New Procedure for Work Permits and Visas For Foreign Experts

New Procedure for Work Permits and Visas For Foreign Experts

We wish to call to your attention to a new procedure which consolidates the various directives regarding permits and visas for the employment of foreign experts in Israel published on December 13, 2015.

Israel Population and Immigration Authority Procedure 5.3.0041 (the “New Procedure”) sets out stricter criteria relating to the classification of foreign experts including but not limited to increased scrutiny of salary and wage requirements, revised application procedures and additional documentary requirements for foreign experts, and changes to the process for accompanying family members of foreign experts as follows:

Base Salary Of Foreign Experts

The New Procedure establishes that the base salary of a foreign expert must not fall below twice the average salary in the labor market for a salaried employee, other than in extraordinary cases. In accordance with the New Procedure, the base salary shall not include payments for overtime hours or shifts. Moreover, payments for housing and other associated payments shall not be calculated as part of the base salary.

Workers in Fields Which Do Not Require Attainment of an Academic Degree

The New Procedure distinguishes between foreign experts working in fields which require academic degrees as a minimum entry requirement, and foreign experts working in fields which do not require academic degrees. It is yet unclear whether this distinction applies to foreign experts who do not hold academic degrees or to foreign experts working in areas which by definition do not require the attainment of an academic degree (Ex: construction work performed by foreign experts who are artists by profession). In light of the explanation set out in the relevant affidavit, we believe that the intent of the procedure relates to foreign experts working in fields which do not require the attainment of an academic degree such as welders, floorers, carpenters and ethnic chefs. In this regard, we intend to approach the Head of the Population and Immigration Authority for further clarification with regard to this and other matters included in the New Procedure.

With respect to applications for foreign experts in fields which do not require attainment of an academic degree, the Foreign Workers Unit of the Population and Immigration Authority (the “Foreign Workers Unit”) is permitted to demand, inter alia, deposit of a bond to ensure payment of the foreign expert’s salary; various documentation ensuring that the foreign expert did not pay an agent for the purposes of entering Israel; an attorney confirmation that the employment agreement is an accordance with Israeli labor law, as well as additional documentation given the need.

Submission of the application is contingent upon the employer’s obligation to deposit the foreign expert’s salary into a bank account in Israel in which no third party other than the foreign expert or his/her authorized representative has authority to conduct transactions. The employer will further be obligated to maintain on a permanent basis, all bank confirmations evidencing deposits made for salary payments. Given the need, the employer may be requested to present the bank confirmations as evidence of such deposits.

Changes Regarding Required Documentation For Work Permit Applications

In accordance with the New Procedure, there have been a number of changes with regard to the required documentation which must be submitted to the Foreign Workers Unit within the scope of a work permit application.

1. The relevant affidavit. There have been changes to the text of all required affidavits such that each affidavit must pertain to the specific employee for whom the application is being submitted.
2. In cases where the sponsor is a foreign corporation without a corporate presence in Israel, the employer must attach a power of attorney executed and signed at an Israeli consulate abroad authorizing an Israeli agent to submit and handle all aspects of the application on behalf of the foreign employer.
3. Employers submitting applications for foreign experts in fields which do not require attainment of an academic degree are required to attach confirmations evidencing lawful employment.
4. Every application submitted by an employer who already employs foreign experts must attach an accountant’s confirmation for each individual worker which confirms payment of the proffered wages during the past year for all foreign experts employed by such employer. The Foreign Worker’s Unit is permitted to allow employers to submit one confirmation for a number of applications submitted within a consecutive 6 month period.
5. In cases of work permit extension requests for foreign experts in fields which do not require attainment of an academic degree, the employer must attach copies of pay stubs and confirmations of deposit to an Israeli bank account in the foreign expert’s name, in addition to a confirmation from the bank that no one other than the foreign expert or his/her authorized representative has conducted transactions within the account.

Changes Regarding the Process For Obtaining Work Visas

Following approval of a work permit for the employment of a foreign expert, the employer is required to approach the local office of the Population and Immigration Authority in accordance with the details listed on the permit in order to secure the work visa. During this stage, applications for dependent immediate family members including citizens of visa waiver countries are submitted for the purpose of authorizing their admission to Israel.

