (0–8)
Scope and accessibility of credit information distributed by credit bureaus and credit registries (0-8)

Credit bureau coverage (% of adults)
Number of individuals and firms listed in largest credit bureau as a percentage of adult population

Credit registry coverage (% of adults)
Number of individuals and firms listed in credit registry as a percentage of adult population

Doing Business assesses the sharing of credit information and the legal rights of borrowers and lenders with respect to secured transactions through 2 sets of indicators. The depth of credit information index measures rules and practices affecting the coverage, scope and accessibility of credit information available through a credit registry or a credit bureau. The strength of legal rights index measures the degree to which collateral and bankruptcy laws protect the rights of borrowers and lenders and thus facilitate lending. For each economy it is first determined whether a unitary secured transactions system exists. Then two case scenarios, case A and case B, are used to determine how a nonpossessory security interest is created, publicized and enforced according to the law. Special emphasis is given to how the collateral registry operates (if registration of security interests is possible). The case scenarios involve a secured borrower, company ABC, and a secured lender, BizBank.

In some economies the legal framework for secured transactions will allow only case A or case B (not both) to apply. Both cases examine the same set of legal provisions relating to the use of movable collateral.

Several assumptions about the secured borrower (ABC) and lender (BizBank) are used:

ABC is a domestic limited liability company (or its legal equivalent).
ABC has up to 50 employees.
ABC has its headquarters and only base of operations in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.
Both ABC and BizBank are 100% domestically owned.

The case scenarios also involve assumptions. In case A, as collateral for the loan, ABC grants BizBank a nonpossessory security interest in one category of movable assets, for example, its machinery or its inventory. ABC wants to keep both possession and ownership of the collateral. In economies where the law does not allow nonpossessory security interests in movable property, ABC and BizBank use a fiduciary transfer-of-title arrangement (or a similar substitute for nonpossessory security interests).

In case B, ABC grants BizBank a business charge, enterprise charge, floating charge or any charge that gives BizBank a security interest over ABC’s combined movable assets (or as much of ABC’s movable assets as possible). ABC keeps ownership and possession of the assets.

Getting Credit – Israel

Indicator	Israel	OECD high income	Best Regulatory Performance
Strength of legal rights index (0-12)	6	6.1	12 (5 Economies)
Depth of credit information index (0-8)	8	6.8	8 (53 Economies)
Credit registry coverage (% of adults)	0.0	24.4	100.0 (2 Economies)
Credit bureau coverage (% of adults)	100.0	66.7	100.0 (14 Economies)

Figure – Getting Credit in Israel – Score

70.0

Score – Getting Credit

Figure – Getting Credit in Israel and comparator economies – Ranking and Score

DB 2020 Getting Credit Score

0 100

95.0: United States (Rank: 4)

75.0: United Kingdom (Rank: 37)

70.0: Germany (Rank: 48)

70.0: Israel (Rank: 48)

64.3: Regional Average (OECD high income) 50.0: France (Rank: 104)

Note: The ranking of economies on the ease of getting credit is determined by sorting their scores for getting credit. These scores are the sum of the scores for the strength of legal rights index and the depth of credit information index.

Figure – Legal Rights in Israel and comparator economies

6.1

Index Score

Israel France Germany United Kingdom

United States

OECD

high income

Details – Legal Rights in Israel

Strength of legal rights index (0-12) 6

Does the law allow businesses to grant a non possessory security right in a single category of movable assets, without requiring a specific description

of collateral?

Yes

Does an integrated or unified legal framework for secured transactions that extends to the creation, publicity and enforcement of functional equivalents No to security interests in movable assets exist in the economy?

May a security right extend to future or after-acquired assets, and does it extend automatically to the products, proceeds and replacements of the

original assets?

Yes

Does the law allow businesses to grant a non possessory security right in substantially all of its assets, without requiring a specific description of collateral?

Yes

Is a collateral registry in operation for both incorporated and non-incorporated entities, that is unified geographically and by asset type, with an

electronic database indexed by debtor's name?

Is a general description of debts and obligations permitted in collateral agreements; can all types of debts and obligations be secured between parties; and can the collateral agreement include a maximum amount for which the assets are encumbered?

Yes

Does a notice-based collateral registry exist in which all functional equivalents can be registered? No

Does a modern collateral registry exist in which registrations, amendments, cancellations and searches can be performed online by any interested third No party?

Are secured creditors paid first (i.e. before tax claims and employee claims) when a debtor defaults outside an insolvency procedure? Yes

Are secured creditors paid first (i.e. before tax claims and employee claims) when a business is liquidated? Yes

Does the law allow parties to agree on out of court enforcement at the time a security interest is created? Does the law allow the secured creditor to sell No the collateral through public auction or private tender, as well as, for the secured creditor to keep the asset in satisfaction of the debt?

Are secured creditors subject to an automatic stay on enforcement when a debtor enters a court-supervised reorganization procedure? Does the law No protect secured creditors’ rights by providing clear grounds for relief from the stay and sets a time limit for it?

Figure – Credit Information in Israel and comparator economies

6.8

Index Score

Israel France Germany United Kingdom

United States

OECD

high income

Details – Credit Information in Israel

Depth of credit information index (0-8)

Credit bureau

Credit registry

Score

Are data on both firms and individuals distributed?

Yes

Are data from retailers or utility companies – in addition to data from banks and

financial institutions – distributed?

Yes

Are both positive and negative credit data distributed? Yes No 1

Are data on loan amounts below 1% of income per capita distributed?

Yes

Are at least 2 years of historical data distributed? (Credit bureaus and registries that distribute more than 10 years of negative data or erase data on defaults as soon as they are repaid obtain a score of 0 for this component.)

Yes No 1

By law, do borrowers have the right to access their data in the credit bureau or credit registry?

Yes No 1

Can banks and financial institutions access borrowers’ credit information online (for example, through an online platform, a system-to-system connection or both)?

Yes No 1

Total Score ("yes" to either public bureau or private registry)

8

Are bureau or registry credit scores offered as a value-added service to help banks and financial institutions assess the creditworthiness of borrowers?

Yes No 1

Note: An economy receives a score of 1 if there is a "yes" to either bureau or registry. If the credit bureau or registry is not operational or covers less than 5% of the adult population, the total score on the depth of credit information index is 0.

Coverage	Credit bureau	Credit registry
Number of individuals	5,500,000	0
Number of firms	700,000	0
Total	6,200,000	0
Percentage of adult population	100.0	0.0

Protecting Minority Investors

This topic measures the strength of minority shareholder protections against misuse of corporate assets by directors for their personal gain as well as shareholder rights, governance safeguards and corporate transparency requirements that reduce the risk of abuse. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information.

