Economy Profile 2015 Doing Business 2015
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Doing Business 2015 Israel
Economy Profile 2015
Israel
Doing Business 2015 Israel 2
© 2014 The International Bank for Reconstruction and Development /
The World Bank
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ISBN (paper): 978-1-4648-0351-2
ISBN (electronic): 978-1-4648-0352-9
DOI: 10.1596/978-1-4648-0351-2
ISSN: 1729-2638
Cover design: Corporate Visions, Inc.Doing Business 2015 Israel 3 CONTENTS Introduction .................................................................................................................................. 4 The business environment .......................................................................................................... 6 Starting a business ..................................................................................................................... 16 Dealing with construction permits ........................................................................................... 22 Getting electricity ....................................................................................................................... 29 Registering property .................................................................................................................. 35 Getting credit .............................................................................................................................. 42 Protecting minority investors ................................................................................................... 48 Paying taxes ................................................................................................................................ 58 Trading across borders .............................................................................................................. 62 Enforcing contracts .................................................................................................................... 67 Resolving insolvency .................................................................................................................. 74 Labor market regulation ........................................................................................................... 79 Distance to frontier and ease of doing business ranking ...................................................... 85 Resources on the Doing Business website .............................................................................. 88
Doing Business 2015 Israel 4
INTRODUCTION
Doing Business sheds light on how easy or difficult it is 1, 2014 (except for the paying taxes indicators, which
for a local entrepreneur to open and run a small to cover the period January–December 2013).
medium-size business when complying with relevant
The Doing Business methodology has limitations. Other
regulations. It measures and tracks changes in
areas important to business—such as an economy’s
regulations affecting 11 areas in the life cycle of a
proximity to large markets, the quality of its
business: starting a business, dealing with construction
infrastructure services (other than those related to
permits, getting electricity, registering property, getting
trading across borders and getting electricity), the
credit, protecting minority investors, paying taxes,
security of property from theft and looting, the
trading across borders, enforcing contracts, resolving
transparency of government procurement,
insolvency and labor market regulation.
macroeconomic conditions or the underlying strength of
In a series of annual reports Doing Business presents institutions—are not directly studied by Doing Business.
quantitative indicators on business regulations and the The indicators refer to a specific type of business,
protection of property rights that can be compared generally a local limited liability company operating in
across 189 economies, from Afghanistan to Zimbabwe, the largest business city. Because standard assumptions
over time. The data set covers 47 economies in Sub- are used in the data collection, comparisons and
Saharan Africa, 32 in Latin America and the Caribbean, 25 benchmarks are valid across economies. The data not
in East Asia and the Pacific, 26 in Eastern Europe and only highlight the extent of obstacles to doing business;
Central Asia, 20 in the Middle East and North Africa and they also help identify the source of those obstacles,
8 in South Asia, as well as 31 OECD high-income supporting policy makers in designing regulatory reform.
economies. The indicators are used to analyze economic
More information is available in the full report. Doing
outcomes and identify what reforms have worked, where
Business 2015 presents the indicators, analyzes their
and why.
relationship with economic outcomes and presents
This economy profile presents the Doing Business business regulatory reforms. The data, along with
indicators for Israel. To allow useful comparison, it also information on ordering Doing Business 2015, are
provides data for other selected economies (comparator available on the Doing Business website at
economies) for each indicator. The data in this report are http://www.doingbusiness.org.
current as of JuneDoing Business 2015 Israel 5
CHANGES IN DOING BUSINESS 2015
As part of a 2-year update in methodology, Doing Finally, the name of the employing workers indicator set
Business 2015 incorporates 7 important changes. First, has been changed to labor market regulation, and the
the ease of doing business ranking as well as all topic- scope of this indicator set has also been changed. The
level rankings are now computed on the basis of indicators now focus on labor market regulation
distance to frontier scores (see the chapter on the applying to the retail sector rather than the
distance to frontier and ease of doing business ranking). manufacturing sector, and their coverage has been
Second, for the 11 economies with a population of more expanded to include regulations on labor disputes and
than 100 million, data for a second city have been added on benefits provided to workers. The labor market
to the data set and the ranking calculation. These regulation indicators continue to be excluded from the
economies are Bangladesh, Brazil, China, India, aggregate distance to frontier score and ranking on the
Indonesia, Japan, Mexico, Nigeria, Pakistan, the Russian ease of doing business.
Federation and the United States. Third, for getting
Beyond these changes there are 3 other updates in
credit, the methodology has been revised for both the
methodology. For paying taxes, the financial statement
strength of legal rights index and the depth of credit
variables have been updated to be proportional to 2012
information index. The number of points has been
income per capita; previously they were proportional to
increased in both indices, from 10 to 12 for the strength
2005 income per capita. For enforcing contracts, the
of legal rights index and from 6 to 8 for the depth of
value of the claim is now set at twice the income per
credit information index. In addition, only credit bureaus
capita or $5,000, whichever is greater. For dealing with
and registries that cover at least 5% of the adult
construction permits, the cost of construction is now set
population can receive a score on the depth of credit
at 50 times income per capita (before, the cost was
information index.
assessed by the Doing Business respondents). In addition,
Fourth, the name of the protecting investors indicator set this indicator set no longer includes the procedures for
has been changed to protecting minority investors to obtaining a landline telephone connection.
better reflect its scope—and the scope of the indicator
For more details on the changes, see the “What is
set has been expanded to include shareholders’ rights in
changing in Doing Business?” chapter starting on page
corporate governance beyond related-party transactions.