Admission to Israel of dependent family members of foreign experts working in fields which do not require attainment of academic degrees will not be automatic, and will be subject to the discretion of a Population and Immigration Authority officer. Original, certified documentation of the familial relationship must be submitted at this time.

In the event that the permit is approved, the employee will be required to approach the relevant Israeli consulate where consular notification was requested, and present the following documentation:

1. An original police clearance certificate issued within the last year.
2. A medical examination performed at a medical institution recognized by the Israeli consulate within the 3 months preceding submission of the application.

We will of course continue to update you on additional developments.

As always, we remain at your disposal with regard to matters contained in this client update and any other matters relating to Israeli immigration.

45 Day Working Visa in Israel

Visa Update: The Experimental Procedure for a 45 Day Working Visa in Israel

 

We would like to draw your attention to a new procedure regarding work permits and visas for up to 45 days issued by the Population and Immigration Authority (the “Immigration Authority”).

The updated procedure is an experimental, expedited procedure which allows entities to apply for foreign experts to come to Israel for up to 45 days during a calendar year, commencing from the first entry of the foreign expert into Israel.

It should be noted that the previous procedure allowed for applications to be made for stays of up to 30 days only. The Updated Procedure will be valid until July 31, 2016.

The Updated Procedure states that it will not be possible to submit a parallel application to employ a foreign expert in Israel for a period of more than 45 days whilst the expert is still in Israel. Any such application submitted during this time will be rejected.

It is unclear as to whether or not an application for permits of more than 45 days will be considered where they are submitted during the same calendar year in which the foreign expert already received a visa and permit for up to 45 days (assuming that the foreign expert has already left Israel).

In this regard, our firm has approached the Permit Unit of the Immigration Authority and has been informed that unlike the previous procedure, it will consider applications for long term permits, again, providing the employee has left Israel when the long term visa application is submitted.

As this issue has not yet been fully determined, we will obviously monitor any developments and provide updates, as necessary.

It should be further noted that the Updated Procedure refers to a new but unpublished procedure which we anticipate will consolidate and set out the entire procedure for obtaining long term visas.

According to the current practice on this matter, an application may be submitted for a visa of up to 45 days on a consecutive basis or for a shorter period. It is possible to obtain a multiple entry visa which allows the foreign expert to enter and leave Israel on an unrestricted basis during the period of the visa.

In cases where an application is submitted for less than 45 days, it will be possible to submit requests for additional periods for permits and visas, as long as the accumulated period will not exceed 45 days during a calendar year. In addition, where an employee has not stayed in Israel for the entire 45 day period (irrespective of whether the visa was issued for that long), it will be possible to submit additional applications for the remaining period until the expiration of the 45 day period.

It should be emphasized that this is an experimental procedure and accordingly, is subject to change by the Immigration Authority without prior notice.

This type of work permit and visa is suitable only for a foreign expert from a country which is exempted from the requirement to obtain a visa to Israel prior to his/her arrival in Israel. In addition, the expert must be needed in Israel for a short period and for a temporary assignment, such as for advising, supervising, repairing equipment supplied by a non-Israeli company, lecturing, providing instructions, or other matters which require special “know how” or expertise from the foreign expert.

An application for a 45 day visa under the Updated Procedure can be submitted by a local Israeli company, a partnership or an individual authorized by the authorities to conduct business (i.e. not through a company). A foreign company, which does not have a branch or representative office in Israel, is required to issue a power of attorney signed before an Israeli formal representative certified by an Israeli Consul or an Israeli Embassy, or before a notary public and certified with an Apostille (for countries which are members of the Apostille Convention).

According to the Updated Procedure, once submitted, the application to the Permit Unit of the Immigration Authority will be processed within 6 days, if possible. Upon the permit being issued, the foreign expert will be allowed to enter Israel on a B2 tourist visa. On arrival to Israel, the process is completed by attending the local branch of the Immigration Authority for a B1 work visa to be issued to the expert.