What the indicators measure

Case study assumptions

Extent of disclosure index (0–10): Disclosure, review, and approval requirements for related-party transactions
Extent of director liability index (0–10): Ability of minority shareholders to sue and hold interested directors liable for prejudicial related-party transactions; Available legal remedies (damages, disgorgement of profits, disqualification

from managerial position(s) for one year or more, rescission of the transaction)
Ease of shareholder suits index (0–10): Access to internal corporate documents; Evidence obtainable during trial and allocation of legal expenses
Extent of conflict of interest regulation index (0-30): Sum of the extent of disclosure, extent of director liability and ease of shareholder suits indices
Extent of shareholder rights index (0-6): Shareholders’ rights and role in major corporate decisions
Extent of ownership and control index (0-7): Governance safeguards protecting shareholders from undue board control and entrenchment
Extent of corporate transparency index (0-7): Corporate transparency on ownership stakes, compensation, audits and financial prospects
Extent of shareholder governance index (0–20): Sum of the extent of shareholders rights, extent of ownership and control and extent of corporate transparency indices
Strength of minority investor protection index (0–50): Sum of the extent of conflict of interest regulation and extent of shareholder governance indices

To make the data comparable across economies, a case study uses several assumptions about the business and the transaction.

The business (Buyer):

Is a publicly traded corporation listed on the economy’s most important stock exchange.
Has a board of directors and a chief executive officer (CEO) who may legally act on behalf of Buyer where permitted, even if this is not speciﬁcally required by law.
Has a supervisory board in economies with a two-tier board system on which Mr. James appointed 60% of the shareholder-elected members.
Has not adopted bylaws or articles of association that go beyond the minimum requirements. Does not follow codes, principles, recommendations or guidelines that are not mandatory.
Is a manufacturing company with its own distribution network.

The transaction involves the following details:
Mr. James owns 60% of Buyer, sits on Buyer’s board of directors and elected two directors to Buyer’s ﬁve-member board.
Mr. James also owns 90% of Seller, a company that operates a chain of retail hardware stores. Seller recently closed a large number of its stores.
Mr. James proposes that Buyer purchase Seller’s unused ﬂeet of trucks to expand Buyer’s distribution of its food products, a proposal to which Buyer agrees. The price is equal to 10% of Buyer’s assets and is higher than the market value.
The proposed transaction is part of the company’s principal activity and is not outside the authority of the company.
Buyer enters into the transaction. All required approvals are obtained, and all required disclosures made—that is, the transaction was not entered into fraudulently.
The transaction causes damages to Buyer. Shareholders sue Mr. James and the executives and directors that approved the transaction.

Stock exchange information

Stock exchange

Tel Aviv Stock Exchange

Protecting Minority Investors – Israel

Listed firms with equity securities

604

Stock exchange URL http://www.tase.co.il

Indicator

Israel

OECD high income

Best Regulatory Performance

Extent of disclosure index (0-10)

7.0

6.5

10 (13 Economies)

City Covered Tel Aviv

Ease of shareholder suits index (0-10)

9.0

7.3

10 (Djibouti)

Extent of director liability index (0-10) 9.0 5.3 10 (3 Economies)

Extent of ownership and control index (0-7)

4.0

4.5

7 (9 Economies)

Extent of shareholder rights index (0-6) 4.0 4.7 6 (19 Economies)

Figure – Protecting Minority in Israel – Score

78.0

Extent of corporate transparency index (0-7) 6.0 5.7 7 (13 Economies)

Score – Protecting Minority Investors

Figure – Protecting Minority Investors in Israel and comparator economies – Ranking and Score

DB 2020 Protecting Minority Investors Score

0 100

84.0: United Kingdom (Rank: 7)

78.0: Israel (Rank: 18)

71.6: United States (Rank: 36)

68.2: Regional Average (OECD high income) 68.0: France (Rank: 45)

62.0: Germany (Rank: 61)

Note: The ranking of economies on the strength of minority investor protections is determined by sorting their scores for protecting minority investors. These scores are the simple average of the scores for the extent of conﬂict of interest regulation index and the extent of shareholder governance index.

Figure – Protecting Minority Investors in Israel and comparator economies – Measure of Quality

Israel

France

Germany

United Kingdom

United States

OECD high income

5.6

6.6

4.3

4.5

7.4

0 5 10 15 20 25 30 35 40 45

Sub-Indicator Score

Extent of corporate transparency index (0-7) Extent of director liability index (0-10) Extent of disclosure index (0-10) Extent of ownership and control index (0-7) Extent of shareholder rights index (0-6) Ease of shareholder suits index (0-10)

Details – Protecting Minority Investors in Israel – Measure of Quality
	Answer	Score
Extent of conflict of interest regulation index (0-30)
Extent of disclosure index (0-10)		7.0
Whose decision is sufficient to approve the Buyer-Seller transaction? (0-3)	Shareholders or board of directors including interested parties	1.0
Must an external body review the terms of the transaction before it takes place? (0-1)	No	0.0
Must Mr. James disclose his conflict of interest to the board of directors? (0-2)	Full disclosure of all material facts	2.0
Must Buyer disclose the transaction in periodic filings (e.g. annual reports)? (0-2)	Disclosure on the transaction and on the conflict of interest	2.0
Must Buyer immediately disclose the transaction to the public? (0-2)	Disclosure on the transaction and on the conflict of interest	2.0
Extent of director liability index (0-10)		9.0
Can shareholders representing 10% of Buyer's share capital sue for the damage the transaction caused to Buyer? (0-1)	Yes	1.0
Can shareholders hold Mr. James liable for the damage the transaction caused to Buyer? (0-2)	Liable if unfair or prejudicial	2.0
Can shareholders hold the other directors liable for the damage the transaction caused to Buyer? (0-2)	Liable if negligent	1.0
Must Mr. James pay damages for the harm caused to Buyer upon a successful claim by shareholders? (0-1)	Yes	1.0
Must Mr. James repay profits made from the transaction upon a successful claim by shareholders? (0-1)	Yes	1.0
Is Mr. James disqualified upon a successful claim by shareholders? (0-1)	Yes	1.0
Can a court void the transaction upon a successful claim by shareholders? (0-2)	Voidable if unfair or prejudicial	2.0
Ease of shareholder suits index (0-10)		9.0
Before suing, can shareholders representing 10% of Buyer's share capital inspect the transaction documents? (0-1)	Yes	1.0
Can the plaintiff obtain any documents from the defendant and witnesses at trial? (0-3)	Any relevant document	3.0
Can the plaintiff request categories of documents from the defendant without identifying specific ones? (0-1)	Yes	1.0
Can the plaintiff directly question the defendant and witnesses at trial? (0-2)	Yes	2.0
Is the level of proof required for civil suits lower than that of criminal cases? (0-1)	Yes	1.0
Can shareholder plaintiffs recover their legal expenses from the company? (0-2)	Yes if successful	1.0
Extent of shareholder governance index (0-20)
Extent of shareholder rights index (0-6)		4.0
Does the sale of 51% of Buyer's assets require shareholder approval?	Yes	1.0
Can shareholders representing 10% of Buyer's share capital call for a meeting of shareholders?	Yes	1.0
Must Buyer obtain its shareholders’ approval every time it issues new shares?	No	0.0
Do shareholders automatically receive preemption rights every time Buyer issues new shares?	No	0.0
Do shareholders elect and dismiss the external auditor?	Yes	1.0
Are changes to the rights of a class of shares only possible if the holders of the affected shares approve?	Yes	1.0
Extent of ownership and control index (0-7)		4.0

