Starting a small business in Israel? Learn from my mistakes!

Did you come to Israel – or are you planning to come to Israel – hoping hoping to start a small business?  Good for you!  I really mean it.  Israel is the Startup Nation.  It’s a land of opportunity.  It’s the place where you can make many of your dreams come true in amazing ways you never even dreamed of back where you came from.

As long as you’re careful.

For all the opportunities here in Israel, it’s also… (shh) a very bureaucratic place.  And you have to stay on top of the bureaucracy because, unlike in certain larger and more anonymous countries I could name, where you can owe the tax people money for years with absolutely zero consequences, neglecting some of the bureaucracy here in Israel can have serious repercussions.

How do I know?

Um, let’s just say… I’ve learned this the hard way.   Not the extremely hard way, which probably involves jail time.  But the kind of hard way, which involves having your bank accounts frozen and threatening letters from various government agencies.

Setting yourself up as a small business here is actually super-easy.  There are three basic steps, and I’ve found that Rifka Lebowitz’s guide is terrific in terms of explaining these in detail:

1. Register your business for Ma’am (Value Added Tax = VAT):  There are two kinds of businesses, which mostly depends on how much income they bring in, and for both types, you need to open a “tik” (file) – tax-exempt (osek patur) and tax-paying (osek murshe) with the VAT office.
2. Register for income tax:  True, they’re both taxes.  But the VAT people don’t talk to the income tax people and vice versa.  So you have to tell the income tax people you’re a business now.  And then they will hound you forever after (see Tip #1) until you close your business tik, which is very easy to do if you’re no longer running your business.
3. Register with Bituach Leumi:  This is a socialized country You no longer have an employer paying your national insurance, and most importantly, your health insurance to your kupat cholim (HMO, healthcare provider network) – so this is your responsibility now as an independent business person.

In general, skipping one of these steps is a recipe for disaster – so don’t do it.

Here are three mistakes I made along the way through this simple process that I hope you can learn from instead of having to untangle on the other side.  Any tips here are NOT a substitute for a good accountant.  If you think your needs are at all complex, please consult a real tax advisor (not just a blog, for heaven’s sake!) before you take any steps you may regret.

Mistake #1 – Tax ≠ Tax

Sounds like a no-brainer, right?  Except I was lulled into complacency because when you come here, everybody says

When NOT to come on your Israel pilot trip…

I never thought I’d be saying this.  Keep in mind:  I’m not saying don’t come at all!  A pilot trip is one of the best investments you can make in your own aliyah!  Please come visit before you move here. 

But what I’m saying is… think before you plan.  Be nice to those of us hosting and welcoming you to our communities.  Pretty please?

Why mention this now?

We’re in the middle of the last week of school, and also, I suppose, the start of the aliyah season, because we have several pilot-trip families converging on KShmu over the next couple of weeks.  Which is terrific – I’m always so, so,  happy to show off our community if I can.

Comparing healthcare systems–Israel vs Canada

I got a great question from a reader today – I love hearing back from you! – and I thought I’d share it once I was done writing back.  The reader asked, based on my experience with healthcare in Canada and Israel, how I’d compare the two.

It’s actually something I haven’t put a lot of thought into.

As Canadians, socialized health care wasn't such a big transition for us.  American friends have had a variety of reactions, from giddiness that they wouldn’t go bankrupt trying to stay healthy to… well, I don’t think I’ve heard of any who really had a hard time adjusting, so I don’t know what the worst-case scenario is.  I suppose for people coming from the U.S., there may be longer waits and more of a “socialized” feel to things here, if that makes any sense.  But most, as I said, are far too delighted that the safety net exists here to worry about the nitpicky details.

Also, full disclosure:  baruch Hashem (ptoo, ptoo, ptoo!), we haven't had to have a lot of contact with the healthcare system.  However, although we’ve had no major health problems, we have all seen a variety of specialists, done the basic urgent care visit for little-kid stitches, non-emergency hospital visit, and routine health things as well.  Mostly, if it has been harder here, it is because of difficulties with the language, not the system.

A few particulars that I’ve found are different here:

• Israel is more complicated in terms of choosing a kupat cholim (healthcare plan) and package. 

How you know I’m still Canadian after all these (almost 4) years…

How do I know I’m still Canadian, even after almost 4 years in Israel?

Well, for one thing, the big Canadian flag in my front window – genuine, no doubt made in China, purchased last week at Dollarama.  (Full disclosure: I bought the JUMBO size, not SUPER JUMBO, so it’s smaller than the Israeli flag we just took down after Yom Yerushalayim…)

(This is my actual flag pictured above – not some cheesy stock photo.  You can tell it’s my flag because it’s held up with a clothespin – see top-left of photo.)

For another thing, the small Canadian flag in one of the front planters.

For a third thing, we’re flying to Canada at some unspecified point this summer, iy”h.  (Or, as everyone says here, be”h.)

For a fourth thing… well, we just are.  It’s just our culture.

In what way?  Well, here are two examples.

Canadian in the mall

Last summer

To have and to hold: The tricky talk of owning in Hebrew

Are you having a good day?  Do you have a cold?  Did you have a nice time?

I’ve said a million times that English is a lazy language compared to Hebrew, and here’s yet another way it’s true.  In English we have this awesome verb “to have,” which we use for almost everything.  We even use it to help other verbs:  “Had I known you had it, I would have chosen hot chocolate!”

But guess what?

This word is completely, 100%, missing from the Hebrew language.  In other words:  it has no has.  When I’m teaching, this is one of the most difficult things to get across – why kids need to be able to conjugate “to have” in English when it doesn’t exist at all, as a concept, in their native language…

But instead of “to have,” Hebrew has numerous different forms that you use depending on what, exactly, you want to say about you and the thing you own.  Here are just a few.  Well, okay… six.