The Immigration Authority may decline an application for various reasons, for example, if it believes that the procedure has been abused by the applicant.
We will of course keep you updated of any further developments.

As always, we are happy to address any questions or concerns you may have in this regard.

How To Calculate The Cost of Living Abroad?

Correct calculation of the cost of living in the destination country should take into account important parameters that are not included in the cost of living index, such as housing, education, vehicles and special expenses arising from the nature of the mission

When a company decides to place an employee abroad, it must take into account the cost of living in the target area. This is true even if the company has decided to pay its employee wages equivalent to the local employee’s wages (as is common, for example in the US), due to the fact that the level of expenses of the employee is different from that of a local employee, as detailed in this article.

 The Magic Number

In many cases, the company “solves” the problem by achieving the “magic number”: the cost of living index factor. This index compares the average cost of living between the two cities, for example Tel Aviv and Brussels. According to The Economist, the cost of living index for Brussels is 104 relative to the index for New York, whereas the index for Tel Aviv is 87 relative to New York. A simple calculation (100X104 /87) show the cost of living index of Brussels compared to Tel Aviv is 120. Hence, the employee’s salary in Belgium should be higher by 20% compared to his salary in Israel.

 

Simple? Not exactly. The use of a simplistic average cost of living index ignores, for example, the employee’s children’s tuition. While education in Israel is state education, it is not customary in Belgium to send the children of the employee to a local school and the existing alternatives range from the annual tuition fee of €30,000 (International School of Brussels) to €3,000 (Jewish School of Brussels).

This is meaningless for an employee without children of school age, but an employee with two school-age children will face more expenditure than €60,000 per year, which makes the factor of 120 that we computed earlier, irrelevant.

It is important to understand what makes up the cost of living index, how it is calculated, what is included and mainly what is excluded from it. Measuring the total current cost of living generally includes all current consumption items:

  • Current expenses (electricity, gas, water, cable TV, internet, taxes and home insurance)
  • Food at home
  • Food away from home
  • Alcohol and tobacco
  • Entertainment (classes, clubs, movies)
  • Clothing and shoes
  • Personal care (haircuts, cosmetics and toiletries, dry cleaning)
  • Healthcare
  • Public transportation (buses, trains, taxis)
  • Home maintenance (renovations and home repairs, electrical appliance repair, cleaning, gardening)

The cost of living index usually does not include the three “heavy” expenditure items which will be detailed below:

  • Housing
  • Education
  • Vehicle

When referring to the cost of living, it is imperative to take into account the following data:

  1. The standard cost of living index usually pertains to a couple with two children. Distribution of data for individual and couples without children is significantly different. For example, a family with children spends a relatively large part of its income on food whereas a couple without children would spend a large proportion of its income on entertainment and food away from home.
  1. In many countries there is a significant difference between the level of expenses of expatriates and locals. For example, the level of spending on food in restaurants for employees in countries like India and China will be much higher than that of the local employee.
  1. Most of the cost of living indexes are measured by Western companies. These companies are still largely bound by the colonial concept aimed at copying the lifestyle of the country that sends expatriates to “colonial countries”. Accordingly, these companies measure the cost of imported drinks and foods in countries such as Vietnam, Romania and Uganda – which are naturally the most expensive. This is not required in relation to Israeli expatriates who display a high level of adaptability to local conditions.
  1. 4. Most cost of living indexes take into account an “adjustment premium”: a period of six months to a year required for expatriates to adapt to local market conditions and consumer effectiveness equivalent to a local resident. This premium is completely unnecessary when it comes to Israeli employees who are endowed with high adaptability and ability to excel in informal communication that allows them to match, and even bypass the locals in no time.

 

Housing: It’s hard to be flexible

Housing is often the main expenditure item of the expatriate. In different countries the rental cost of a 3-bedroom apartment reaches sums of over $5,000 per month (Hong Kong, Tokyo, Singapore). Rental rates for employees’ apartments tend to be expensive especially in underdeveloped countries (Eastern Europe, India, South America, Africa) as appropriate housing inventory for expatriates is low. Apartment prices can be even higher, especially in neighborhoods close to international schools.