24 of the Doing Business 2015 report. For more details
Fifth, the resolving insolvency indicator set has been
on the data and methodology, please see the “Data
expanded to include an index measuring the strength of
Notes” chapter starting on page 114 of the Doing
the legal framework for insolvency. Sixth, the calculation
Business 2015 report. For more details on the distance to
of the distance to frontier score for paying taxes has
frontier metric, please see the “Distance to frontier and
been changed. The total tax rate component now enters
ease of doing business ranking” chapter in this profile.
the score in a nonlinear fashion, in an approach different
from that used for all other indicators (see the chapter
on the distance to frontier and ease of doing business
ranking).Doing Business 2015 Israel 6
THE BUSINESS ENVIRONMENT
For policy makers trying to improve their economy’s
regulatory environment for business, a good place to start ECONOMY OVERVIEW
is to find out how it compares with the regulatory
environment in other economies. Doing Business provides
an aggregate ranking on the ease of doing business
Region: OECD high income
based on indicator sets that measure and benchmark
regulations applying to domestic small to medium-size Income category: High income
businesses through their life cycle. Economies are ranked
from 1 to 189 by the ease of doing business ranking. This Population: 8,059,400
year's report presents results for 2 aggregate measures:
the distance to frontier score and the ease of doing GNI per capita (US$): 34,120
business ranking. The ranking of economies is determined
by sorting the aggregate distance to frontier (DTF) scores. DB2015 rank: 40
The distance to frontier score benchmarks economies
with respect to regulatory practice, showing the absolute DB2014 rank: 38*
distance to the best performance in each Doing Business
Change in rank: -2
indicator. An economy’s distance to frontier score is
indicated on a scale from 0 to 100, where 0 represents the
DB 2015 DTF: 71.25
worst performance and 100 the frontier. (See the chapter
on the distance to frontier and ease of doing business). DB 2014 DTF: 71.18
The 10 topics included in the ranking in Doing Business
2015: starting a business, dealing with construction Change in DTF: 0.07
permits, getting electricity, registering property, getting
credit, protecting minority investors, paying taxes, trading * DB2014 ranking shown is not last year’s published
across borders, enforcing contracts and resolving ranking but a comparable ranking for DB2014 that
insolvency. The labor market regulation indicators captures the effects of such factors as data
(formerly employing workers) are not included in this corrections and the changes in methodology. See
year’s aggregate ease of doing business ranking, but the the data notes starting on page 114 of the Doing
data are presented in this year’s economy profile. Business 2015 report for sources and definitions.
The aggregate ranking on the ease of doing business
benchmarks each economy’s performance on the
indicators against that of all other economies in the Doing
Business sample (figure 1.1). While this ranking tells much
about the business environment in an economy, it does
not tell the whole story. The ranking on the ease of doing
business, and the underlying indicators, do not measure all
aspects of the business environment that matter to firms
and investors or that affect the competitiveness of the
economy. Still, a high ranking does mean that the
government has created a regulatory environment
conducive to operating a business.Doing Business 2015 Israel
THE BUSINESS ENVIRONMENT
Figure 1.1 Where economies stand in the global ranking on the ease of doing business
Source: Doing Business database.Doing Business 2015 Israel THE BUSINESS ENVIRONMENT For policy makers, knowing where their economy regional average (figure 1.2). The economy’s rankings stands in the aggregate ranking on the ease of doing (figure 1.3) and distance to frontier scores (figure 1.4) business is useful. Also useful is to know how it ranks on the topics included in the ease of doing business relative to comparator economies and relative to the ranking provide another perspective. Figure 1.2 How Israel and comparator economies rank on the ease of doing business Note: The rankings are benchmarked to June 2014 and based on the average of each economy’s distance to frontier (DTF) scores for the 10 topics included in this year’s aggregate ranking. The distance to frontier score benchmarks economies with respect to regulatory practice, showing the absolute distance to the best performance in each Doing Business indicator. An economy’s distance to frontier score is indicated on a scale from 0 to 100, where 0 represents the worst performance and 100 the frontier. For the economies for which the data cover 2 cities, scores are a population-weighted average for the 2 cities. Source: Doing Business database.
Doing Business 2015 Israel 9 THE BUSINESS ENVIRONMENT Figure 1.3 Rankings on Doing Business topics - Israel (Scale: Rank 189 center, Rank 1 outer edge) Figure 1.4 Distance to frontier scores on Doing Business topics - Israel (Scale: Score 0 center, Score 100 outer edge) Note: The rankings are benchmarked to June 2014 and based on the average of each economy’s distance to frontier (DTF) scores for the 10 topics included in this year’s aggregate ranking. The distance to frontier score benchmarks economies with respect to regulatory practice, showing the absolute distance to the best performance in each Doing Business indicator. An economy’s distance to frontier score is indicated on a scale from 0 to 100, where 0 represents the worst performance and 100 the frontier. For the economies for which the data cover 2 cities, scores are a population-weighted average for the 2 cities. Source: Doing Business database.
Doing Business 2015 Israel 10
THE BUSINESS ENVIRONMENT
Just as the overall ranking on the ease of doing business tells Doing Business introduced the distance to frontier score. This
only part of the story, so do changes in that ranking. Yearly measure shows how far on average an economy is from the
movements in rankings can provide some indication of best performance achieved by any economy on each Doing
changes in an economy’s regulatory environment for firms, Business indicator.
but they are always relative.
Comparing the measure for an economy at 2 points in time
Moreover, year-to-year changes in the overall rankings do allows users to assess how much the economy’s regulatory
not reflect how the business regulatory environment in an environment as measured by Doing Business has changed
economy has changed over time—or how it has changed in over time—how far it has moved toward (or away from) the
different areas. To aid in assessing such changes, most efficient practices and strongest regulations in areas
covered by Doing Business (figure 1.5).
