Hevra B.M. (Ltd.)

Hevra Be'eravon Mugbal (Hevra B.M.), Hebrew for "company with limited liability," is the standard Israeli corporate vehicle, functionally equivalent to a UK Ltd. or US LLC, governed by the Companies Law, 5759-1999. Most Israeli startups incorporate domestically as a Hevra B.M., administered through the Registrar of Companies (Rasham HaChevrot), before layering a Delaware C-Corp parent on top for US venture financing, while Israeli-only businesses typically use the Hevra B.M. as their default and terminal structure.

What Does It Take to Form a Hevra B.M.?

The Companies Law imposes no statutory minimum share capital requirement; a company can be registered with as little as a symbolic amount of registered capital, and shares can be issued at any par value. A private Hevra B.M. needs a minimum of one director and one shareholder, both of which can be the same person, and both can be individuals or legal entities of any nationality residing anywhere in the world, since Israeli law imposes no residency requirement on directors or shareholders of a private company. A private company is capped at 50 shareholders, excluding employees who hold shares, and bearer shares are not permitted.

What Does Registration Actually Involve?

Incorporation is completed by filing with the Registrar of Companies: a company formation form listing the company's name, objectives, registered share capital and shareholder details, the articles of association, and an affidavit from each first director confirming willingness to serve. If incorporation documents are drafted in a foreign language, a Hebrew translation is required. Every Hevra B.M. must maintain a registered local address and an internal shareholder register at all times, though appointing a company secretary is not a statutory requirement for private companies. The 2026 Registrar filing fee is NIS 1,777, reduced to NIS 1,338 if paid by March 31, 2026.

What Are a Hevra B.M.'s Ongoing Obligations?

Private and public Hevra B.M. companies alike must prepare annual audited financial statements and pay an annual fee to the Registrar of Companies to maintain good standing. The board of directors must convene at least once a year, though most companies meet more frequently in practice. Directors carry statutory fiduciary duties under the Companies Law, including an obligation to act in the company's best interest and exercise reasonable care and skill in its management.

How Is a Hevra B.M. Taxed?

Israel's Tax Authority sets standard corporate tax on a Hevra B.M. at 23% as of 2026. Companies that qualify for Preferred Technological Enterprise status can access substantially reduced rates, part of the broader package of incentives Israel uses to keep R&D-intensive companies incorporated and operating domestically even as many eventually add a foreign holding structure for international fundraising.

How Does a Hevra B.M. Compare to a Public Company or Branch?

A Chevra Betziburit, or public company, requires at least two shareholders and falls under the oversight of the Israel Securities Authority in addition to the Registrar of Companies, with correspondingly heavier disclosure obligations. A foreign company can alternatively operate in Israel through a branch office rather than a separate Israeli subsidiary, but a branch carries unlimited liability back to its foreign parent and is taxed only on its Israel-sourced income, a different risk and tax profile from the limited liability a properly capitalized Hevra B.M. provides.