On June 26, 2025 the Israeli Ministry of Justice published for public response a law memorandum with regard to the establishment of a national central registry of ultimate beneficial owners (UBOs) in corporations (the “Memorandum“). The proposed law is intended to enhance transparency in corporate activities, combat money laundering, terrorist financing, and economic crime, and align Israeli law with binding international standards.
At this stage, the Memorandum has been published for public comments, and the path to legislation and enforcement is still long. However, since the public has been given the opportunity to respond to the proposed law (until July 17, 2025), we found it appropriate to inform you about the publication of the Memorandum, so to allow as much time as possible for preparation or for taking actions related to the core of the Memorandum, and perhaps also for submitting reservations or suggestions to the Ministry of Justice.
Key Provisions of the Memorandum. The law (if passed) will require Israeli corporations and foreign corporations with a nexus to Israel (including companies, partnerships, non-profits, cooperatives, and others) to report to a designated registrar the identity of their UBOs. A UBO is defined as an individual who has the ability to direct the corporation’s activities, directly or indirectly, including holding 25% or more of any control means, or otherwise exercising effective control.
The report should include identifying details (name, ID/passport number, address, means of control, percentage of holdings, etc.) and should be submitted shortly after the corporation’s registration, and thereafter annually, and within 14 days of any change in UBO details.
Corporations will be required to exercise reasonable efforts to verify, update, and retain UBO information, and UBOs themselves will be required to provide and update their details to the corporation.
Certain entities, including publicly traded companies, government and municipal corporations, and entities already reporting UBOs under other laws, will be exempt from reporting.
Practical Implications for Clients
Corporate Readiness: All non-exempt corporations will be required to establish internal mechanisms for collecting, verifying, and updating UBO information, including assigning managerial responsibility for compliance.
Officer Liability: Corporate officers may become personally liable for monetary sanctions if the corporation fails to comply with reporting obligations.
Sanctions: Non-compliance may result in significant administrative fines and, in cases of false or misleading reports, criminal liability (up to 3 years imprisonment or a substantial fine.
Transparency with Financial Institutions: Financial institutions and business service providers will be able to check the consistency of their UBO information with the registry and will be required to report discrepancies).
Privacy Protections: Access to the registry will be limited to authorized authorities, but any individual will have the right to review information recorded about himself/herself.
The Global Regulatory Regime
The proposed law is based on international standards set by the FATF (Financial Action Task Force) and the OECD’s Global Forum, which require countries to establish similar registries.
Many leading jurisdictions, including the UK, Singapore, and EU member states, have already implemented comparable legislation, mandating corporations to report UBOs, with mechanisms for verification, supervision, and enforcement (it should be noted that the US Corporate Transparency Act – the CTA has originally set similar requirements, but following numerous legal proceedings was applied only to a very limited segment of foreign entities).
The Israeli bill adopts the internationally accepted “multi-source” approach – combining information from various sources, requiring verification and updates, and imposing effective sanctions.
Establishing the registry is expected to improve Israel’s ranking in international indices (such as the World Bank’s B-READY index) and facilitate global business operations.
Summary and Recommendations
The proposed law (which is, as mentioned, in very preliminary stages) is expected to impose new and significant obligations on corporations, officers, and controlling shareholders.
We suggest that our clients internally examine, in advance, the implications of this legislation, both in order to begin preparing for compliance with its provisions and to raise any reservation and or suggestions before the Ministry of Justice.
We will continue to monitor and update regarding the upcoming legislative processes.
We would be happy to assist you in discussing the memorandum, its content and implications, and to advise on specific issues arising in this context.
We are at your disposal for tailored advice and to assist in adapting your compliance procedures to the proposed law.
*The review was written by Adv. Amir Zolty, Partner and Head of Hi-Tech Practice.