When Aliyah Meets Real Life

An American’s Guide to Working and Doing Business in Israel

We come to Eretz Yisrael idealistic, with a love for the land and excitement to connect to that special something - the אווירא דארץ ישראל. We imagine living every day with the same thrill we experience when visiting in the past.

But those first halo-colored days quickly settle into routine, and the daily grind sets in.

Where do we shop? The local מכולת, the scramble of משנת יוסף, or maybe it's better to go to the "big" stores like שערי רווחה, רמי לוי or אושר עד?

Where do we send the kids to school? The standard Israeli system or maybe something that feels more comfortable to our American background?

How do we get around? Should we buy a car, take a City Car, buses, trains, taxis - how much public transportation can we handle?

Then, there's the big question: How do I support my family?

There are job opportunities on both sides of the ocean. There are night hours vs. day hours. Is it better to get paid with a telush (what's that?) or to get paid in dollars?

For business owners - or someone who wants to start a business - the questions become more complex.

Can people pay me in the US and Israel?

Do I need to file taxes in both countries?

What type of entity do I need in Israel and what about in the US?

Can I hire employees in both countries? What are my responsibilities toward them?

How do I avoid unnecessarily paying taxes twice?

How do I set my pricing - dollars or shekels?

What is VAT/M'aam and why is it so high?

There are so many questions and nuances that it can quickly start to feel too overwhelming.

Some companies find workarounds. They may exist only as a U.S. entity and piggyback on an Israeli company, having that company pay their Israeli employees.

Other companies end up setting up an office in Israel, paying employees in USD, and later discover that the way they've structured their operations created legal, tax, and employment risks. For example, the company is not allowed to have an office with a certain number of employees without having an entity, and suddenly dozens of employees find themselves without jobs.

When the terminology is causing your head to spin - where do you start?

The good news is: you don't have to know everything now and you don't have to do it alone.

What you do need to know is what to ask and who to ask.

We work with businesses navigating the financial realities of operating a business with activity in both the U.S. and Israel, and we see these questions come up all the time. In this series, we'll be breaking down many of the topics that Americans living and doing business in Israel regularly encounter.

We’ll cover questions around managing a business in both the U.S. and Israel, sales tax, VAT, double taxation, Bituach Leumi, accurate bookkeeping, opening a company, payroll, employee laws, and many of the other financial and operational questions that come up from Americans living in Israel.

We'd also love to hear your experiences and questions.

Please contribute in the comments.