A lot of Israelis have a great dream: They want to work as a freelancer or just set up their own small business. People prefer to be independent and many of them have invented great products / services.
When someone has a small business, in Hebrew we call him an ATZMA’I (male) and ATZMA’IT (female). Meaning, an independent entrepreneur. Here are a couple of helpful details in case you are planning to set your own business:
As soon as a small business reaches an annual gross income of 70,000 Shekel, the owner should get an accountant involved, as taxes and social security contributions are due to rise drastically.
When setting up one’s own business in Israel, it is extremely important to have a vast network. Most Israelis are great Networker and, as it is a small country, a lot of people know each other. Either people know each other from school, the army, through their job or simply through networking sites such as Meetup.Com. If you as a new founder has a lot of connections, it will be easier to find potential customers or clients. Nevertheless, even setting up a small business is a tremendous responsibility because tax authorities and the national insurance Bituach Leumi will chase after you as much as they can. And taxes are extremely high in Israel.
Always be aware of the fact that, as a freelancer or business owner, you are not entitled to receive unemployment benefit in case the business fails. Whenever you make a profit, put more money aside than you actually spend.
Private pension insurances?
When signing a private pension insurance plan with an insurance company, make sure that you are not yet 40 (let alone 50) years old. As soon as you are older, you won’t see a lot of the money you pay into the fund. More than 50 % go straight to the insurance agent because he collects his annual commission. What you should do instead is opening a separate bank account and put in as many savings as you possibly can. Signing a new insurance pension plan when you are 50 years or older can turn out to be the biggest rip – off. In this case, you will lose most of your money and the only one getting rich will be the agent.
Should I set up a small business after making Aliyah? And do I need to speak Hebrew?
I would advise you to get to first know the crazy Israeli mentality. One of my co – workers recently called it the “retarded mentality” and all those of you who made Aliyah know exactly what I am talking about. 🙂 First of all, get to know the people and the local market before you invest money into your own business. A lot of people will try to cheat on you and it is important that you know when this is the case. Hebrew is not always necessary. Especially when you mostly deal with English speakers. However, it would definitely help to understand what is going on.