Subject: Incorporation of Companies in Israel
Author: George Rosenberg
Date: January, 2005

1. Name

There are no limitations save that word "limited" or an abbreviation thereof must be
included, and the name cannot be misleading or similar to an existing name.

2. Capitalization

No minimum required.

3. Shareholders

Minimum one shareholder in a private and a public company. Shareholders may be
corporate or individual. Shares can be either registered or issued to bearer. All of
the shareholders of a company may be foreign residents.

4. Directors

Minimum one director in a private company. Directors may be corporate or
individuals and all directors may be non resident. Director(s) must file a
declaration upon incorporation (see below).

5. Registered Office

Company must have registered office in Israel, notification of which must be filed
along with the request for registration. If all shareholders/directors are non
residents, company must have agent in Israel.

6. Formation
By-Laws, signed by the subscriber(s) (incorporator(s)), together with
a request for registration of a company, directors' declaration and prescribed fee
(currently NIS 2,182, approximately US$ 485) must be filed with Registrar of
Companies. After approving the request, Registrar issues Certificate of Registration,
upon which Company is deemed in existence. By-Laws must be filed in Hebrew,
and may be filed with an English translation.

In the case of non resident clients the subscribers may be local lawyers (or their
trust companies), who transfer their shares to the clients after incorporation.

Normally a company may be formed within 48 business-day hours from filing of
documents.

7. Bank Account

Once the company is formed, a bank account may be opened up with any bank in
Israel by filing copies of Certificate of Registration and By-Laws, , and appropriate
directors' resolution together with standard documentation required by the bank.
Signatories at the bank may be non residents.

In light of the Anti-Money Laundering legislation,enacted in 2000, the banks in Israel exercise
much more caution and due diligence in connection with opening
bank accounts for foreigners, than has been the practice in the past.

8. Currency Control

As of May 1998, the regime of currency control in Israel has been virtually abolished.

Extensive reporting obligations apply to all Israeli residents in respect of transactions
with foreign residents or in foreign currency. The minimal threshold for the reports is
normally US$ 5 million. Special reporting obligations apply to banking corporations,
currency exchangers, brokers and portfolio managers.

The Foreign Currency Controller is authorized to demand such reports, and the
information contained in the reports is confidential.

9. Miscellaneous and Annual requirements

Shareholders must appoint auditor every year. Company must open file with
Income tax authorities, and must file annual tax return in addition to filing annual
return with Registrar of Companies. Costs for preparing annual tax returns normally
range between US$3,000 - US$5,000, and vary in accordance with the volume of the
company's activity.

Annual fee payable to registrar is currently the equivalent of approximately
US$210.

10. Cost

Total cost of formation, including payment of fee to Registrar and legal fees, is
US$2,000 plus V.A.T. which currently is 17%. This includes preparation and filing
of incorporation documents, notification of registrar after incorporation regarding
appointment of directors and registered office, and preparation of initial
organizational minutes and banking resolution, if required. The said amount does
not include any disbursements (save fee to Registrar) such as courier, translations,
legalization at embassy, etc., if required.

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