Figure 1.5 How far has Israel come in the areas measured by Doing Business?
Note: The distance to frontier score shows how far on average an economy is from the best performance achieved by any economy on
each Doing Business indicator since 2010, except for getting credit, paying taxes, protecting minority investors and resolving insolvency
which had methodology changes in 2014 and thus are only comparable to 2013. The measure is normalized to range between 0 and 100,
with 100 representing the best performance (the frontier). See the data notes starting on page 114 of the Doing Business 2015 report for
more details on the distance to frontier score.
Source: Doing Business database.Doing Business 2015 Israel 11
THE BUSINESS ENVIRONMENT
The absolute values of the indicators tell another part of regulation—such as a regulatory process that can be
the story (table 1.1). The indicators, on their own or in completed with a small number of procedures in a few
comparison with the indicators of a good practice days and at a low cost. Comparison of the economy’s
economy or those of comparator economies in the indicators today with those in the previous year may
region, may reveal bottlenecks reflected in large numbers show where substantial bottlenecks persist—and where
of procedures, long delays or high costs. Or they may they are diminishing.
reveal unexpected strengths in an area of business
Table 1.1 Summary of Doing Business indicators for Israel
United Kingdom DB2015
Best performer globally
United States DB2015
Denmark DB2015
Norway DB2015
Austria DB2015
Indicator
France DB2015
Israel DB2015
Israel DB2014
DB2015
Starting a Business
53 45 101 25 28 22 45 46 New Zealand (1)
(rank)
Starting a Business (DTF
90.54 90.47 83.42 93.40 93.00 94.03 91.23 91.22 New Zealand (99.96)
Score)
Procedures (number) 5.0 5.0 8.0 4.0 5.0 4.0 6.0 6.0 New Zealand (1.0)*
Time (days) 13.0 13.0 22.0 5.5 4.5 5.0 6.0 5.6 New Zealand (0.5)
Cost (% of income per
3.5 4.1 0.3 0.2 0.9 0.9 0.3 1.2 Slovenia (0.0)
capita)
Paid-in min. capital (%
0.0 0.0 13.6 14.5 0.0 5.0 0.0 0.0 112 Economies (0.0)*
of income per capita)
Dealing with
Hong Kong SAR,
Construction Permits 121 118 78 5 86 27 17 41
China (1)
(rank)
Dealing with
Hong Kong SAR,
Construction Permits 66.45 66.22 74.25 89.84 73.14 83.05 85.06 78.87
China (95.53)
(DTF Score)Doing Business 2015 Israel 12
United Kingdom DB2015
Best performer globally
United States DB2015
Denmark DB2015
Norway DB2015
Austria DB2015
Indicator
France DB2015
Israel DB2015
Israel DB2014
DB2015
Hong Kong SAR,
Procedures (number) 15.0 15.0 11.0 7.0 8.0 10.0 9.0 15.8
China (5.0)
Time (days) 209.0 209.0 192.0 64.0 183.0 122.5 105.0 78.6 Singapore (26.0)
Cost (% of warehouse
1.6 1.7 1.1 2.3 4.7 0.6 1.2 1.0 Qatar (0.0)*
value)
Getting Electricity
109 103 24 14 60 25 70 61 Korea, Rep. (1)
(rank)
Getting Electricity (DTF
71.11 71.10 87.75 91.07 79.87 87.44 78.42 79.52 Korea, Rep. (99.83)
Score)
Procedures (number) 6.0 6.0 5.0 4.0 5.0 4.0 4.0 4.8 12 Economies (3.0)*
Time (days) 102.0 102.0 23.0 38.0 79.0 66.0 126.0 89.6 Korea, Rep. (18.0)*
Cost (% of income per
11.8 13.8 101.6 114.9 42.9 11.9 90.1 25.5 Japan (0.0)
capita)
Registering Property
135 130 35 8 126 5 68 29 Georgia (1)
(rank)
Registering Property
57.12 57.11 81.07 92.61 59.36 94.12 72.55 82.92 Georgia (99.88)
(DTF Score)
Procedures (number) 6.0 6.0 3.0 3.0 8.0 1.0 6.0 4.4 4 Economies (1.0)*
Time (days) 81.0 81.0 20.5 4.0 49.0 3.0 21.5 15.2 3 Economies (1.0)*
Cost (% of property
7.3 7.3 4.6 0.6 6.1 2.5 4.6 2.4 4 Economies (0.0)*
value)
Getting Credit (rank) 36 30 52 23 71 61 17 2 New Zealand (1)
Getting Credit (DTF
65.00 65.00 60.00 70.00 50.00 55.00 75.00 95.00 New Zealand (100)
Score)
Strength of legal rights
6 6 5 8 4 5 7 11 3 Economies (12)*
index (0-12)Doing Business 2015 Israel 13
United Kingdom DB2015
Best performer globally
United States DB2015
Denmark DB2015
Norway DB2015
Austria DB2015
Indicator
France DB2015
Israel DB2015
Israel DB2014
DB2015
Depth of credit
7 7 7 6 6 6 8 8 23 Economies (8)*
information index (0-8)
Credit registry coverage
0.0 0.0 2.0 0.0 44.5 0.0 0.0 0.0 Portugal (100.0)
(% of adults)
Credit bureau coverage
100.0 100.0 53.2 7.8 0.0 100.0 100.0 100.0 23 Economies (100.0)*
(% of adults)
Protecting Minority