Is it forbidden to appoint the same individual as CEO and chairperson of the board of directors?	No	0.0
Must the board of directors include independent and nonexecutive board members?	Yes	1.0
Can shareholders remove members of the board of directors without cause before the end of their term?	Yes	1.0
Must the board of directors include a separate audit committee exclusively comprising board members?	Yes	1.0
Must a potential acquirer make a tender offer to all shareholders upon acquiring 50% of Buyer?	Yes	1.0
Must Buyer pay declared dividends within a maximum period set by law?	No	0.0
Is a subsidiary prohibited from acquiring shares issued by its parent company?	No	0.0
Extent of corporate transparency index (0-7)		6.0
Must Buyer disclose direct and indirect beneficial ownership stakes representing 5%?	Yes	1.0
Must Buyer disclose information about board members’ primary employment and directorships in other companies?	Yes	1.0
Must Buyer disclose the compensation of individual managers?	Yes	1.0
Must a detailed notice of general meeting be sent 21 days before the meeting?	No	0.0
Can shareholders representing 5% of Buyer’s share capital put items on the general meeting agenda?	Yes	1.0
Must Buyer's annual financial statements be audited by an external auditor?	Yes	1.0
Must Buyer disclose its audit reports to the public?	Yes	1.0

Paying Taxes

This topic records the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year, as well as the administrative burden of paying taxes and contributions and complying with postfiling procedures (VAT refund and tax audit). The most recent round of data collection for the project was completed in May 2019 covering for the Paying Taxes indicator calendar year 2018 (January 1, 2018 – December 31, 2018). See the methodology for more information.

What the indicators measure

Case study assumptions

Tax payments for a manufacturing company in 2018 (number per year adjusted for electronic and joint filing and payment)

Total number of taxes and contributions paid or withheld, including consumption taxes (value added tax, sales tax or goods and service tax)
Method and frequency of filing and payment

Time required to comply with 3 major taxes (hours per year)
Collecting information, computing tax payable
Preparing separate tax accounting books, if required
Completing tax return, filing with agencies
Arranging payment or withholding

Total tax and contribution rate (% of commercial profits)
Profit or corporate income tax
Social contributions, labor taxes paid by employer
Property and property transfer taxes
Dividend, capital gains, financial transactions taxes
Waste collection, vehicle, road and other taxes

Postfiling Index
Time to comply with VAT refund (hours)
Time to obtain VAT refund (weeks)
Time to comply with a corporate income tax correction (hours)
Time to complete a corporate income tax correction (weeks)

Using a case scenario, Doing Business records taxes and mandatory contributions a medium size company must pay in a year, and measures the administrative burden of paying taxes, contributions and dealing with postfiling processes. Information is also compiled on frequency of filing and payments, time taken to comply with tax laws, time taken to comply with the requirements of postfiling processes and time waiting.

To make data comparable across economies, several assumptions are used:

TaxpayerCo is a medium-size business that started operations on January 1, 2017. It produces ceramic flowerpots and sells them at retail. All taxes and contributions recorded are paid in the second year of operation (calendar year 2018). Taxes and mandatory contributions are measured at all levels of government.

The VAT refund process:
In June 2018, TaxpayerCo. makes a large capital purchase: the value of the machine is 65 times income per capita of the economy. Sales are equally spread per month (1,050 times income per capita divided by 12) and cost of goods sold are equally expensed per month (875 times income per capita divided by 12). The machinery seller is registered for VAT and excess input VAT incurred in June will be fully recovered after four consecutive months if the VAT rate is the same for inputs, sales and the machine and the tax reporting period is every month. Input VAT will exceed Output VAT in June 2018.

The corporate income tax audit process:
An error in calculation of income tax liability (for example, use of incorrect tax depreciation rates, or incorrectly treating an expense as tax deductible) leads to an incorrect income tax return and a corporate income tax underpayment. TaxpayerCo. discovered the error and voluntarily notified the tax authority. The value of the underpaid income tax liability is 5% of the corporate income tax liability due. TaxpayerCo. submits corrected information after the deadline for submitting the annual tax return, but within the tax assessment period.

Paying Taxes – Israel

Indicator	Israel	OECD high income	Best Regulatory Performance
Payments (number per year)	6	10.3	3 (2 Economies)
Time (hours per year)	234	158.8	49 (3 Economies)
Total tax and contribution rate (% of profit)	25.3	39.9	26.1 (33 Economies)
Postfiling index (0-100)	92.0	86.7	None in 2018/19

Figure – Paying Taxes in Israel – Score

95.0

71.4

100.0

92.0

Payments

Time

Total tax and contribution rate

Postfiling index

Figure – Paying Taxes in Israel and comparator economies – Ranking and Score

DB 2020 Paying Taxes Score

0 100

89.6: Israel (Rank: 13)

86.8: United States (Rank: 25)

86.2: United Kingdom (Rank: 27)

84.3: Regional Average (OECD high income)

82.2: Germany (Rank: 46)

79.2: France (Rank: 61)

Note: The ranking of economies on the ease of paying taxes is determined by sorting their scores for paying taxes. These scores are the simple average of the scores for each of the component indicators, with a threshold and a nonlinear transformation applied to one of the component indicators, the total tax and contribution rate. The threshold is defined as the total tax and contribution rate at the 15th percentile of the overall distribution for all years included in the analysis up to and including Doing Business 2015, which is 26.1%. All economies with a total tax and contribution rate below this threshold receive the same score as the economy at the threshold.