 

Organizations often find it difficult to adapt to the high rents. The tendency is to treat the range of rent of the locals as a reference. This approach is not practical because the expatriates compare themselves with the community of expatriates in the destination area and display a lack of willingness to be flexible. Bear in mind that in Israel, the rental prices of expatriates’ apartments are very expensive relative to ordinary rental apartments. The monthly rental prices for three bedroom apartments in central Israel where expatriates live range from $3,000 to $8,000 – far beyond the usual amounts we know.

When addressing the housing issue one has to be aware of the following aspects:

  1. Many countries have contract conditions and special payment terms. For example, in South Korea a standard lease is for 24 months and the tenant is required to pay the whole amount in advance. In addition, to ensure the rights of the tenant in South Korea, it is common to register a kind of mortgage on the leased property (Keun Mortgage). It is recommended to use a local agent to help the company / employee during negotiations with the landlord.
  1. Rent cost tends to be higher when the company pays the cost and not the employee (a phenomenon known in the language of human resources as OPM, “Other People’s Money”). When a company sets a rent budget it tends to perceive the budget as the upper limit of the rent, while the employee tends to perceive it as the starting point for negotiations … it is better, therefore, to include the cost of rent in the salary of the expatriate (except for tax considerations, see the next section).
  1. Tax laws in many countries see expatriates’ rent as a deductible expense. Some of these countries (e.g. Japan) make recognition for tax purposes conditional on the company paying the rent directly.
  1. The cost of housing does not comprise rent alone. One must take into account additional expenses such as maintenance fees, parking fees, property taxes condo fees and insurance costs.

 

Tuition: Preference for International Schools

As mentioned earlier, tuition for the employee’s children can be a very significant factor when determining the cost of living. Most Israeli companies finance their employees’ children’s tuition at an international school in non English-speaking countries. Tuition for international schools ranges from $15,000 to $40,000 per year per child. And many countries do not recognize this expense for tax purposes.

For a family with two school-age children departing on a mission in Paris, the expense of the employer for tuition is considered a benefit for the employee, hence it is grossed up in their salary. Annual tuition at the American School in Paris is about €33,000 per child (i.e. about €66,000 for two children). Because the cost of this benefit is considered wages, it is grossed up in the salary. Taking into account the level of the marginal tax (55% income tax and national insurance), the annual cost for the company reaches – €145,000!

When addressing the tuition item, one must be aware of the following aspects:

  1. It is not acceptable to pay tuition for private schools in English-speaking countries (USA, UK, Australia.) The only exception in this regard is traditional families interested in Jewish – religious schools.
    1. Even in nonEnglish-speaking countries, there are usually several alternatives for private schools that offer studies in English. A careful examination of the various schools should be made and the differences in costs, which often reach significant amounts, should be taken into account

A company must take into account the fact that the first employee sent to a specific destination area sets the “standard” for the following employees who will go on a mission to the same area: If an expensive private school is selected – this is where most children of the next expatriates will study.

  1. School cost calculations must take into account the fact that the cost does not consist of the tuition only. In most cases items are added up as mandatory; such as the registration fee, capital fee, supplemental program in English and optional items like transportation and meals. The company should include the mandatory items in calculating costs and predetermine the policy regarding the optional items.

 

Car: Not necessarily a company car

Vehicle policies are typically derived from the market customs of the destination country and not those of the country of origin. For example, it is not customary to provide a company car in the US labor market. A company that gives an Israeli expatriate a company car will be anomalous in providing this benefit in the US market and will create an unlikely gap between the expatriate and the domestic employees.

In contrast, employees in managerial positions or sales positions in Italy get a company car that is a part of their salary and benefits and, therefore, an Israeli expatriate sent to Italy for an equivalent job should get a company car – regardless of whether he is or is not entitled to a company car in Israel.

When deciding to provide company cars, the following points should be examined:

  • What type and level of vehicle is customary for the specific job?
  • Is it customary to replace the vehicle every few years?
  • Does the company finance all vehicle expenses or just some of them?
  • If the benefit is taxable, does the company pay the cost of the tax?