11 10 32 17 17 12 4 25 New Zealand (1)
Investors (rank)
Protecting Minority
70.83 70.83 63.33 67.50 67.50 70.00 78.33 65.83 New Zealand (81.67)
Investors (DTF Score)
Extent of conflict of
interest regulation 8.3 8.3 5.3 6.7 5.7 7.0 8.3 8.3 Singapore (9.3)*
index (0-10)
Extent of shareholder
governance index (0- 5.8 5.8 7.3 6.8 7.8 7.0 7.3 4.8 France (7.8)*
10)
Strength of minority
investor protection 7.1 7.1 6.3 6.8 6.8 7.0 7.8 6.6 New Zealand (8.2)
index (0-10)
United Arab Emirates
Paying Taxes (rank) 97 96 72 12 95 15 16 47
(1)*
Paying Taxes (DTF United Arab Emirates
71.88 72.00 76.36 91.94 72.12 90.80 90.52 80.84
Score) (99.44)*
Payments (number per Hong Kong SAR,
33.0 33.0 12.0 10.0 8.0 4.0 8.0 10.6
year) China (3.0)*
Time (hours per year) 235.0 235.0 166.0 130.0 137.0 83.0 110.0 175.0 Luxembourg (55.0)
Trading Across Borders
12 12 19 7 10 24 15 16 Singapore (1)
(rank)
Trading Across Borders 89.39 89.37 87.66 92.23 90.18 85.56 88.32 88.25 Singapore (96.47)Doing Business 2015 Israel 14
United Kingdom DB2015
Best performer globally
United States DB2015
Denmark DB2015
Norway DB2015
Austria DB2015
Indicator
France DB2015
Israel DB2015
Israel DB2014
DB2015
(DTF Score)
Documents to export
4 4 3 4 2 4 4 3 Ireland (2)*
(number)
Time to export (days) 10.0 10.0 10.0 6.0 10.0 8.0 8.0 6.0 5 Economies (6.0)*
Cost to export (US$ per
620.0 620.0 1,150.0 795.0 1,335.0 1,265.0 1,005.0 1,224.0 Timor-Leste (410.0)
container)
Cost to export (deflated
620.0 622.0 1,150.0 795.0 1,335.0 1,265.0 1,005.0 1,224.0
US$ per container)
Documents to import
4 4 4 3 2 5 4 5 Ireland (2)*
(number)
Time to import (days) 10.0 10.0 9.0 5.0 11.0 7.0 6.0 5.4 Singapore (4.0)
Cost to import (US$ per
565.0 565.0 1,215.0 745.0 1,445.0 1,140.0 1,050.0 1,289.0 Singapore (440.0)
container)
Cost to import (deflated
565.0 566.8 1,215.0 745.0 1,445.0 1,140.0 1,050.0 1,289.0
US$ per container)
Enforcing Contracts
111 111 5 34 10 8 36 41 Singapore (1)
(rank)
Enforcing Contracts
54.93 54.93 81.55 68.79 77.67 78.41 68.08 67.26 Singapore (89.54)
(DTF Score)
Time (days) 890.0 890.0 397.0 410.0 395.0 280.0 437.0 420.0 Singapore (150.0)
Cost (% of claim) 25.3 25.3 18.0 23.3 17.4 9.9 39.9 30.5 Iceland (9.0)
Procedures (number) 35.0 35.0 25.0 35.0 29.0 34.0 29.0 33.6 Singapore (21.0)*
Resolving Insolvency
24 23 16 9 22 8 13 4 Finland (1)
(rank)
Resolving Insolvency
75.21 74.81 78.84 84.59 75.94 85.62 82.04 90.12 Finland (93.85)
(DTF Score)Doing Business 2015 Israel 15
United Kingdom DB2015
Best performer globally
United States DB2015
Denmark DB2015
Norway DB2015
Austria DB2015
Indicator
France DB2015
Israel DB2015
Israel DB2014
DB2015
Time (years) 2.0 2.0 1.1 1.0 1.9 0.9 1.0 1.5 Ireland (0.4)
Cost (% of estate) 23.0 23.0 10.0 4.0 9.0 1.0 6.0 8.2 Norway (1.0)
Outcome (0 as
piecemeal sale and 1 as 1 1 1 1 1 1 1 1
going concern)
Recovery rate (cents on
61.4 60.6 82.6 87.5 77.2 92.3 88.6 80.4 Japan (92.9)
the dollar)
Strength of insolvency
13.5 13.5 11.0 12.0 11.0 11.5 11.0 15.0 5 Economies (15.0)*
framework index (0-16)
Note: DB2014 rankings shown are not last year’s published rankings but comparable rankings for DB2014 that capture the effects of such
factors as data corrections and changes to the methodology. Trading across borders deflated and non-deflated values are identical in
DB2015 because it is defined as the base year for the deflator. The best performer on time for paying taxes is defined as the lowest time
recorded among all economies in the DB2015 sample that levy the 3 major taxes: profit tax, labor taxes and mandatory contributions, and
VAT or sales tax. If an economy has no laws or regulations covering a specific area—for example, insolvency—it receives a “no practice”
mark. Similarly, an economy receives a “no practice” or “not possible” mark if regulation exists but is never used in practice or if a
competing regulation prohibits such practice. Either way, a “no practice” mark puts the economy at the bottom of the ranking on the
relevant indicator.
* Two or more economies share the top ranking on this indicator. A number shown in place of an economy’s name indicates the number
of economies that share the top ranking on the indicator. For a list of these economies, see the Doing Business website
(http://www.doingbusiness.org).
