Employer of Record Israel
The full EOR guide: how foreign companies become compliant Israeli employers without opening an entity.
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EOR for foreign companies · Israel
EOR services for foreign companies in Israel
Hire Israeli employees and freelancers with no local entity, no Israeli bank account and no bureaucracy. NETO becomes your legal Employer of Record under licensed manpower contractor #1565 · payroll, compliance and one invoice in your currency.
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EOR services let a foreign company hire Israeli talent without opening a local entity or an Israeli bank account. NETO formally employs the worker under Israeli law · handling payroll, tax, compliance and social rights · while you direct the day-to-day work and pay in USD, EUR, GBP or ILS. As a licensed manpower contractor (#1565), it can onboard a first hire, a small team or a market test in a fraction of the time an entity setup takes.
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What is EOR
Employ in Israel, without the entity
An Employer of Record (EOR) is an employment model where a local company formally employs the worker on behalf of a foreign company. You direct the employee's day-to-day work; NETO carries all the legal, payroll and compliance responsibility under Israeli law. The model is popular with international tech companies, startups and multinationals who want to hire Israeli talent without opening a local entity.
- NETO is the legal employer · not a staffing agency and not just a payroll bureau.
- No company registration, no tax file and no Israeli bank account required.
- NETO also handles Israeli freelancers without an active business registration (osek murshe).
How it works
NETO EOR in four steps
A fully digital process. After the agreement is signed, NETO handles every employment formality with the employee and the authorities.
1
Agreement & onboarding
Sign the service agreement with NETO. The process is fully digital and takes minutes to a few hours.
2
Employment contract
NETO issues a formal employment contract to the Israeli employee, compliant with Israeli labor law.
3
Monthly payroll
NETO runs salary, social benefits and all mandatory deductions. You receive a single invoice in your preferred currency.
4
Ongoing management
NETO manages all ongoing HR and compliance, so you can focus entirely on your business.
Why NETO
Why foreign companies choose NETO EOR
Setting up an Israeli subsidiary takes weeks to months of registration, accounting and legal work. An EOR reaches a compliant hire in a fraction of the time · ideal for a first hire, a small team, or a market test.
Fast onboarding
Minutes to a few hours after signing · NETO handles all the employment paperwork.
Full legal compliance
Employment contracts, social rights and pension contributions, in line with Israeli labor law.
Flexible payment
Pay in USD, EUR, GBP or ILS · invoices in English for international accounting.
No local footprint
No company registration, no tax file and no Israeli bank account needed.
Reduced risk
NETO bears the legal-employer risk, protecting you from Israeli labor-law exposure.
Security first
A licensed Employer of Record (No. 1565)
In Israel, the law requires a specific license to employ workers on behalf of others. NETO operates under Manpower Contractor License No. 1565, issued by the Ministry of Labor under the Employment of Workers by Manpower Contractors Law, 1996. For a foreign company, that license is your safety net.
- Licensed & supervised · the license is valid until 28.02.2029 and verifiable on the government portal.
- Full labor-law compliance · employment contracts, social rights, severance and pension all handled.
- Transparent reporting · monthly payroll reports and full documentation of employee costs.
A foreign tech firm hires a developer in Tel Aviv
An overseas company finds a talented developer in Israel but does not want to open a subsidiary. Two common options:
Option 1 · pay as a contractor
Simple short-term, but risky. If the developer works only for the company, gets daily instructions and uses company tools, they may be deemed an employee, exposing the company to retroactive severance and benefits in a dispute.
Option 2 · hire via EOR
The company signs with NETO, the developer is onboarded as a salaried employee with full rights, and NETO handles the rest. One invoice covers salary, employer cost and management fee. Simple, legal and safe.
Deep details
Compliance & payment, in detail
Expand the topics most foreign companies ask about before their first Israeli hire.
What NETO is responsible for as the legal employer
As the Employer of Record, NETO carries the full set of employer obligations under Israeli labor law:
- A compliant employment contract and lawful payslips.
- Salary, social rights, pension contributions and all mandatory deductions.
- Severance pay law, salary agreements and termination handled in line with the law.
- Coordination of health insurance, pension and all mandatory employee benefits.
Currencies, invoicing and payment flow
You pay in USD, EUR, GBP or ILS, and NETO issues invoices in English to fit international accounting requirements. Each month you receive a single invoice covering the employee's salary, employer contributions and NETO's management fee · no local payroll system to run and no Israeli bank account to open.
