Dr Alon Kaplan 12 August 2024

Israel’s Immigration Continues, Supported By Tax Incentives

We carry this brief commentary by a long-standing figure in the world’s trust and estates planning industry with a view on Israel.

This news service – as seen by this example – continues to cover the ways in which people migrate to new jurisdictions, sometimes to obtain more advantageous tax regimes, work environments and political and legal stability. In the past, we have written about Israel as a place with a wealth management dimension, and not just for those of the Jewish faith. In 2020, Israel inked the important Abraham Accords with the likes of the United Arab Emirates and Bahrain, and this news service considered the implications.  

Of course, it is impossible to overlook the grim events in the country of 7 October 2023, and the subsequent conflict in Gaza and the implications for the wider region. And yet Dr Alon Kaplan, author of this article, argues that Jewish people continue to emigrate to Israel. It remains an important economy in areas such as IT. The country’s tax, estate and inheritance laws have specific advantages. 

Dr Kaplan, TEP, is an advocate and notary, and member of the New York and Israel bars. An experienced lawyer in areas including estates, trusts and private client work, he is a member of the Society of Trust and Estate Practitioners, aka STEP. He is founder of STEP Israel. Dr Kaplan wrote this article alongside Yakir Ben Harush, advocate. (More on Dr Kaplan’s background and published works below.)

The editors of this news service share these views to stimulate debate; the usual editorial disclaimers apply to views of guest writers. To respond, email tom.burroughes@wealthbriefing.com

Israel is a land of immigrants. Historically, it is one of the few countries that explicitly addressed the need for liberal immigration policies in its founding document. In 1950, the new Israeli government enacted the the Law of Return, which guarantees to this day that “every Jew has the right to come to this country and become an Israeli citizen.”

The state’s support for immigration is further reflected in its legislative system and government policy. The impact of massive immigration to Israel necessitated legal and economic arrangements. One of the important arrangements established by the Israeli government is providing incentives for new immigrants, returning residents, and returning long-time residents.

In 2007, on Israel’s 60th anniversary, a new law was enacted to encourage both immigration and the return of Israeli citizens who are not residents of Israel to move and live in Israel. The reform in taxation of new immigrants and returning residents (hereinafter: “New Immigrants Legislation”) replaced previous legislation that granted benefits to new immigrants and returning residents and was approved by the Ministry of Finance in 2008. 

Since the enactment of the new immigrant law, attractive wealth planning arrangements motivates immigration to Israel. The Israeli legal system includes up-to-date legislation and precedents in the field of inheritance and estate planning. 

Unlike other jurisdictions around the world, especially in the Western world, Israel does not impose estate tax or gift tax. Immigrants are provided a 10-year exemption period for tax in relation to income originating outside of Israel. These incentives encourage individuals to take the necessary steps and organise their financial affairs when settling in Israel. 

In addition to the tax exemption, and to further encourage immigration to Israel, the Israeli legislature also granted these new immigrants and returning residents an exemption from reporting their income accrued outside of Israel. 

The special incentive for immigration and investment in Israel are not to be regarded with the popular term of a “golden visa.” As explained above, the special Law of Return was enacted in 1950 with the goal of creating a state for Jewish people who wish to settle and live in Israel.

 

About Dr Kaplan

Dr Kaplan practises law in Tel Aviv and specialises in trusts and estates. He was admitted to the Israel Bar in 1970 and appointed notary in 1989. He was also admitted to the New York Bar in 1990, and was licensed in Germany in 1991 and became a member of the Frankfurt Bar Association in 2010. He was an adjunct lecturer at the Law Faculty of Tel Aviv University and lectured in its LLM programme. The founder of STEP Israel in 1998, Dr Kaplan is its president. He is also an academician of the International Academy of Estate and Trust Law and member of the American College of Trust and Estate Counsel. Dr Kaplan also advised the Israeli Tax Authority on trust legislation. is the general editor of Trusts in Prime Jurisdictions (5th edition, April 2019), the Israel country correspondent for Oxford Journals’ Trusts and Trustees, author of Trusts in Israel: Development and current practice (2015 Helbing Lichtenhahn Verlag) and Trusts and Estate planning in Israel (October 2016, Juris Publishing).