If the employee purchases a car, consider the following costs:

  • Is leasing a car instead of buying it a practical alternative?
  • Cost of acquisition (does the expatriate have enough money to purchase a vehicle or two or does he need help in coming up with the money (a loan or an advance)
  • Level of depreciation of the vehicle (given that the employee comes for a limited period)
  • Car insurance costs (in many cases the employee will be considered a “new driver ” which will raise the cost of insurance)
  • Costs of taxes and fees imposed on the vehicle
  • Fuel costs

In summary, the calculation of the cost of living for the employee and his family is not a simple matter. Proper planning and realistic budgeting of the mission will help prevent friction and conflicts with the employee regarding funds during the mission and will ensure a level of expectations appropriate to the reality in the destination country.

Back From U.S. Relocation – Practical Considerations

Repatriation guide to relocating back from the USA to Israel, the practical considerations:

Repatriation-from-the-US-to-Israel-Practical-Perspectives-2012

Cross Cultural Training : ISRAEL – USA

Learn the nuances and cultural differences of living and doing business in the Us and Israel.
A guide free to download:

Israel_US-Cross-Cultural-Training

Relocation Guide & Checklist to Individuals and Families

From tax planing to shipping and packing, the complete guide and checklist for the relocation candidate, a Relocation guide and checklist free to download:

Relocation-Checklist-Individuals-and-Families

Guide to screening and interviewing employees in the USA

A complimentary guide (In Hebrew) for all you need to know on interviewing practices and tactics in the USA.
Free to download:

Guide-screening_and_interview_employees_in_the_US

Furniture Rental Solutions

Relocation Furniture Rental Solutions

Workers who go overseas on relocation are often undecided between two alternatives – shipping furniture or purchasing new furniture in the destination country. There is a widespread worldwide third option, which preferable in many cases, and that is renting furniture for a mission.

Among the many arrangements and bureaucracy involved in the process of relocation, there is also the subject of home furnishings in the destination country. Typically, employees debate between two alternatives: shipping furniture and electrical goods abroad or purchasing them in the new place. Each option has its advantages and disadvantages, but there is a third option that is usually not taken into account – renting the necessary equipment and furniture for the family’s stay abroad. Comparing the costs of the three alternatives shows that when the mission length is up to two years, renting furniture has a clear advantage over the other options.

Finding a place to live is one of the first challenges faced by employees sent abroad with their families for long periods. In most cases, since the mission lasts 2-3 years, the company does not buy the property but rather rents it. Apartments are usually rented unfurnished (or partly furnished). The possibility of renting a fully furnished apartment (an executive apartment) is usually ruled out due to its high cost (approximately 30% to 50% more than the price of an unfurnished apartment).

 

Advantages vs disadvantages

As mentioned earlier, Israelis who travel abroad resolve the issue of overseas residential furniture in two ways: shipping furniture from Israel or buying furniture abroad (in many cases, it’s a combination of the two). The latest relocation policy survey carried out by ORI found that 94% of Israeli companies cover the cost of shipping cargo for employees and 72% of them also provide employees on relocation with a $5,000 to $20,000 grant mainly for the purchase of furniture and electrical appliances.

 

Throughout the world, however, renting furniture for relocation is becoming more and more acceptable. A survey by ORC among international companies showed that 34% of companies allow employees to rent furniture for the duration of the mission.

 

In order to compare the profitability of the three alternatives, we created a table summarizing the advantages and disadvantages of each option:

 

Cons

Pros

Option

– Not in line with the local housing standard
– Waiting period (one to two months)
– Possible damage to the cargo
– Having to deal with customs

– Keeping existing equipment
– Recognition of the cost for tax deduction

Shipping cargo (by sea) from Israel to the destination country

– Not in line with the Israeli housing standard
– Not recognized for tax purposes
– The need to store the furniture left in Israel

– the local standard

Buying furnishings in the destination country

– The need to store the furniture left in Israel

– In line with the local standard
– Recognition of tax cost

Renting  furnishings in the destination country

 

A crucial consideration in deciding which of the three alternatives is the best option is of course the cost. This factor is influenced by many variables (mission destination, the quality of furnishings, the quantity of furnishings, the cost of furnishing in the specific destination country etc.) and therefore analysis is needed for each case individually. The following analysis compares, for example, the costs of furnishing solutions for a couple with two children relocating to northern California:

 

OptionType of expenditureTotal cost by duration of mission – in dollars
1 year2 years3 years
Shipping cargo (by sea) from Israel20 foot shipping container (from Israel)$7,200
40  foot shipping container (back to Israel)$11,100
Insurance$1,800
Temporary housing (until the arrival of the shipment)$7,200
Appliances (different standard)$3,600
Total cost

$30,900

Buying Furniture (including grossed up)Buying furniture$14,300
Buying appliances$5,700
Buying bedding, housewares, miscellaneous$4,800
300 kg of air cargo (back to Israel)$1,700
500 kg of air cargo (back to Israel)$2,300
Israeli storage (25 cubic meters)$3,000$6,000$9,000
Total cost$31,800$34,800$37,800
Furniture Rental300 kg of air cargo (back to Israel)$1,700
500 kg of air cargo (back to Israel)$2,300
Renting house contents$13,200$22,800$31,700
Israeli storage (25 cubic meters)$3,000$6,000$9,000
Total Cost$20,200$28,800$40,700

 

As shown in the cost analysis, the furniture rental alternative enjoys a clear advantage when the mission period is up to two years. For mission periods of three years or more the shipping alternative enjoys a clear advantage ,while the alternative of buying furniture is also cheaper than renting it.

 

In conclusion, as we have shown, there are advantages and disadvantages to each of the three alternatives. Cost analysis is recommended in each case, taking the individual and the family variables into account.

The Coming Home Crisis – Guide to Repatriation

Coming Home Crisis-How to have a Successful Homecoming

Return from a long relocation period is often accompanied by feelings of disappointment and difficulty fitting in the environment and the workplace. What are the reasons for that and what can be done to facilitate a smoother integration back home?

 

Many Israelis returning to Israel after a period of overseas relocation note a sense of crisis and severe adjustment problems (repatriation) – even more than when leaving. This is seemingly an inexplicable phenomenon – why would it be difficult to return to your homeland, your family, your friends and your language? A closer look at the phenomenon reveals a number of reasons:

 

Subsistence level: many Israelis improve their standard of living abroad (higher quality housing, international schools, high wage levels, nanny at home, etc.), as all of us know, it is easy to adjust to improved standards of living – but very difficult to adapt to the contrary.

 

Quality of life and lifestyle: Many Israelis adapt to the quality and style of life abroad (calmer pace of life, formal manners, maintaining personal space, etc.). Returning to the “seething cauldron” that is Israel can be a challenge.

 

False expectations: employees returning to Israel don’t prepare themselves for the return and come with unrealistic expectations of reintegrating in it, which could lead to a crisis.

 

Leaving their place of work

 

Repatriation crisis is reflected among other things, in the high dropout rate of returning Israelis from their workplace. About 35% of employees who work abroad on behalf of the Israeli company resign their jobs during the first two years of their return to Israel. There are a number of reasons for that:

 

Disappointment with the company: Some employees (and many times even their spouses) were not satisfied with the way the company handled them during their stay abroad. While abroad they had no real ability to leave the company (most work permits do not allow workers to work for another company abroad). Back in Israel there isn’t any restriction on resigning, and at the first opportunity employees will choose to get back at the company and leave it.

 

Wage cuts: returning to Israel usually involves a decrease in the level of wages, which workers find difficult to adapt to, and this motivates them to actively look for another job.

 

Status decrease: oftentimes the employee discovers that while he was abroad, the personnel at the Israeli company changed and don’t recognize his abilities and “historical rights”.

 

Expectation of promotion: the returning worker expects a promotion at the organization, in recognition of the experience he gained abroad, but upon his return to Israel he finds that “out of sight out of mind” and that all the senior or desirable positions are already taken.

 

To facilitate the process of reintegration, it is important to consider several areas which, when handled properly, will contribute to a pleasanter integration after relocation.