What the service costs
Cost depends on the employee's salary and the scope of service. The largest component is always the salary itself including employer costs, plus a management fee. There is no entity-setup cost, no ongoing accountant or legal retainer and no internal HR or payroll system to maintain. Contact NETO for a quote tailored to your role and headcount.
Freelancers and contractor conversion
NETO also handles Israeli freelancers contracted by foreign companies, including those without an active business registration (osek murshe), managing invoicing and compliance on both sides. An existing Israeli contractor can be converted to a salaried EOR employee, giving the relationship compliance protection going forward.
Data security & privacy
Employee data is managed securely and in accordance with Israeli and international privacy regulations. You get transparent, upfront pricing with no hidden fees and clear visibility of every employee cost.
Side by side
Local entity vs global EOR vs NETO EOR
For 1–10 hires or a market test, an EOR reaches the same compliant outcome in a fraction of the time and cost. NETO adds a local Israeli license and on-the-ground expertise.
| What it takes | Open your own Israeli entity | Generic global EOR | EOR with NETO |
|---|---|---|---|
| Time to first hire | Weeks to months | Days | Minutes to a few hours |
| Local entity, bank account & tax file | All required | Not required | Not required |
| Israeli manpower license | You must comply directly | Often via a local sub-processor | Held in-house (#1565) |
| Labor-law liability | On your company | Shared with a partner | On NETO (legal employer) |
| Payment currency | ILS only | Major currencies | USD, EUR, GBP or ILS |
| Invoicing | Local bookkeeping | English invoice | One English invoice |
| Exit / wind-down | Entity dissolution | Contract end | Clean, simple exit |
Who it is for
Built for companies hiring across borders
International companies hiring in Israel
Startups, multinationals, tech companies and consultants that want to hire Israeli employees with no local entity · legal employment from day one.
Israeli freelancers for foreign clients
Israeli freelancers contracted by overseas companies can be employed through NETO with full compliance and proper social benefits, without the complexity of direct international employment.
Companies testing the Israeli market
Explore the Israeli market before committing to a full local entity. Use NETO EOR as a flexible, low-risk way to hire and test local talent first.
FAQ
What foreign companies ask
Can a foreign company hire in Israel without a local entity?
Yes, through an Employer of Record. NETO becomes the legal employer on your behalf · no subsidiary, Israeli bank account or local tax file. You direct the work while NETO handles contracts, payroll and compliance.
How long does it take to start?
Typically minutes to a few hours. After the agreement is signed, NETO handles all employment paperwork with the employee and the authorities. The entire process is digital.
In what currencies can I pay?
You can pay in USD, EUR, GBP or ILS. NETO issues invoices in English to suit international companies' accounting requirements.
Is NETO EOR legal in Israel?
Yes. NETO holds Manpower Contractor License #1565 from the Israeli Ministry of Labor, authorizing it to employ workers on behalf of client companies. Verify on the Ministry of Labor website.
What is the difference between EOR and a staffing agency?
With an EOR you choose the employee and direct their work, while NETO handles only the legal employment. A staffing agency typically also recruits and assigns workers. EOR gives you full control with none of the legal headaches.
Can NETO EOR also handle freelancers?
Yes · including Israeli freelancers without an active business registration (osek murshe). NETO manages invoicing and compliance for international companies working with Israeli freelancers.
Hire your first Israeli employee, compliantly
Register as an employer and onboard Israeli talent in hours, not months · no entity, full compliance and one invoice in your currency. Prefer to work as a freelancer? Register on the freelancer track.
In summary
Foreign companies that want to hire Israeli employees and freelancers face complex regulatory and legal requirements. NETO EOR handles all of them · no local entity, no local accountant, no bureaucracy, just one invoice. The result is an Israeli employee working legally, on time and in an organized way, under licensed manpower contractor #1565.
- Fast · onboard in minutes to a few hours.
- Legal · full compliance with Israeli labor law.
- Simple · one English invoice in USD, EUR, GBP or ILS.
- Low risk · liability sits with NETO as the legal employer.
More on hiring & employment in Israel
Israel payroll, explained
Gross-to-net, employer contributions, pension and tax filing · how Israeli payroll actually works.
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NETO EOR solutions
How NETO's licensed EOR model is structured · contracts, compliance and one consolidated invoice.
Read more
Outsourcing to Israel
Build a remote R&D, engineering or support team in Israel through an EOR · fully compliant.
Read moreNote: the information on this page is for general informational purposes only and does not constitute legal advice. For specific legal questions, consult a qualified Israeli employment lawyer.