אלון קפלן

חוקיות פריצה למאגר מידע של עורך דין ולקוחו

Trusts & Trustees – Alon Kaplan & Meytal Liberman

Abstract – How to use a trust as an alternative to a will to transfer assets to the next generation? This article will answer this question by first introducing the reader to inheritance and trust law in Israel. It will explore the endowment and how it should be used in order to regulate the transfer of assets to the next generation—how a trust should be set up and how assets should be transferred to it. The conclusion drawn from this analysis points out the key elements which should be considered when creating a trust to survive death under Israeli law.

Alon Kaplan

Dr. Alon Kaplan

Dr. Alon Kaplan

Alon Kaplan

Alon Kaplan & Meytal Liberman

Israel has long been a ‘home’ for many international families. The Law of Trust, the Law of Contract, and the Law of Agency together form the legal framework for Trusts and estate planning in Israel.

Alon Kaplan & Meytal Liberman

Real estate trust in Israel is a useful legal structure for families who wish to register real property in the name of a corporate body acting as a ‘transparent entity’ and keep tax advantages granted to individual persons. This structure may be found particularly useful and efficient for non-Israeli families that decide to invest in real estate in Israel or have a second home for the family compound.

Alon Kaplan

Alon Kaplan & Meytal Liberman

Alon Kaplan, Lyat Eyal and Diana Apelboim Ladovsky

Alon Kaplan and Lyat Eyal

The article reviews the Israeli Banking Ordinance 1941, whose provisions relating to joint ownership of assets in Israel are quite unique in Israeli law. Non-residents, both clients and professionals, owning assets in Israel, unfamiliar with local laws and accustomed to the laws in their relevant jurisdictions, are often surprised. Estate planning, including the establishment of inter-vivos structures, such as foundations and trusts, may resolve some of the issues. This article will not discuss basic issues but rather the manner in which trusts and foundations may remove various obstacles for non-residents who are not familiar with Israeli laws. For the purpose of this article, we consider the Israeli Hekdesh coupled with an Israeli underlying company as a foundation, as this arrangement may be used to hold assets under a trust in Israel.

Alon Kaplan & Meytal Liberman

Alon Kaplan and Lyat Eyal

Alon Kaplan, Lyat Eyal and Meytal Liberman

Alon Kaplan and Lyat Eyal

Freedom of succession has created many discussions over the past few months for estate and trust professionals. This is mainly due to the EU Regulation, which for many is a significant development towards freedom of succession. Israel is a country of immigration and emigration. As movement of individuals between different jurisdictions is relatively simple, and the global world is relatively small, individuals tend to travel, and change their jurisdiction of residence (or domicile, as the different jurisdictions may permit), with assets and family members in different countries subject to different laws. This makes estate planning and, later, implementation of the plan complicated. The EU Regulation aims to resolve some of these issues.

Alon Kaplan and Lyat Eyal

This article treats the Israeli Hekdesh coupled with an Israeli underlying company as a foundation. It summarizes the taxation of foundations and trusts in Israel, as well as the main provisions of the relevant legislation as revised in 2013 which is now final and effective. The article then continues to discuss the appointment of protectors under Israeli law. Finally, the article provides for an interpretation of the arbitration law as it relates to foundations and trusts.

Alon Kaplan & Shlomo Kerem

Alon Kaplan and Lyat Eyal

Alon Kaplan and Lyat Eyal

In Israel, local laws and governmental agencies regulate estate and inheritance matters. Consequently, in order to distribute estate assets, a petition for an inheritance or probate order must be filed locally. Such filings may be avoided by the establishment of a trust during one’s lifetime. By transferring assets to a trust/Hekdesh, they no longer form part of the individual’s estate upon death, and no court orders are then required to transfer the assets to the heirs. Since a trust is not a separate legal entity, a trustee may establish an Israeli underlying company to hold the assets for the trust.

Alon Kaplan

Alon Kaplan

Alon Kaplan and Alan Krost

The article illustrates that the Hekdesh, which is a special type of trust existing under Israeli law, is in fact similar to a foundation. The article discusses the law relating to the Hekdesh and highlights the features of the Hekdesh focusing on the similarities to a foundation and emphasizing its advantages over a foundation.

Alon Kaplan

Books – Contribution of chapters on Israel

Alon Kaplan

Books – Contribution of chapters on Israel

Alon Kaplan

Alon Kaplan

Books – Contribution of chapters on Israel