Tax benefits for German investors in Israel


The state of Israel encourages German investors, to invest in Israeli Startup companies, by offering Tax benefits.



AUREN - Investments in Israel


Israeli startup companies are looking for a German investor that could provide, besides monetary assistance, a connection to potential business partners and a better option to penetrate the global market.

Tax benefits for German investors

Israel is known as a “startup nation”, leading technology and High-tech country. There are hundreds of startup projects in Israel that waiting for their first investment. The Israeli Tax Authority encourages foreign investments because of the great business opportunity that could be created from this kind of international collaboration.

Tax encouragement

The maximum amount of investment recognized for tax purposes is up to 5 million NIS. The benefit is provided for a business collaboration of individuals or for individual investor that investing in new companies as an investment channel, recognized as an expense that can be offset from the total sources of income (in that tax year for the benefit period). The condition is that all the requirements in law have been proved and the company recognized as a new company by the Israeli Innovation Authority.

How to start the investment?

First of all, there is a need to double check if the invested company signed as a “new company” and have all the approvals as defined in the Israeli law.

Afterwards, you should check if your investment is under the next basic criteria’s:

  1. The amount of the investment that allowed to an Individual investor, need to be up to 5 million NIS (in a business collaboration of individuals investors, the investment is examined for each investor separately).
  2. The individual investor must hold the shares that have been given to him in return for his qualifying investment in the target company, or the new developing company, for the entire benefit period. The benefit period is defined in a period of 3 tax years, which begins in the tax year in which the amounts that are the qualifying investment were paid.

The Israeli startup business environment keeps developing, new startup companies are rapidly rising and give solutions to multiple problems existing in our world. The startup companies operating in Israel are  great business opportunity for German investments.

Yaniv Angel

International taxation expert

[email protected]