Source: Doing Business database.Doing Business 2015 Israel 16
STARTING A BUSINESS
Formal registration of companies has many WHAT THE STARTING A BUSINESS
immediate benefits for the companies and for
business owners and employees. Legal entities can INDICATORS MEASURE
outlive their founders. Resources are pooled as
several shareholders join forces to start a company. Procedures to legally start and operate a
Formally registered companies have access to company (number)
services and institutions from courts to banks as well
Preregistration (for example, name
as to new markets. And their employees can benefit
verification or reservation, notarization)
from protections provided by the law. An additional
benefit comes with limited liability companies. These Registration in the economy’s largest
limit the financial liability of company owners to their business city1
investments, so personal assets of the owners are not
Postregistration (for example, social security
put at risk. Where governments make registration
registration, company seal)
easy, more entrepreneurs start businesses in the
formal sector, creating more good jobs and Time required to complete each procedure
generating more revenue for the government. (calendar days)
What do the indicators cover? Does not include time spent gathering
information
Doing Business measures the ease of starting a
business in an economy by recording all procedures Each procedure starts on a separate day (2
officially required or commonly done in practice by procedures cannot start on the same day).
an entrepreneur to start up and formally operate an Procedures that can be fully completed
industrial or commercial business—as well as the online are recorded as ½ day.
time and cost required to complete these procedures. Procedure completed once final document is
It also records the paid-in minimum capital that received
companies must deposit before registration (or
within 3 months). The ranking of economies on the No prior contact with officials
ease of starting a business is determined by sorting Cost required to complete each procedure
their distance to frontier scores for starting a (% of income per capita)
business. These scores are the simple average of the
distance to frontier scores for each of the component Official costs only, no bribes
indicators. No professional fees unless services required
To make the data comparable across economies, by law
Doing Business uses several assumptions about the Paid-in minimum capital (% of income
business and the procedures. It assumes that all per capita)
information is readily available to the entrepreneur
and that there has been no prior contact with Deposited in a bank or with a notary before
officials. It also assumes that the entrepreneur will registration (or within 3 months)
pay no bribes. And it assumes that the business:
Is a limited liability company, located in the Has a start-up capital of 10 times income per
largest business city and is 100% domestically capita.
owned1.
Has a turnover of at least 100 times income per
Has between 10 and 50 employees. capita.
Conducts general commercial or industrial Does not qualify for any special benefits.
activities.
Does not own real estate.
1
For the 11 economies with a population of more than 100 million, data for a second city have been added.Doing Business 2015 Israel 17 STARTING A BUSINESS Where does the economy stand today? What does it take to start a business in Israel? According business city of an economy, except for 11 economies for to data collected by Doing Business, starting a business which the data are a population-weighted average of the there requires 5.0 procedures, takes 13.0 days, costs 3.5% 2 largest business cities. See the chapter on distance to of income per capita and requires paid-in minimum frontier and ease of doing business ranking at the end of capital of 0.0% of income per capita (figure 2.1). Most this profile for more details. indicator sets refer to a case scenario in the largest Figure 2.1 What it takes to start a business in Israel Paid-in minimum capital (% of income per capita): 0.0 Note: Time shown in the figure above may not reflect simultaneity of procedures. Online procedures account for 0.5 days in the total time calculation. For more information on the methodology of the starting a business indicators, see the Doing Business website (http://www.doingbusiness.org). For details on the procedures reflected here, see the summary at the end of this chapter. Source: Doing Business database.
Doing Business 2015 Israel 18 STARTING A BUSINESS Globally, Israel stands at 53 in the ranking of 189 average ranking provide other useful information for economies on the ease of starting a business (figure 2.2). assessing how easy it is for an entrepreneur in Israel to The rankings for comparator economies and the regional start a business. Figure 2.2 How Israel and comparator economies rank on the ease of starting a business Source: Doing Business database.
Doing Business 2015 Israel 19
STARTING A BUSINESS
Economies around the world have taken steps making it they often are part of a larger regulatory reform
easier to start a business—streamlining procedures by program. Among the benefits have been greater firm
setting up a one-stop shop, making procedures simpler satisfaction and savings and more registered businesses,
or faster by introducing technology and reducing or financial resources and job opportunities.
eliminating minimum capital requirements. Many have
What business registration reforms has Doing Business
undertaken business registration reforms in stages—and
recorded in Israel (table 2.1)?
Table 2.1 How has Israel made starting a business easier—or not?
By Doing Business report year from DB2010 to DB2015
DB year Reform
Israel made starting a business easier by reducing the time
DB2014 required for registration at the Income Tax Department and
the National Insurance Institute.
Note: For information on reforms in earlier years (back to DB2005), see the Doing Business reports
for these years, available at http://www.doingbusiness.org.
Source: Doing Business database.Doing Business 2015 Israel 20
STARTING A BUSINESS
What are the details?
Underlying the indicators shown in this chapter for
STANDARDIZED COMPANY
Israel is a set of specific procedures—the bureaucratic
and legal steps that an entrepreneur must complete
to incorporate and register a new firm. These are Legal form: Private limited company
identified by Doing Business through collaboration
with relevant local professionals and the study of Paid in minimum capital requirement: ILS 0
laws, regulations and publicly available information City: Tel Aviv
on business entry in that economy. Following is a
detailed summary of those procedures, along with Start-up Capital: 10 times GNI per capita
the associated time and cost. These procedures are
those that apply to a company matching the
standard assumptions (the “standardized company”)
used by Doing Business in collecting the data (see the
section in this chapter on what the indicators
measure).
Table 2.2 Summary of time, cost and procedures for starting a business in Israel
Time to
No. Procedure Cost to complete
complete
Obtain company registration documents certified by an 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.
