Opening a Bank Account in Israel

This article will discuss opening a bank account in Israel, specifically for an amuta or cheletz (non-profit organizations), as this is the most frequent inquiry we receive regarding bank accounts. We also include links to two videos addressing opening a bank account for non-profits or foreign entities. 

When to Open a Bank Account

It is possible to open a bank account for an amuta only after legally registering the non-profit with the Israeli Ministry of Justice. There are four main large banks in Israel: Bank Leumi, Bank Ha’Poalim, Bank Mercantile, and Bank Mizrahi Tefachot. Whether you choose to open an account at one of the larger or smaller banks, the primary tip we can provide is to choose a bank where the account holders or signatories are trusted by the bank managers. When opening a bank account, local non-profits or foreign entities will often have an Israeli signatory for the account, and it’s important to work with people who you know and trust who can help you resolve any issues that might arise during what is often a drawn-out, bureaucratic process. 

Challenges with Banks in Israel

Non-profit organizations often have a hard time opening a bank in Israel for two primary reasons: 1) non-profits don’t make banks much money as they do not rely on credit or loans to the same degree as companies, and 2) United States FATCA measures place significant economic pressure on Israeli banks (and other banks worldwide), and these banks can be fined if they do not follow FATCA regulations. Thus, banks can be hesitant to open new accounts for non-profit organizations.

At the same time, in spite of the bureaucratic hurdles, we have successfully opened bank accounts for many local and international organizations. Representatives of the organization need to go to the bank with the organization’s documents of incorporation and provide information on the organization — budget, sources of income, expenses, etc. We provide a long list of documents required in our article Mandatory Paperwork in Israel to Open an Amuta Bank Account.

Opening a Bank Account for a Foreign Entity in Israel

Foreign citizens have the right to open an account in any Israeli bank; however, banks will require foreign nationals to show their connection to Israel or a valid visa to reside in Israel.  Transferring funds to a local account from abroad may be a challenge. An account holder must explain their relation to the account abroad to which a transfer was made. An alternative for a foreign resident that wishes to operate an account in Israel is to open a trust account with the bank. This is similar to opening a personal bank account, except a trustee will manage the account on behalf of the beneficiary, pay the seller directly, and explain to the bank the nature of the relationship to the source of transferred funds.

Many Israeli banks offer “non-resident accounts” to people living abroad. Based on your meeting eligibility by bank criteria, you may be able to open an account. The number of days spent in Israel per year is one example of a factor that may be considered, meaning the process may be more challenging when conducting business from abroad. If you’re debating making your move to Israel permanent, it may be better to hold off and get a resident’s account once you have made your move.

To open an Israeli resident’s bank account, you do need to provide information about your residency in the country. Usually, it’s obligatory to visit the bank in person– so it may be better to complete this once you’ve arrived. The best decision is generally to sit tight until you make the move.

As previously mentioned, a bank account may be owned by a company, but an account holder is an individual. The transfer of money from a company account to an individual’s personal account may be explained as such:

• If the person physically in Israel is one of the founders of the company abroad, then the person will need to provide the bank with the certified constituent documents of the company.
  • In the case the physical person in Israel is an employee or adviser of the foreign company and the amounts that are transferred are their salary or consultation fees, the bank may require a contract or other appropriate documents proving the authenticity of this relationship.
  • If the physical person has received credit from the foreign company, the bank will require a loan agreement.

Contact Us

If you require assistance opening a bank account in Israel, please contact us. Advocate Joshua Pex from our office, specializes in non-profit law in Israel, and he has helped many local and foreign entities with all their bank account needs.

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03-3724722

055-9781688

office@lawoffice.org.il