 

The regulation of insurance and pensions – in advance

 

Pension insurance: an Israeli who received appropriate advice prior to leaving Israel retained the framework of his pension insurance (disability insurance and life insurance) and therefore can continue with them easily when he returns to Israel. An Israeli who didn’t retain his pension insurance framework in Israel may find himself in a bind when he returns to Israel, if there are any changes in his medical condition. In any case, it is recommended to treat pension insurance immediately and try and keep the parallel foreign policies while the matter is not regulated in Israel.

 

Pension Savings: Israelis neglect the issue of their pension savings overseas. This is a serious mistake, since most of them are in the most significant period in terms of provisions for pension savings. Others contribute to foreign pension plans, but do not take the actions required to preserve the pension rights abroad when returning to Israel. It is advised for returning Israelis to seek professional actuarial advice (to check the status of their pension savings) and international benefits consulting (to check the ability to benefit from the pension contributions made abroad).

 

Social Security: upon your return to Israel you should contact the relevant branch of the National Insurance Institute of Israel and check the National Insurance benefit entitlement (child allowance, alimony, disability allowance, etc.). You might also want to check whether National Insurance benefits were paid while your stay abroad. In most cases, a person who stays abroad for more than three months loses his rights for benefits. If you were paid allowances during this period – it is better to inform the National Insurance Institute of Israel and arrange the repayment of the debt as soon as possible. In our experience, sooner or later the National Insurance Institute of Israel will track down the debt (no statute of limitations on debt) and the more the payment of the debt is delayed the more the amount to be repaid inflates (which includes fines and interest fees).

 

Health Insurance: Israelis who didn’t pay National Insurance continuity and national health insurance while abroad are likely to be subject to a waiting period of two months for each year of separation. However, it is possible to “purchase” the waiting period sixmonths before returning to Israel by paying a fine of NIS 10,000 or to purchase private medical insurance for the waiting period. HMOs also require a waiting period for those who didn’t preserve their supplementary medical insurance. It is recommended to examine the status of health insurance in Israel for at least six months before returning to Israel. As is the case with pension insurance, it is important to

retain the overseas medical insurance policy as long as the issue is not resolved in Israel.

 

Tax reliefs and other issues concerning the returning employees

 

Income Tax: An Israeli who lived abroad for more than six years is entitled to tax reliefs and exemptions on assets purchased abroad before returning to Israel. An Israeli who lived abroad for over ten years also qualifies for tax exemptions in respect to income from work abroad. It is important to keep in mind that an Israeli who is considered a resident of Israel during his stay abroad may be subject to taxation in Israel for overseas income. Therefore, it is recommended to perform tax planning using a professional consultant some months before returning to Israel.

 

Customs: An Israeli returning to Israel after a period of two to six years abroad will be entitled to exemption from customs on “necessary” furniture, household and electrical goods. An Israeli who lived abroad for more than six years will also be entitled to full exemption on the products that he brings to Israel (the same as a new immigrant) excluding vehicles. A business owner who brings professional equipment necessary for the operation of the business to Israel will be required to deposit a bank guarantee equal to the customs duty for the equipment until he produces evidence of using the equipment in a business he set up in Israel.

 

Returning Resident Rights by the Ministry of Immigrant Absorption: the Ministry of Immigrant Absorption provides a basket of benefits for returning residents (Israelis who stayed abroad for more than two years). Among the benefits granted are:

  •  Discounted ticket (one-way)
  •  Assured income (for those who can’t find work)
  •  Vocational training courses
  •  Assistance in obtaining a professional license
  •  Financing of salaries for six months

 

Housing: It’s better to rent and not buy

 

Many Israelis invest time and resources in purchasing a home when returning to Israel. In our experience, “less is more” – buying a home requires much time and resources at a time when the family is under considerable pressure. In addition, the real estate market in Israel changes rapidly and Israelis absent from the country for several years lack critical knowledge for preventing errors.

 

In many cases we spend months escorting returning Israelis who insist on buying a home , until they face reality and recognize the many difficulties. It is therefore advisable to “make do” with renting a house in the first stage (at least a year). The renting period will allow the returning employee and his family to learn more about the local real estate market and will enable a more relaxed purchase.

Work Permits & Visa Tips