1 The company's initial Articles of Association must be signed by the 3 days NIS 1,824 + VAT
initial shareholders and their signature needs to be authenticated by an (recommended
attorney. minimum fee by
the Israeli Bar)
Agency: Attorney
File with the registrar of companies, Ministry of Justice
To register a company, the promoter must:
1) File the articles of association;
NIS 2,591 + NIS 4
2) The directors must sign a declaration stating that they have the for each page in the
2 2 days
capacity to serve and their signatures must be authenticated by an Articles of
attorney; Association
3) 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.Doing Business 2015 Israel 21
Time to
No. Procedure Cost to complete
complete
Agency: Ministry of Justice
Register for taxes at Ministry of Finance, Income Tax Department
To register for company taxation, the promoter must file the company
deed and identity certificate of registration. Final registration
3 confirmation may take up to 28 days. 7 days no charge
Agency: Ministry of Finance
* Register for VAT at Ministry of Finance, Customs and VAT
Department
The regional VAT office also operates under Ministry of Finance. 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 asks for a bank account for VAT refund 1 day,
purposes (or for VAT payment). It takes a few minutes to open a bank simultaneous with no charge
4
account, assuming that the company provided all required documents,
procedure 3
including a company resolution to open the account and the rights of
signature. There are no fees to open the account, but bank
commissions may vary according to the bank and bank account
features.
Agency: Ministry of Finance
* Register with the National Insurance Institute
The National Insurance Institute program covers all gainfully employed
individuals, with provisions including social security, unemployment 7 days,
insurance, severance payment, training funds, health insurance, and simultaneous with
5 no charge
pensions. previous
procedure
Agency: National Insurance Institute
* Takes place simultaneously with another procedure.
Note: Online procedures account for 0.5 days in the total time calculation.
Source: Doing Business database.Doing Business 2015 Israel 22
DEALING WITH CONSTRUCTION PERMITS
Regulation of construction is critical to protect the WHAT THE DEALING WITH CONSTRUCTION
public. But it needs to be efficient, to avoid excessive
PERMITS INDICATORS MEASURE
constraints on a sector that plays an important part in
every economy. Where complying with building
regulations is excessively costly in time and money, Procedures to legally build a warehouse
many builders opt out. They may pay bribes to pass (number)
inspections or simply build illegally, leading to Submitting all relevant documents and
hazardous construction that puts public safety at risk. obtaining all necessary clearances, licenses,
Where compliance is simple, straightforward and permits and certificates
inexpensive, everyone is better off. Submitting all required notifications and
What do the indicators cover? receiving all necessary inspections
Doing Business records the procedures, time and cost Obtaining utility connections for water and
for a business in the construction industry to obtain sewerage
all the necessary approvals to build a warehouse in Registering the warehouse after its
the economy’s largest business city, connect it to completion (if required for use as collateral or
basic utilities and register the warehouse so that it for transfer of the warehouse)
can be used as collateral or transferred to another Time required to complete each procedure
entity. (calendar days)
The ranking of economies on the ease of dealing with Does not include time spent gathering
construction permits is determined by sorting their information
distance to frontier scores for dealing with
Each procedure starts on a separate day.
construction permits. These scores are the simple
Procedures that can be fully completed online
average of the distance to frontier scores for each of
are recorded as ½ day.
the component indicators.
Procedure considered completed once final
To make the data comparable across economies, document is received
Doing Business uses several assumptions about the
business and the warehouse, including the utility No prior contact with officials
connections. Cost required to complete each procedure (%
The business: of warehouse value)
Official costs only, no bribes
Is a limited liability company operating in
the construction business and located in Will have complete architectural and
the largest business city. For the 11 technical plans prepared by a licensed
economies with a population of more than architect or engineer.
100 million, data for a second city have
Will be connected to water and sewerage
been added. Is domestically owned and
(sewage system, septic tank or their
operated.
equivalent). The connection to each utility
Has 60 builders and other employees. network will be 150 meters (492 feet) long.
The warehouse: Will be used for general storage, such as of
books or stationery (not for goods requiring
Is valued at 50 times income per capita.
special conditions).
Is a new construction (there was no
Will take 30 weeks to construct (excluding all
previous construction on the land).
delays due to administrative and regulatory
requirements).Doing Business 2015 Israel 23 DEALING WITH CONSTRUCTION PERMITS Where does the economy stand today? What does it take to comply with the formalities to build an economy, except for 11 economies for which the data a warehouse in Israel? According to data collected by are a population-weighted average of the 2 largest Doing Business, dealing with construction permits there business cities. See the chapter on distance to frontier requires 15.0 procedures, takes 209.0 days and costs and ease of doing business ranking at the end of this 1.6% of the warehouse value (figure 3.1). Most indicator profile for more details. sets refer to a case scenario in the largest business city of Figure 3.1 What it takes to comply with formalities to build a warehouse in Israel Note: Time shown in the figure above may not reflect simultaneity of procedures. Online procedures account for 0.5 days in the total time calculation. For more information on the methodology of the dealing with construction permits indicators, see the Doing Business website (http://www.doingbusiness.org). For details on the procedures reflected here, see the summary at the end of this chapter. Source: Doing Business database.
Doing Business 2015 Israel 24 DEALING WITH CONSTRUCTION PERMITS Globally, Israel stands at 121 in the ranking of 189 economies and the regional average ranking provide economies on the ease of dealing with construction other useful information for assessing how easy it is for permits (figure 3.2). The rankings for comparator an entrepreneur in Israel to legally build a warehouse. Figure 3.2 How Israel and comparator economies rank on the ease of dealing with construction permits Source: Doing Business database.