Figure – Paying Taxes in Israel and comparator economies – Measure of Quality

92.0

92.4

97.7

94.0

86.7

71.0

120

Index score

100

Israel France Germany United Kingdom

United States

OECD

high income

Details – Paying	Taxes in Israel
Tax or mandatory contribution	Payments (number)	Notes on Payments	Time (hours)	Statutory tax rate	Tax base	Total tax and contribution rate (% of profit)	Notes on TTCR
Corporate	1.0		110.0	23%	taxable profits	17.78
income tax
Employer paid –	1.0	online	60.0	3.45%-7.5%	gross salaries	5.78
Social security
contributions
Municipal tax	1.0			various rates	property area	1.52
Capital gains tax	1.0			23%	capital gain	0.27
Value added tax	1.0	online	64.0	17%	value added	0.00
(VAT)
Fuel tax	1.0			NIS 2.8940467	per liter	0.00	small amount
Employee paid –	0.0	jointly		various rates	gross salaries	0.00	not included
Social security
contributions
Totals	6		234			25.3

Details – Paying Taxes in Israel – Tax by Type
Taxes by type	Answer
Profit tax (% of profit)	18.0
Labor tax and contributions (% of profit)	5.8
Other taxes (% of profit)	1.5

Details – Paying Taxes in Israel – Measure of Quality
	Answer	Score
Postfiling index (0-100)		92.0
VAT refunds
Does VAT exist?	Yes
Does a VAT refund process exist per the case study?	Yes
Restrictions on VAT refund process	none
Percentage of cases exposed to a VAT audit (%)	50% – 74%
Is there a mandatory carry forward period?	No
Time to comply with VAT refund (hours)	4.0	92.0
Time to obtain VAT refund (weeks)	7.0	91.8
Corporate income tax audits
Does corporate income tax exist?	Yes
Percentage of cases exposed to a corporate income tax audit (%)	0% – 24%
Time to comply with a corporate income tax correction (hours)	10.0	84.4
Time to complete a corporate income tax correction (weeks)	No tax audit per case study scenario	100

Notes: Names of taxes have been standardized. For instance income tax, profit tax, tax on company's income are all named corporate income tax in this table. The hours for VAT include all the VAT and sales taxes applicable.

The hours for Social Security include all the hours for labor taxes and mandatory contributions in general.

The postfiling index is the average of the scores on time to comply with VAT refund, time to obtain a VAT refund, time to comply with a corporate income tax correction and time to complete a corporate income tax correction.

N/A = Not applicable.

Trading across Borders

Doing Business records the time and cost associated with the logistical process of exporting and importing goods. Doing Business measures the time and cost (excluding tariffs) associated with three sets of procedures—documentary compliance, border compliance and domestic transport—within the overall process of exporting or importing a shipment of goods. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information.

What the indicators measure

Case study assumptions

Documentary compliance

Obtaining, preparing and submitting documents during transport, clearance, inspections and port or border handling in origin economy
Obtaining, preparing and submitting documents required by destination economy and any transit economies
Covers all documents required by law and in practice, including electronic submissions of information

Border compliance
Customs clearance and inspections
Inspections by other agencies (if applied to more than 20% of shipments)
Handling and inspections that take place at the economy’s port or border

Domestic transport
Loading or unloading of the shipment at the warehouse or port/border
Transport between warehouse and port/border
Traffic delays and road police checks while shipment is en route

To make the data comparable across economies, a few assumptions are made about the traded goods and the transactions:

Time: Time is measured in hours, and 1 day is 24 hours (for example, 22 days are recorded as 22×24=528 hours). If customs clearance takes 7.5 hours, the data are recorded as is. Alternatively, suppose documents are submitted to a customs agency at 8:00a.m., are processed overnight and can be picked up at 8:00a.m. the next day. The time for customs clearance would be recorded as 24 hours because the actual procedure took 24 hours.

Cost: Insurance cost and informal payments for which no receipt is issued are excluded from the costs recorded. Costs are reported in U.S. dollars. Contributors are asked to convert local currency into U.S. dollars based on the exchange rate prevailing on the day they answer the questionnaire. Contributors are private sector experts in international trade logistics and are informed about exchange rates.

Assumptions of the case study:

For all 190 economies covered by Doing Business, it is assumed a shipment is in a warehouse in the largest business city of the exporting economy and travels to a warehouse in the largest business city of the importing economy.
It is assumed each economy imports 15 metric tons of containerized auto parts (HS 8708) from its natural import partner—the economy from which it imports the largest value (price times quantity) of auto parts. It is assumed each economy exports the product of its comparative advantage (defined by the largest export value) to its natural export partner—the economy that is the largest purchaser of this product. Shipment value is assumed to be $50,000.
The mode of transport is the one most widely used for the chosen export or import product and the trading partner, as is the seaport or land border crossing.
All electronic information submissions requested by any government agency in connection with the shipment are considered to be documents obtained, prepared and submitted during the export or import process.
A port or border is a place (seaport or land border crossing) where merchandise can enter or leave an economy.
Relevant government agencies include customs, port authorities, road police, border guards, standardization agencies, ministries or departments of agriculture or industry, national security agencies and any other government authorities.

Trading across Borders – Israel

Indicator	Israel	OECD high income	Best Regulatory Performance
Time to export: Border compliance (hours)	36	12.7	1 (19 Economies)
Cost to export: Border compliance (USD)	150	136.8	0 (19 Economies)
Time to export: Documentary compliance (hours)	10	2.3	1 (26 Economies)
Cost to export: Documentary compliance (USD)	60	33.4	0 (20 Economies)
Time to import: Border compliance (hours)	64	8.5	1 (25 Economies)
Cost to import: Border compliance (USD)	307	98.1	0 (28 Economies)
Time to import: Documentary compliance (hours)	44	3.4	1 (30 Economies)
Cost to import: Documentary compliance (USD)	70	23.5	0 (30 Economies)

Figure – Trading across Borders in Israel – Score

Time	Cost	Time	Cost	Time	Cost	Time	Cost
to	to	to	to	to	to	to	to
export:	export:	export:	export:	import:	import:	import:	import:
Border	Border	Documentary	Documentary	Border	Border	Documentary	Documentary
compliance	compliance	compliance	compliance	compliance	compliance	compliance	compliance

Figure – Trading across Borders in Israel and comparator economies – Ranking and Score

78.0

85.8

94.7

85.0

77.4

74.4

82.0

90.0

DB 2020 Trading Across Borders Score

0 100

94.3: Regional Average (OECD high income)

93.8: United Kingdom (Rank: 33)

92.0: United States (Rank: 39)

91.8: Germany (Rank: 42)

83.4: Israel (Rank: 67)

100: France (Rank: 1)

Note: The ranking of economies on the ease of trading across borders is determined by sorting their scores for trading across borders. These scores are the simple average of the scores for the time and cost for documentary compliance and border compliance to export and import.

Figure – Trading across Borders in Israel – Time and Cost

307

150

Time (hours)

Export

–

Export

–

Time (hours) Cost (USD)

Import

–

Import

–

350

300

Cost (USD)

250

200

150

100

Border Compliance

Documentary Compliance

Border Compliance

Documentary Compliance

Details – Trading across Borders in Israel

Characteristics Export Import

Product HS 85 : Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles

HS 8708: Parts and accessories of motor vehicles

Border

Haifa port

Trade partner United States Germany

Domestic transport time (hours)

Distance (km) 111 111

Details – Trading across Borders in Israel – Components of Border Compliance

Domestic transport cost (USD) 224 224

Time to Complete (hours)

Associated Costs (USD)

Export: Clearance and inspections required by

customs authorities

1.5

50.0

Export: Port or border handling

36.0

100.0

Export: Clearance and inspections required by agencies other than customs

0.0 0.0

Import: Clearance and inspections required by

agencies other than customs

31.8

0.0

Import: Clearance and inspections required by customs authorities

16.2 81.7

Import: Port or border handling 64.0 225.0

Details – Trading across Borders in Israel – Trade Documents

Export

Import

Invoice Declaration of Origin

Packing list Invoice

Terminal handling receipt Packing list

Bill of Lading Bill of lading

Customs export declaration Customs Import declaration

SOLAS certificate

SOLAS certificate Standards certificate

Enforcing Contracts

The enforcing contracts indicator measures the time and cost for resolving a commercial dispute through a local first-instance court, and the quality of judicial processes index, evaluating whether each economy has adopted a series of good practices that promote quality and efficiency in the court system. The most recent round of data collection was completed in May 2019. See the methodology for more information.