Six Awesome Ways to Talk About Having in Hebrew

1. Yesh! – “There is”

This is the classic.  Back in Hebrew school, I learned the way around this:  “yesh.”  Yesh has two meanings:  to possess or to indicate. 

To Indicate:  you can indicate an object by saying, יש עיפרון על השולחן / yesh iparon al ha shulchan and it means “there’s a pencil on the table.”  Basic stuff (and hey, I’m not a grammar guru, so if there’s a better word than “indicate,” just let me know politely!). 

To Possess:  You can also say יש לי עיפרון / , yesh li iparon, which literally means “there is to me a pencil,” but basically means, “I have a pencil.”  Only without saying have.  The pronoun here conjugates nicely, so you can give anyone you like a pencil (thanks very much!):  יש לנו עיפרון / yesh lanu iparon / “there is to us a pencil” = we have a pencil.

So far so good.  For an English speaker, it takes a little thinking, because in English, all you have to do is figure out the simple pronoun (I, you, we, etc.) and then add HAVE, whereas in Hebrew, you need to conjugate (li, lecha, lach, lanu, etc.).

So that’s yesh, and it takes care of having – kind of.

2. Shel + Suffixes – “Of”

But what if you want to say you OWN something?  “We have a car.  The car belongs to us.”

Hebrew school taught me the easy way to do this –  האוטו שלי / ha-oto sheli / “The car is mine”.  But it doesn’t mean belonging.  This form is far more passive.  The car just sits there and “BE”s mine.

What is Yom Yerushalayim, and why do we need it?

What are you up to this week???  Here in Israel, we’re still celebrating.  It’s like one non-stop party at this time of year, which was so bland back when we lived in Canada.  And this time, it’s one of the strangest holidays of all: Yom Yerushalayim (Jerusalem Day). 

This is it – the Big 5-0, and the city is all geared up with so many different kinds of celebration.  Every school in the country, pretty much, is organizing tiyulim to the Holy City, and the place is mobbed with the usual tourists plus some.

I was there, with my son’s school.  We had a great time, but it was a heartbreaking time as well, and here is why:  Jerusalem is so far from being perfect it’s not funny.  Jerusalem is so far from being perfect that I could cry.

At the seder each year, we sing, לשנה הבאה בירושלים / leshana haba’ah bi’Yerushalayim – “Next Year in Jerusalem.”  We sing this even if we are lucky enough to be in Jerusalem, because the last word is הבנויה / habnuya – Rebuilt. 

The Jerusalem that we have is a miracle.  It is a beautiful, busy, living, crazy balagan of a city and I love it.   I love the fact that the country just turned 69 years old, and its capital is only 50 – this shows that you can’t take even a capital city for granted here, since we had to do without it for 19 years.

Yes, a miracle indeed. 

(photo credit: IDF via Wikimedia)

The Jerusalem we have today is truly many things… but it is not yet rebuilt.

This year, we’re celebrating 50 years since the liberation of Jerusalem from Jordanian hands, putting it in Jewish control for the first time in thousands of years.  But walking the streets of Jerusalem, the city does not yet feel free.

Driving past the Damascus Gate (Shaar Shechem), the Palestinian Bus Station, the police standing guard across from Givat Hatachmoshet, the Dome of the Rock and Al-Aqsa, the scars, mostly invisible, that have been inflicted on this city and its people since it was liberated… well, these things are more than heartbreaking.  They are like a slap in the face when everybody’s coming to celebrate.

But this is the reality.

Did you forget to call us on our special day? (Please call!)

It’s not too late, in case you were thinking of picking up the phone.  You’ve still got a few more days.

What?  You weren’t??  Why not???

If you’d normally call someone on their birthday or anniversary, why not call all your Israeli friends and family on Yom HaAtzmaut and/or Yom Yerushalayim?

Go on, pick up the phone.  It’s easy, cheaper than ever; it only takes a few minutes, and means so, so much.

Usually when I speak to family back home in Canada around these special events, which always fall between Pesach and Shavuos, and I mention a holiday, they usually say something like, “Oh, yeah… it’s, um, is it Lag Baomer?”  (Which, to be fair, it sometimes is and sometimes isn’t.)

And they’re absolutely right to be ignorant about what’s going on here.  You really don’t feel Yom HaAtzmaut or Yom Yerushalayim outside of Israel unless you’re immersed in a tremendously Zionist context where people are going to extremes to deck the halls.  That “Oh, yeah,” reaction – well, I don’t blame them.  If you’re just going about your life, it’s a little much to expect you to remember a minor, modern holiday in a country far away.

And yet… every year, I wake up on March 1st knowing it’s my sister’s birthday.  There’s no sign of it in the weather, in the air, posters on the walls, sales in the malls, or fireworks anywhere I go.  (I picked this sister deliberately, and not my mother, who was born on Bastille Day, the French national holiday, or my other sister, who was born on Valentine’s Day…)

And because it’s my sister’s birthday, I think about her, plan a gift (okay, I don’t always get around to sending one – I’m not the BEST sister!), send her some kind of e-greeting, make a phone call.  I sort of think about her all day, and the amazing things she does that I never could.  It’s her special day.

(See?  Very special!)

Now, you’ll probably admit that we’re not limited to ONE special day per year per person.  People also phone loved ones on their anniversaries, Mother’s Day, graduations, and other special occasions, so this isn’t limited to birthdays at all.

So why not extend the love to include, oh, an Independence Day (or two)?