Doing Business 2015 Israel 25
DEALING WITH CONSTRUCTION PERMITS
What are the details?
The indicators reported here for Israel are based on a
BUILDING A WAREHOUSE
set of specific procedures—the steps that a company
must complete to legally build a warehouse—
identified by Doing Business through information Estimated cost of
collected from experts in construction licensing, ILS 6,402,277
construction :
including architects, civil engineers, construction
lawyers, construction firms, utility service providers
City : Tel Aviv
and public officials who deal with building
regulations. These procedures are those that apply The procedures, along with the associated time and cost,
to a company and structure matching the standard are summarized below.
assumptions used by Doing Business in collecting the
data (see the section in this chapter on what the
indicators cover).
Table 3.2 Summary of time, cost and procedures for dealing with construction permits in Israel
Time to
No. Procedure Cost to complete
complete
File a request for information regarding the land
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
1 committee engineer and sent back to BuildCo, together with the 30 days ILS 193
requested information.
Agency: Municipality
* Obtain survey of the land and land extract by authorized
surveyor
BuildCo must hire an authorized surveyor who inspects the site, marks
the plots and gives BuildCo the survey of the land. The authorized
2 surveyor also obtains the land extract from the Land Registry on behalf 7 days ILS 1,710
of BuildCo.
Agency: Authorized Surveyor
Obtain building permit from 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 135 days ILS 42,556
3
• 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.Doing Business 2015 Israel 26
Time to
No. Procedure Cost to complete
complete
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.
Agency: Local Committee
Obtain marking report from authorized surveyor
4 7 days no charge
Agency: Authorized Surveyor
Receive concrete inspection
The concrete inspection takes place during construction. The certified
laboratory can conduct several inspections during construction to test
the quality of the concrete, the system of pipes, and the sanitation 1 day no charge
5
plans. Only three inspections are included in this case.
Agency: Certified Laboratory
Receive pipe inspection
6 1 day no charge
Agency: Certified Laboratory
Receive sanitation inspection
7 1 day no charge
Agency: Certified Laboratory
Obtain certification from certified laboratory
BuildCo must obtain certification from a certified laboratory regarding:
• The quality of the concrete
• The pipe system
8 • Sanitation plans 1 day no charge
Agency: Certified LaboratoryDoing Business 2015 Israel 27
Time to
No. Procedure Cost to complete
complete
File an application for certificate of completion
An authorized engineer or architect conducts several inspections during
the construction period and produces reports on the outline of the
building, the foundations, the frame, and on completion of the
building. These reports are submitted when filing for the certificate of
9 completion. The application must be signed by BuildCo, the engineer, 1 day no charge
and the architect.
Agency: Local Committee
Receive inspection from the Fire Department
10 1 day no charge
Agency: Fire Department
Obtain certification from the Fire Department
11 2 days no charge
Agency: Fire Department
Receive final inspection from the local authority
Before issuing the final certification, the local authority inspects the
building. 1 day no charge
12
Agency: Local Authority
Obtain certification of completion
13 7 days no charge
Agency: Local Authority
Obtain occupancy certificate
All the documents listed in previous procedures should be attached to
the application for an occupancy certificate. This certificate is required
14 for installing water and electricity. 7 days no charge
Agency: Local AuthorityDoing Business 2015 Israel 28
Time to
No. Procedure Cost to complete
complete
Obtain water and sewage connection
The cost of installing water and sewerage connections ranges from ILS
2,000.00 to more than approximately ILS 60,000.00, depending on the
15 specific installation requirements. 14 days ILS 57,000
Agency: Israel Water Company (MEKOROT)
* Takes place simultaneously with another procedure.
Note: Online procedures account for 0.5 days in the total time calculation.
Source: Doing Business database.Doing Business 2015 Israel 29
GETTING ELECTRICITY
Access to reliable and affordable electricity is vital for WHAT THE GETTING ELECTRICITY
businesses. To counter weak electricity supply, many
firms in developing economies have to rely on self- INDICATORS MEASURE
supply, often at a prohibitively high cost. Whether
electricity is reliably available or not, the first step for Procedures to obtain an electricity
a customer is always to gain access by obtaining a connection (number)
connection.
Submitting all relevant documents and
What do the indicators cover? obtaining all necessary clearances and permits
Doing Business records all procedures required for a Completing all required notifications and
local business to obtain a permanent electricity receiving all necessary inspections
connection and supply for a standardized warehouse,
as well as the time and cost to complete them. These Obtaining external installation works and
procedures include applications and contracts with possibly purchasing material for these works
electricity utilities, clearances from other agencies Concluding any necessary supply contract and
and the external and final connection works. The obtaining final supply
ranking of economies on the ease of getting
electricity is determined by sorting their distance to Time required to complete each procedure
frontier scores for getting electricity. These scores are (calendar days)
the simple average of the distance to frontier scores Is at least 1 calendar day
for each of the component indicators. To make the
data comparable across economies, several Each procedure starts on a separate day
assumptions are used. Does not include time spent gathering
The warehouse: information
Is owned by a local entrepreneur, located Reflects the time spent in practice, with little
in the economy’s largest business city, in follow-up and no prior contact with officials
an area where other warehouses are Cost required to complete each procedure
located. For the 11 economies with a (% of income per capita)
population of more than 100 million, data
Official costs only, no bribes
for a second city have been added.
Excludes value added tax
Is not in a special economic zone where
the connection would be eligible for
subsidization or faster service. Is to either the low-voltage or the medium-
voltage distribution network and either
Is located in an area with no physical
overhead or underground, whichever is more
constraints (ie. property not near a railway).
common in the area where the warehouse is
Is a new construction being connected to located. Included only negligible length in the
electricity for the first time. customer’s private domain.