What the indicators measure

Case study assumptions

Time required to enforce a contract through the courts (calendar days)

Time to file and serve the case
Time for trial and to obtain the judgment
Time to enforce the judgment

Cost required to enforce a contract through the courts (% of claim value)
Average attorney fees
Court costs
Enforcement costs

Quality of judicial processes index (0-18)
Court structure and proceedings (-1-5)
Case management (0-6)
Court automation (0-4)
Alternative dispute resolution (0-3)

The dispute in the case study involves the breach of a sales contract between two domestic businesses. The case study assumes that the court hears an expert on the quality of the goods in dispute. This distinguishes the case from simple debt enforcement.

To make the data on the time and comparable across economies, several assumptions about the case are used:

The dispute concerns a lawful transaction between two businesses (Seller and Buyer), both located in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.
The Buyer orders custom-made furniture, then fails to pay alleging that the goods are not of adequate quality.
The value of the dispute is 200% of the income per capita or the equivalent in local currency of USD 5,000, whichever is greater.
The Seller sues the Buyer before the court with jurisdiction over commercial cases worth 200% of income per capita or $5,000 whichever is greater.
The Seller requests the pretrial attachment of the defendant’s movable assets to secure the claim.
The claim is disputed on the merits because of Buyer’s allegation that the quality of the goods was not adequate.
The judge decides in favor of the seller; there is no appeal.
The Seller enforces the judgment through a public sale of the Buyer’s movable assets.

Standardized Case

Claim value

ILS 287,282

Enforcing Contracts – Israel

City Covered

Tel Aviv

Court name Tel-Aviv-Jaffa Magistrates Court

Figure – Enforcing Contracts in Israel – Score

Indicator

Israel

OECD high income

Best Regulatory Performance

Time (days)

975

589.6

120 (Singapore)

Quality of judicial processes index (0-18)

13.5

11.7

None in 2018/19

Cost (% of claim value) 25.3 21.5 0.1 (Bhutan)

29.9

71.7

75.0

Time

Cost

Quality of judicial processes index

Figure – Enforcing Contracts in Israel and comparator economies – Ranking and Score

DB 2020 Enforcing Contracts Score

0 100

74.1: Germany (Rank: 13)

73.5: France (Rank: 16)

73.4: United States (Rank: 17)

68.7: United Kingdom (Rank: 34)

67.8: Regional Average (OECD high income)

58.9: Israel (Rank: 85)

Note: The ranking of economies on the ease of enforcing contracts is determined by sorting their scores for enforcing contracts. These scores are the simple average of the scores for each of the component indicators.

Figure – Enforcing Contracts in Israel – Time and Cost

1200

1000

Time (days)

800

600

400

200

Time (days) Cost (% of claim value)

45.7

975

30.5

25.3

589.6

447

499

21.5

17.4

437

444

14.4

Cost (% of claim value)

France Germany Israel OECD high

income

United Kingdom

United States

Figure – Enforcing Contracts in Israel and comparator economies – Measure of Quality

Israel

France

Germany

United Kingdom

United States

OECD high income

4.5

2.5

4.5

1.5

3.5

4.5

3.5

4.5

2.5

4.7

4.4

2.5

3.2

2.4

3.6

0 2 4 6 8 10 12 14 16

Sub-Indicator Score

Alternative dispute resolution (0-3) Case management (0-6) Court automation (0-4) Court structure and proceedings (-1-5)

Details – Enforcing Contracts in Israel

Indicator

Time (days) 975

Trial and judgment 600

Filing and service 15

Cost (% of claim value) 25.3

Enforcement of judgment 360

Court fees 3.7

Attorney fees 18

Quality of judicial processes index (0-18) 13.5

Enforcement fees 3.6

Case management (0-6) 4.5

Court structure and proceedings (-1-5) 3.0

Alternative dispute resolution (0-3) 3.0

Court automation (0-4) 3.0

Details – Enforcing Contracts in Israel – Measure of Quality
	Answer	Score
Quality of judicial processes index (0-18)		13.5
Court structure and proceedings (-1-5)		3.0
1. Is there a court or division of a court dedicated solely to hearing commercial cases?	No	0.0
2. Small claims court		1.5
2.a. Is there a small claims court or a fast-track procedure for small claims?	Yes
2.b. If yes, is self-representation allowed?	Yes
3. Is pretrial attachment available?	Yes	1.0
4. Are new cases assigned randomly to judges?	Yes, but manual	0.5
5. Does a woman's testimony carry the same evidentiary weight in court as a man's?	Yes	0.0
Case management (0-6)		4.5
1. Time standards		0.5
1.a. Are there laws setting overall time standards for key court events in a civil case?	Yes
1.b. If yes, are the time standards set for at least three court events?	Yes
1.c. Are these time standards respected in more than 50% of cases?	No
2. Adjournments		0.0
2.a. Does the law regulate the maximum number of adjournments that can be granted?	No
2.b. Are adjournments limited to unforeseen and exceptional circumstances?	Yes
2.c. If rules on adjournments exist, are they respected in more than 50% of cases?	No
3. Can two of the following four reports be generated about the competent court: (i) time to disposition report; (ii) clearance rate report; (iii) age of pending cases report; and (iv) single case progress report?	Yes	1.0
4. Is a pretrial conference among the case management techniques used before the competent court?	Yes	1.0
5. Are there any electronic case management tools in place within the competent court for use by judges?	Yes	1.0
6. Are there any electronic case management tools in place within the competent court for use by lawyers?	Yes	1.0
Court automation (0-4)		3.0
1. Can the initial complaint be filed electronically through a dedicated platform within the competent court?	Yes	1.0
2. Is it possible to carry out service of process electronically for claims filed before the competent court?	No	0.0
3. Can court fees be paid electronically within the competent court?	Yes	1.0
4. Publication of judgments		1.0
4.a Are judgments rendered in commercial cases at all levels made available to the general public through publication in official gazettes, in newspapers or on the internet or court website?	Yes
4.b. Are judgments rendered in commercial cases at the appellate and supreme court level made available to the general public through publication in official gazettes, in newspapers or on the internet or court website?	Yes
Alternative dispute resolution (0-3)		3.0
1. Arbitration		1.5
1.a. Is domestic commercial arbitration governed by a consolidated law or consolidated chapter or section of the applicable code of civil procedure encompassing substantially all its aspects?	Yes
1.b. Are there any commercial disputes—aside from those that deal with public order or public policy— that cannot be submitted to arbitration?	No
1.c. Are valid arbitration clauses or agreements usually enforced by the courts?	Yes

2. Mediation/Conciliation 1.5

2.b. Are mediation, conciliation or both governed by a consolidated law or consolidated chapter or

section of the applicable code of civil procedure encompassing substantially all their aspects (for example, definition, aim and scope of application, desig

Yes

2.a. Is voluntary mediation or conciliation available? Yes

2.c. Are there financial incentives for parties to attempt mediation or conciliation (i.e., if mediation or conciliation is successful, a refund of court filing fees, income tax credits or the like)?

