Can an Australian resident own and run an Israeli company entirely from Australia?

An Australian founder with an Israeli market, an Israeli supplier, or an Israeli development team often wants an Israeli company without relocating to Tel Aviv. The corporate side is genuinely accommodating — Israel lets a foreigner own and direct the company outright. The part that trips people up is not whether they can run it from Sydney, but the two tax systems that both want a claim on the same profits once they do.

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Detailed Explanation

On ownership and control, Israeli company law is liberal. The Companies Law 1999 imposes no nationality or residency requirement on shareholders or directors. An Australian individual can hold 100% of the shares, be the sole director, and there is no obligation to take on an Israeli partner or a local nominee director. Board decisions can be made from abroad, and the company can be operated day to day over email and video. In that narrow sense, yes — you can run an Israeli company entirely from Australia.

But the company cannot be a purely virtual presence. The Companies Law 1999 requires a registered office in Israel, and in practice the company also needs an Israeli accountant to file annual reports with the Companies Registrar (Rasham HaHevrot) and to handle its tax filings; if it employs anyone in Israel it must open a deductions file (tik nikuyim) for payroll. Our guide to registering a company in Israel as a foreigner walks through setting up the registered office and the local compliance scaffolding.

Now the heart of the matter, which is tax residency on both sides. Israel taxes a company that is incorporated in Israel as an Israeli resident, regardless of where its director sits — so your Israeli company pays Israeli corporate tax on its profits. Australia does not let go either: where an Australian resident controls a foreign company, the controlled-foreign-company (CFC) regime can attribute the company's income to the Australian controller and tax it in Australia even before any dividend is paid. The same profit is therefore in two nets at once.

In Practice: Under Section 123 of the Companies Law 1999 an Israeli company must maintain a registered office in Israel. Because it is incorporated in Israel it is an Israeli tax resident and pays corporate tax at 23% to the Israel Tax Authority on its profits, with annual returns due and a roughly NIS 1,500 yearly fee to the Companies Registrar (Rasham HaHevrot) to keep it in good standing. Separately, Australia's CFC rules may attribute the company's income to its Australian controller — the Australia–Israel double tax treaty, in force since 2020, is what resolves the overlap so the same profit is not taxed twice.

The treaty is the mechanism that makes the structure workable rather than punitive. It provides relief from double taxation and sets the withholding ceilings on dividends, interest, and royalties flowing from the Israeli company to the Australian owner, generally capping dividend withholding well below Israel's domestic rate. Used properly, you pay Israeli corporate tax on profits, draw dividends at the treaty rate, and credit the Israeli tax against the Australian liability rather than stacking one on top of the other. Without planning, the same income can be taxed inefficiently in both countries.

There is also a "management and control" subtlety to keep in view. Running the company from Australia does not remove it from Israeli tax (incorporation already fixes that), but heavy on-the-ground Australian management strengthens any Australian residency or CFC claim. The structure is fine; it simply needs to be planned with both tax systems in mind from the outset, not after the first profitable year.

Key Considerations

• The Companies Law 1999 allows 100% Australian ownership and a sole non-resident director, with no Israeli partner required.
• The company must keep an Israeli registered office and needs a local accountant for Companies Registrar and tax filings.
• An Israeli-incorporated company is an Israeli tax resident and pays 23% corporate tax regardless of where it is managed.
• Australia's CFC rules can attribute the company's income to the Australian controller before any dividend is paid.
• The Australia–Israel tax treaty relieves double taxation and caps dividend withholding — plan the profit-extraction route in advance.

When to Consult a Lawyer

This question typically requires professional legal and tax advice when:

• You are deciding between an Israeli company, an Australian company, or a branch, and need the cross-border tax compared.
• The company will earn profits and you must plan dividend extraction under the treaty and the CFC rules.
• The company will hire Israeli employees or contractors, triggering payroll and deductions-file obligations.

A qualified Israeli attorney working with your Australian accountant should structure the ownership and profit flows before the company starts trading.

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Speak With an Israeli Attorney

We set up Israeli companies for Australian founders, provide the registered office and local compliance, and coordinate with your Australian adviser so Israeli corporate tax, treaty relief, and the CFC rules work together rather than against you.

Contact us for a confidential initial consultation.