Is 2 stories, both above ground, with a total Requires crossing of a 10-meter road but all
surface of about 1,300.6 square meters the works are carried out in a public land, so
(14,000 square feet), is built on a plot of there is no crossing into other people's
929 square meters (10,000 square feet), is private property.
used for storage of refrigerated goods
Involves installing one electricity meter. The
The electricity connection: monthly electricity consumption will be
26880 kilowatt hour (kWh). The internal
Is 150 meters long and is a 3-phase, 4-wire
electrical wiring has been completed.
Y, 140-kilovolt-ampere (kVA) (subscribed
capacity) connection.Doing Business 2015 Israel 30
GETTING ELECTRICITY
Where does the economy stand today?
What does it take to obtain a new electricity connection Most indicator sets refer to a case scenario in the largest
in Israel? According to data collected by Doing Business, business city of an economy, except for 11 economies for
getting electricity there requires 6.0 procedures, takes which the data are a population-weighted average of the
102.0 days and costs 11.8% of income per capita (figure 2 largest business cities. See the chapter on distance to
4.1). frontier and ease of doing business ranking at the end of
this profile for more details.
Figure 4.1 What it takes to obtain an electricity connection in Israel
Note: Time shown in the figure above may not reflect simultaneity of procedures. For more information on the methodology of the
getting electricity indicators, see the Doing Business website (http://www.doingbusiness.org). For details on the procedures reflected
here, see the summary at the end of this chapter.
Source: Doing Business database.Doing Business 2015 Israel 31 GETTING ELECTRICITY Globally, Israel stands at 109 in the ranking of 189 average ranking provide another perspective in assessing economies on the ease of getting electricity (figure 4.2). how easy it is for an entrepreneur in Israel to connect a The rankings for comparator economies and the regional warehouse to electricity. Figure 4.2 How Israel and comparator economies rank on the ease of getting electricity Source: Doing Business database.
Doing Business 2015 Israel 32
GETTING ELECTRICITY
What are the details?
The indicators reported here for Israel are based on a set
OBTAINING AN ELECTRICITY CONNECTION
of specific procedures—the steps that an entrepreneur
must complete to get a warehouse connected to
electricity by the local distribution utility—identified by The Israel Electric
Name of utility:
Doing Business. Data are collected from the distribution Corporation Ltd.
utility, then completed and verified by electricity
regulatory agencies and independent professionals such City: Tel Aviv
as electrical engineers, electrical contractors and
The procedures are those that apply to a warehouse and
construction companies. The electricity distribution utility electricity connection matching the standard
surveyed is the one serving the area (or areas) in which assumptions used by Doing Business in collecting the
warehouses are located. If there is a choice of data (see the section in this chapter on what the
distribution utilities, the one serving the largest number indicators cover). The procedures, along with the
of customers is selected. associated time and cost, are summarized below.
Table 4.2 Summary of time, cost and procedures for getting electricity in Israel
Time to
No. Procedure Cost to complete
complete
Submit an application to the Israel Electric Corporation and await an
initial estimate
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: building permit, accurate information
concerning the required power connection, building specifications, the
location of the building, designation of the business and date when the
power is requested. 11 calendar days ILS 0
1
After getting all the essential information from the customer concerning
the connection, the Israel Electric Corporation would indicate the initial
expected costs. Along with the response, IEC would attach a bill for 10%
of the initial estimate costs (“advance payment”).
Agency: The Israel Electric Corporation Ltd.
Await completion of a technical coordination of the project from
the Israel Electric Corporation
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, Israel Electric Corporation opens an order file and 30 calendar days ILS 0
2
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 finalDoing Business 2015 Israel 33
Time to
No. Procedure Cost to complete
complete
estimate.
At the completion of the technical coordination process, the IEC would
send to the customer a bill for 70% of the final estimate.
Agency: The Israel Electric Corporation Ltd.
* Await and obtain an inspection of the site by the Israel Electric
Corporation
An external inspection carried out by the Israel Electric Corporation is
required during the technical coordination. Someone from the 3 calendar days ILS 0
3
applicant's party has to be present for the inspection.
Agency: The Israel Electric Corporation Ltd.
Await completion of the external connection works by the Israel
Electric Corporation
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 60 calendar days ILS 14,602.9
4
Israel Electric Corporation expense.
Underground connection is the only available option.
Agency: The Israel Electric Corporation Ltd.
* Obtain a permit for electricity supply from the Local Committee
for Planning and Building
At some point in the process before electricity can start flowing the
customer has to obtain a permit for electricity supply. According to sec.
157A of the Planning and Building Law 1965 – 5725 the Israel Electric
Corporation cannot start supplying electricity without this permit. The
Local Committee for Building and Planning would grant the permit if the
customer's premises comply with the building permit. The request
5 should be submitted by the customer's licensed architect along with an 20 calendar days ILS 0
affidavit declaring the compliance with the building permit. The relevant
forms for the request are attached to the Planning and Building
Regulations (permits for providing electricity, water and phone services),
1981-5741. The permit can be requested before the completion of the
external connection works.
Agency: Local Committee for Planning and BuildingDoing Business 2015 Israel 34
Time to
No. Procedure Cost to complete
complete
Await and obtain an inspection of the internal wiring, meter
installation and final connection
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
6 conducted immediately after their completion. The electrician should be 1 calendar day ILS 464.35
present during the inspection.
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.
Agency: The Israel Electric Corporation Ltd.
* Takes place simultaneously with another procedure.
Source: Doing Business database.You can also read