Yes

Resolving Insolvency

Doing Business studies the time, cost and outcome of insolvency proceedings involving domestic legal entities. These variables are used to calculate the recovery rate, which is recorded as cents on the dollar recovered by secured creditors through reorganization, liquidation or debt enforcement (foreclosure or receivership) proceedings. To determine the present value of the amount recovered by creditors, Doing Business uses the lending rates from the International Monetary Fund, supplemented with data from central banks and the Economist Intelligence Unit. The most recent round of data collection was completed in May 2019. See the methodology for more information.

What the indicators measure

Case study assumptions

Time required to recover debt (years)

Measured in calendar years
Appeals and requests for extension are included

Cost required to recover debt (% of debtor’s estate)
Measured as percentage of estate value
Court fees
Fees of insolvency administrators
Lawyers’ fees
Assessors’ and auctioneers’ fees
Other related fees

To make the data on the time, cost and outcome comparable across economies, several assumptions about the business and the case are used:
- A hotel located in the largest city (or cities) has 201 employees and 50 suppliers. The hotel experiences financial difficulties.
- The value of the hotel is 100% of the income per capita or the equivalent in local currency of USD 200,000, whichever is greater.
- The hotel has a loan from a domestic bank, secured by a mortgage over the hotel’s real estate. The hotel cannot pay back the loan, but makes enough money to operate otherwise.
In addition, Doing Business evaluates the quality of legal framework applicable to judicial liquidation and reorganization proceedings and the extent to which best insolvency practices have been implemented in each economy covered.

Outcome
Whether business continues operating as a going concern or business assets are sold piecemeal

Recovery rate for creditors
Measures the cents on the dollar recovered by secured creditors
Outcome for the business (survival or not) determines the maximum value that can be recovered
Official costs of the insolvency proceedings are deducted
Depreciation of furniture is taken into account
Present value of debt recovered

Strength of insolvency framework index (0- 16)
Sum of the scores of four component indices:
Commencement of proceedings index (0-3)
Management of debtor’s assets index (0-6)
Reorganization proceedings index (0-3)
Creditor participation index (0-4)

Indicator

Israel

OECD high income

Best Regulatory Performance

Recovery rate (cents on the dollar)

62.6

70.2

92.9 (Norway)

Resolving Insolvency – Israel

Cost (% of estate)

23.0

9.3

1.0 (Norway)

Time (years) 2.0 1.7 0.4 (Ireland)

Figure – Resolving Insolvency in Israel – Score

Strength of insolvency framework index (0-16)

12.5

11.9

None in 2018/19

Outcome (0 as piecemeal sale and 1 as going concern) 1 .. ..

67.4

78.1

Recovery rate Strength of insolvency framework index

Figure – Resolving Insolvency in Israel and comparator economies – Ranking and Score

DB 2020 Resolving Insolvency Score

0 100

90.5: United States (Rank: 2)

89.8: Germany (Rank: 4)

80.3: United Kingdom (Rank: 14)

74.9: Regional Average (OECD high income)

74.6: France (Rank: 26)

72.7: Israel (Rank: 29)

Note: The ranking of economies on the ease of resolving insolvency is determined by sorting their scores for resolving insolvency. These scores are the simple average of the scores for the recovery rate and the strength of insolvency framework index.

Figure – Resolving Insolvency in Israel – Time and Cost

2.5

Time (years)

1.5

Time (years) Cost (% of estate)

23.0

1.9

2.0

1.7

1.2

9.0

1.0

8.0

9.3

1.0 10.0

6.0

Cost (% of estate)

0.5 5

France Germany Israel OECD high

income

United Kingdom

United States

Figure – Resolving Insolvency in Israel and comparator economies – Measure of Quality

Israel

France

Germany

United Kingdom

United States

OECD high income

5.5

5.3

2.8

2.1

1.9

0 2 4 6 8 10 12 14 16

Sub-Indicator Score

Management of debtor's assets index (0-6) Commencement of proceedings index (0-3) Creditor participation index (0-4) Reorganization proceedings index (0-3)

Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice.”

Figure – Resolving Insolvency in Israel and comparator economies – Recovery Rate

74.8

79.8

85.4

81.0

70.2

62.6

Recovery rate(cents on the dollar)

Israel France Germany United Kingdom United States OECD high income

Details – Resolving Insolvency in Israel

Indicator

Answer

Score

Proceeding

receivership

Bizbank will commence the process by requesting to obtain its collateral through enforcement action and appointment of a receiver. This method is in the bank's best interest, because it is the quickest way for a secured creditor to obtain value, rather than starting formal liquidation proceedings. For the obtainment of a fixed charge, Bizbank may refer to the court or to the execution offices regarding real estate assets. For the obtainment of a floating charge, Bizbank may

refer only to the court.

Time (in years)

2.0

After Mirage defaults on the loan, BizBank will commence enforcement proceedings in court. The court will review the application and appoint a receiver to manage the assets. After allowing the parties an opportunity to present their case, the court will make a decision on BizBank's application. BizBank will apply to the Execution Office in order to organize

the auction, where the hotel will be sold as a going concern.

Outcome going concern Because sale as a going concern would maximize the value, it is more likely that the assets will not be sold piecemeal.

Recovery rate

(cents on the dollar)

62.6

Cost (% of estate) 23.0 Main expenses include attorneys' fees (up to 10%), remuneration of the receiver (up to 15%), accountants' fees (1%), and other fees (1%).

