Investment regulation - Israel
Holding restrictions
Generally, there are no investment or holding restrictions that specifically apply to non-resident investors.
However, according to the The Banking (Licensing) Law 1981, as amended on 16 June 2016, asset managers or financial institutions are restricted to holding up to 7.5% of the means to control a banking corporation, subject to the prior permission of the Governor of the BoI. Any legal person or entity is restricted from holding more than 5% of the means to control a banking corporation without the prior permission of the Governor of the BoI.
Other statutes restrict the acquisition of stakes in the means of control of insurers, provident fund management companies and mutual fund management companies. In order to hold a 5% stake in such institutions and/or to increase a stake to 10% or more, any legal person or entity must, in both cases, obtain prior approval from the Ministry of Finance or the Israel Securities Authority.
In addition, the purchase of 5% or more of a public company’s outstanding share capital during a period of less than six months can only be made by way of regular tender offer.
An investor who purchases or sells shares in a publicly listed company, thereby causing the crossing of the 5% threshold of ownership, is required to file specific reporting to the issuer, the TASE and the Israeli Securities Authority.
Generally, investors who want to purchase stakes of 25% or 45% of a public company’s outstanding share capital must do so by way of special tender offer only.
Investors who purchase listed shares representing at least 90% of a public company’s outstanding share capital are required to make a full tender offer to purchase the remaining outstanding listed shares.
Different institutions may have additional reporting requirements, based on industry. For example, the banking, communications and defence industries may require advance approval from the relevant ministry.
For further information, please refer to the Clearstream Banking Market Taxation Guide - Israel for details regarding the documentation required in order to enter the Israeli market.
Investment restrictions
Under Israeli regulation (the Trading With The Enemy Ordinance (1939)), any commercial or investment activity with Israel undertaken by entities located in Iran, Iraq, Lebanon, Libya, Syria, and Yemen is prohibited.
Disclosure requirements
For details of the local domestic disclosure requirements, please refer to the Disclosure Requirements.