About to do business in Israel? A Short General Guide* on Finding Information on the Financial Standing of Individuals and Corporations in Israel (by Attorney Yehuda Landau**)

 

Corporations:

General information regarding a corporation (such as its address, shareholders, directors and whether the company has submitted its annual report to the authorities) can be retrieved from the website of the Corporations Authority (the Ministry of Justice) www.gov.il/en/service/company_extract.

Information pertaining to corporations that are traded in the Tel Aviv Stock Exchange including quarterly / annual financial reports and immediate reports, is available in the TASE website maya.tase.co.il .Often, review of financial news websites on the Internet (in Hebrew and rather partially in English) will reveal relevant information (if available) e.g. The Marker (financial news of "Haaretz"), Globes, Calcalist .

In addition, it is possible to search in legal databases whether a corporation (or an individual) is involved in litigation, especially if a judgment is rendered. The existence of the legal procedure, the parties and the judgement, if rendered, are usually publicly available. In general, pleadings and minutes of the hearings / evidence are not made public.

Corporations which manage a database are required to be registered in the Database Registry and certain information is available in their regard. The same applies to corporations that are engaged in construction as they must be registered in the Contractors Registry.

In certain specific lines of business (real estate, high-tech, healthcare, certain manufacturing activity, etc.) it may also be possible to trace additional information on the business activity of a corporation from the database pertaining to that line of business.

When information on the credit worthiness of a corporation is required it is advisable to contact a licensed Authorized Business Information Bureaus which monitor credit information for any incorporated business which is registered with the Israel Tax Authority. There are currently (7/2020) two such bureaus (www.bdicoface.co.il/en/, www.dbisrael.co.il/en/). Alternatively, one can contact business rating companies.

To obtain general corporate rating, both Standard & Poor's (www.maalot.co.il/) and Moody's (www.midroog.co.il) have subsidiaries in Israel.

 Another option would be to ask the many companies specializing in business intelligence to conduct a specific investigation into a specific company. This is usually conducted without the target company's knowledge. If performed with its knowledge, then a standard due diligence process can be carried out with the assistance of a law firm or a Certified Public Accountant.

 

Individuals:

While some of the suggestions above relating to corporations are relevant also to individuals, there are some privacy laws restricting gathering of information on individuals.

Financial news websites and legal databases are relevant for individuals as well. However, matters adjudged in the Family Courts (including parties names) are not open to the public.

There are certain categories of private service providers such as lawyers, psychologists, engineers and architects, real-estate brokers, financial advisors and medical professionals about which additional information is available as they are registered in their respective official professional registries.

 

Individuals' Credit Worthiness:

Unlike Switzerland where one can obtain an extract from the debt collection registry (Betreibungsregisterauszug / registre des poursuites / registro delle esecuzioni) debt collection processes are different in Israel. Moreover, there is now in Israel a new central registry (which started its activity in 2019) that enables any grantor of credit to receive, through one of the licensed credit bureaus (www.dbisrael.co.il/en/, www.bdicoface.co.il/en/, www.directscore.co.il/) credit data of individuals (not corporations). This database is managed by the Bank of Israel (the State's central bank) (“the Central Database”).

Until 2019, information regarding financial difficulties was limited to information on bankruptcy procedures in respect of individuals and liquidation of corporations. Individuals could also be registered but only if collection procedure against them proved difficult (such as "debtor limited in resources" in accordance with a judicial decision by the Execution Bureau). For additional information a creditor (or a contractual party / credit provider) had to contact business intelligence service providers.

With the recent legislative changes, the implementation of the new Credit Data Law -2016 and the creation of the Central Database, licensed "Credit Bureaus" were established, enabling credit providers to receive additional information on individuals from a database that did not previously exist. If the business relationship is not that of providing credit - see below.

The Central Database is fed from several reliable sources such as the official Receiver General (supervising insolvency processes), the law courts, Execution Bureaus, banks, credit card issuers and other providers of consumer credit, the Electric Company etc. The list is not exhaustive and the Minister of Justice can add (and delete) therefrom.

Nevertheless, a person who is not interested that his details will be kept in the Central Database may prevent it by submitting a request, unless) there is evidence of distinct failure to pay debts

There are a few conditions that must be met in order for a Credit Bureau to provide a credit report, such as: the information must be required for a credit transaction (that is not by definition low risk) or to guarantee a transaction, and the consent of the customer to provide this information is required. It should be noted that information is provided not only to the Credit Bureaus but also to the bodies that regularly provide information to the Central Database.

A Bureau can also give a "Credit Indication" which is not a full report but only an indication of whether to give a customer credit or not, based on the information from the database showing the customer is not clearly avoiding paying his debts.

The information relates to the last 3 years and is not to be relied on if older than 60 days. For the purposes of a Credit Report information regarding the gender, age, sexual orientation, race, religion, country of origin, nationality, place of residence and family or health condition of a client may not be brought into account.

The information provided is confidential and may not be held after the period for which the credit agreement is valid, and if no credit was provided, for a period longer than 60 days.

 

Final remarks:

Generally speaking, there is an abundance of information in the Internet on "doing business in Israel" which may be useful in order to obtain an idea on the differences in business culture and attitude between Switzerland and Israel (one should bear in mind that this is very often subjective to the writer and his personal experience).

Although Israel is a member of the OECD and has adapted much of its institutions to suit the standards the organization, it should be noted that much of the information referred above is in Hebrew, websites' English sections rarely contain all the information available in the Hebrew segments and some of the websites / databases are open only to subscribers. All official reports / extracts are provided for a fee.

 


* This general information is given as a service to the members of the Swiss-Israel Chamber of Commerce and is not legal advice.
** The writer of this info page, an Israeli lawyer with more than 30 years' experience, is the resident partner managing the Zurich branch (in existence since 1998) of the Israeli law firm of Rosenberg Abramovich Schneller - ROSAK (www.rosak-law.com).