Details – Resolving Insolvency in Israel – Measure of Quality
	Answer	Score
Strength of insolvency framework index (0-16)		12.5
Commencement of proceedings index (0-3)		3.0
What procedures are available to a DEBTOR when commencing insolvency proceedings?	(a) Debtor may file for both liquidation and reorganization	1.0
Does the insolvency framework allow a CREDITOR to file for insolvency of the debtor?	(a) Yes, a creditor may file for both liquidation and reorganization	1.0
What basis for commencement of the insolvency proceedings is allowed under the insolvency framework? (a) Debtor is generally unable to pay its debts as they mature (b) The value of debtor's liabilities exceeds the value of its assets	(a) Debtor is generally unable to pay its debts as they mature	1.0
Management of debtor's assets index (0-6)		5.5
Does the insolvency framework allow the continuation of contracts supplying essential goods and services to the debtor?	Yes	1.0
Does the insolvency framework allow the rejection by the debtor of overly burdensome contracts?	Yes	1.0
Does the insolvency framework allow avoidance of preferential transactions?	Yes	1.0
Does the insolvency framework allow avoidance of undervalued transactions?	Yes	1.0
Does the insolvency framework provide for the possibility of the debtor obtaining credit after commencement of insolvency proceedings?	Yes	1.0
Does the insolvency framework assign priority to post-commencement credit?	(a) Yes over all pre- commencement creditors, secured or unsecured	0.5
Reorganization proceedings index (0-3)		2.0
Which creditors vote on the proposed reorganization plan?	(b) Only creditors whose rights are affected by the proposed plan	1.0
Does the insolvency framework require that dissenting creditors in reorganization receive at least as much as what they would obtain in a liquidation?	Yes	1.0
Are the creditors divided into classes for the purposes of voting on the reorganization plan, does each class vote separately and are creditors in the same class treated equally?	No	0.0
Creditor participation index (0-4)		2.0
Does the insolvency framework require approval by the creditors for selection or appointment of the insolvency representative?	No	0.0
Does the insolvency framework require approval by the creditors for sale of substantial assets of the debtor?	No	0.0
Does the insolvency framework provide that a creditor has the right to request information from the insolvency representative?	Yes	1.0
Does the insolvency framework provide that a creditor has the right to object to decisions accepting or rejecting creditors' claims?	Yes	1.0

Doing Business presents detailed data for the employing workers indicators on the Doing Business website (http://www.doingbusiness.org). The study does not present rankings of economies on these indicators or include the topic in the aggregate ease of doing business score or ranking on the ease of doing business.

The most recent round of data collection was completed in May 2019. See the methodology for more information.

What the indicators measure

Hiring

(i) whether fixed-term contracts are prohibited for permanent tasks; (ii) maximum cumulative duration of fixed-term contracts;

(iii) length of the maximum probationary period; (iv) minimum wage;(v) ratio of minimum wage to the average value added per worker.

Working hours

(i) maximum number of working days allowed per week; (ii) premiums for work: at night, on a weekly rest day and overtime;

(iii) whether there are restrictions on work at night, work on a weekly rest day and for overtime work; (iv) length of paid annual leave.

Redundancy rules

(i) whether redundancy can be basis for terminating workers; (ii) whether employer needs to notify and/or get approval from third party to terminate 1 redundant worker and a group of 9 redundant workers; (iii) whether the law requires employer to reassign or retrain a worker before making worker redundant; (iv) whether priority rules apply for redundancies and reemployment.

To make the data comparable across economies, several assumptions about the worker and the business are used.

The worker:

Is a cashier in a supermarket or grocery store, age 19, with one year of work experience.
Is a full-time employee.
Is not a member of the labor union, unless membership is mandatory.

The business:
Is a limited liability company (or the equivalent in the economy).
Operates a supermarket or grocery store in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.
Has 60 employees.
Is subject to collective bargaining agreements if such agreements cover more than 50% of the food retail sector and they apply even to firms that are not party to them.
Abides by every law and regulation but does not grant workers more benefits than those mandated by law, regulation or (if applicable) collective bargaining agreements.

Redundancy cost

(i) notice period for redundancy dismissal; (ii) severance payments, and (iii) penalties due when terminating a redundant worker. Data on the availability of unemployment protection for a worker with one year of employment is also collected.

Employing Workers – Israel

Details – Employing Workers in Israel

Hiring

Fixed-term contracts prohibited for permanent tasks? No

Maximum length of a single fixed-term contract (months) No limit

Maximum length of fixed-term contracts, including renewals (months) No limit

Minimum wage applicable to the worker assumed in the case study (US$/month) 1448.6

Maximum length of probationary period (months) n.a.

Ratio of minimum wage to value added per worker 0.3

Standard workday 8.8

Working hours

Premium for night work (% of hourly pay) 0.0

Maximum number of working days per week 5.5

Premium for overtime work (% of hourly pay) 25.0

Premium for work on weekly rest day (% of hourly pay) 50.0

Restrictions on weekly holiday? Yes

Restrictions on night work? No

Paid annual leave for a worker with 1 year of tenure (working days) 14.0

Restrictions on overtime work? No

Paid annual leave for a worker with 10 years of tenure (working days) 24.0

Paid annual leave for a worker with 5 years of tenure (working days) 16.0

Redundancy rules

Paid annual leave (average for workers with 1, 5 and 10 years of tenure, in working days) 18.0

Third-party notification if one worker is dismissed? No

Dismissal due to redundancy allowed by law? Yes

Third-party notification if nine workers are dismissed? No

Third-party approval if one worker is dismissed? No

Retraining or reassignment obligation before redundancy? No

Third-party approval if nine workers are dismissed? No

Priority rules for reemployment? No

Priority rules for redundancies? No

Notice period for redundancy dismissal for a worker with 1 year of tenure (weeks of salary) 4.3

Redundancy cost

Notice period for redundancy dismissal for a worker with 10 years of tenure (weeks of salary) 4.3

Notice period for redundancy dismissal for a worker with 5 years of tenure (weeks of salary) 4.3

Severance pay for redundancy dismissal for a worker with 1 year of tenure (weeks of salary) 4.3

Notice period for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure, in weeks of salary) 4.3

Severance pay for redundancy dismissal for a worker with 5 years of tenure (weeks of salary) 21.7

Severance pay for redundancy dismissal for a worker with 10 years of tenure (weeks of salary) 43.3

Unemployment protection after one year of employment? Yes

Severance pay for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure, in weeks of salary) 23.1

PEO Israel

Israel has emerged as a compelling destination for Professional Employer Organization (PEO) services, showcasing a dynamic blend of innovation and entrepreneurship. Situated at the crossroads of technological advancement and diverse industries, Israel offers a unique landscape for businesses seeking PEO solutions. With a robust start-up culture and a highly skilled workforce, the country provides a fertile ground for companies to establish their presence. Israel’s PEO services play a pivotal role in navigating the intricacies of employment regulations, managing human resources efficiently, and tapping into the nation’s pool of specialized professionals. As companies look to expand and thrive in this innovation-driven economy, partnering with PEOs in Israel offers a strategic advantage in navigating employment complexities and leveraging the nation’s vibrant business ecosystem.

PEO (Professional Employer Organization) services in Israel have gained remarkable prominence, offering a strategic solution for businesses to optimize their workforce management and focus on core operations. Israel’s dynamic and diverse business environment, known for its technological prowess and innovation, has created a fertile ground for PEO services to flourish. These services encompass a wide range of offerings, including HR administration, payroll management, benefits coordination, and compliance with intricate labor laws. By collaborating with a PEO in Israel, businesses can navigate the intricacies of employment regulations seamlessly, ensuring legal compliance while streamlining administrative processes. This enables companies to tap into Israel’s talent pool, drive operational efficiency, and stay competitive in a rapidly evolving global marketplace, all within the framework of Israel’s dynamic economic landscape.

Business Reforms in Israel

From May 2, 2018 to May 1, 2019, 115 economies implemented 294 business regulatory reforms across the 10 areas measured by Doing Business. Reforms inspired by

Doing Business have been implemented by economies in all regions. The following are reforms implemented since Doing Business 2008.

=Doing Business reform making it easier to do business. = Change making it more difficult to do business.

DB2020

Starting a Business: Israel made starting a business easier by allowing joint registration of corporate tax and value added tax.

Getting Credit: Israel improved access to credit information by reporting both positive and negative data on individual borrowers.

Paying Taxes: Israel made paying taxes easier by introducing an electronic system for filing and paying value added tax and social security contributions. Israel made paying taxes less costly by reducing the corporate income tax rate.

Trading across Borders: Israel made exporting easier by eliminating the certificate of origin requirement, thereby decreasing the time and cost of export documentary compliance.

DB2019

Registering Property: Israel made registering property easier by reducing the time needed to obtain a municipal tax clearance certificate and by increasing the transparency of the land registry and cadaster.

Employing Workers:

Israel changed regulations pertaining to working hours per week, overtime hours and maternity leave.

DB2018

Registering Property: Israel made registering property easier by digitizing its title records.

Getting Credit: Israel improved access to credit information by adopting a law allowing the establishment of a public credit registry.

DB2017

Starting a Business: Israel made starting a business easier by merging tax and social security registration.

DB2016

Paying Taxes: Israel made paying taxes more costly for companies by increasing the corporate income tax rate, the rate for social security contributions paid by employers for the upper wage bracket and municipal taxes.

DB2015

Paying Taxes: Israel made paying taxes more costly for companies by increasing the profit tax rate.

DB2014

Starting a Business: Israel made starting a business easier by reducing the time required for registration at the Income Tax Department and the National Insurance Institute.

Resolving Insolvency: Israel made resolving insolvency easier through an amendment to its company law allowing the assumption or rejection of executory contracts, granting maximum priority to postcommencement credit, extending the maximum period of moratorium during restructuring proceedings and allowing the sale of secured assets when necessary to ensure a successful restructuring.

DB2013

Registering Property: Israel made transferring property easier by tightening time limits for tax authorities to process capital gains self-assessments on property transfers.

DB2012

Trading across Borders: Israel made trading across borders easier by changing the method used to calculate port fees.

Resolving Insolvency: Israel amended its courts law to establish specialized courts for dealing with economic matters.

DB2011

Trading across Borders: Israel is expanding its electronic data interchange system and developing a single-window framework, allowing easier assembly of documents required by different authorities and reducing the time to trade.

DB2010

Paying Taxes:

Israel made paying taxes less costly for companies by reducing the corporate income tax rate.

Page 63

DB2009

Registering Property: Israel made property registration cheaper by eliminating the sale tax.

DB2008

Paying Taxes: Israel made paying taxes less costly for companies by reducing the corporate income tax rate and abolishing the stamp duty.

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Economy Profile of Israel

Ease of Doing Business in Israel

Rankings on Doing Business topics – Israel

Topic Scores

Starting a Business

What the indicators measure

Procedures to legally start and formally operate a company (number)

Time required to complete each procedure (calendar days)

Cost required to complete each procedure (% of income per capita)

Paid-in minimum capital (% of income per capita)

The business:

The owners:

Starting a Business – Israel

Figure – Starting a Business in Israel – Score

Figure – Starting a Business in Israel and comparator economies – Ranking and Score

Figure – Starting a Business in Israel – Procedure, Time and Cost

Details – Starting a Business in Israel – Procedure, Time and Cost

1 Obtain company registration documents certified by an attorney

2 File with the registrar of companies, Ministry of Justice

3 Register for taxes and VAT at Ministry of Finance, Income Tax Department and at the National Insurance Institute

Dealing with Construction Permits

What the indicators measure

Procedures to legally build a warehouse (number)

Time required to complete each procedure (calendar days)

Cost required to complete each procedure (% of income per capita)

Building quality control index (0-15)

The construction company (BuildCo):

The warehouse:

The water and sewerage connections:

Dealing with Construction Permits – Israel

Figure – Dealing with Construction Permits in Israel – Score

Figure – Dealing with Construction Permits in Israel and comparator economies – Ranking and Score

Figure – Dealing with Construction Permits in Israel – Procedure, Time and Cost

Figure – Dealing with Construction Permits in Israel and comparator economies – Measure of Quality

Details – Dealing with Construction Permits in Israel – Procedure, Time and Cost

1 File a request for information regarding the land

2 Obtain a survey map

3 Obtain building permit from Local Committee

4 Obtain marking report from authorized surveyor

Details – Dealing with Construction Permits in Israel – Measure of Quality

Getting Electricity

What the indicators measure

Procedures to obtain an electricity connection (number)

Time required to complete each procedure (calendar days)

Cost required to complete each procedure (% of income per capita)

The reliability of supply and transparency of tariffs index (0-8)

The warehouse:

The electricity connection:

The monthly consumption:

Price of electricity (cents per kilowatt-hour)*

Getting Electricity – Israel

Figure – Getting Electricity in Israel – Score

Figure – Getting Electricity in Israel and comparator economies – Ranking and Score

0 100

Figure – Getting Electricity in Israel – Procedure, Time and Cost

* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.

Figure – Getting Electricity in Israel and comparator economies – Measure of Quality

Details – Getting Electricity in Israel – Procedure, Time and Cost

Submit application to Israel Electric Corporation and await initial estimate

Await and receive internal wiring inspection, meter installation and final connection

Details – Getting Electricity in Israel – Measure of Quality

Reliability of supply and transparency of tariff index (0-8) 6

Total duration and frequency of outages per customer a year (0-3) 2

Mechanisms for monitoring outages (0-1) 1

Mechanisms for restoring service (0-1) 1

Regulatory monitoring (0-1) 1

Financial deterrents aimed at limiting outages (0-1) 1

Communication of tariffs and tariff changes (0-1) 0

Note:

Registering Property

What the indicators measure

Case study assumptions

Procedures to legally transfer title on immovable property (number)

Time required to complete each procedure (calendar days)

Cost required to complete each procedure (% of property value)

Quality of land administration index (0-30)

The parties (buyer and seller):

The property (fully owned by the seller):

Registering Property – Israel

Figure – Registering Property in Israel and comparator economies – Ranking and Score