Six Tips for Banking in Israel
It is no secret that over recent years, banking in Israel has become increasingly difficult and frustrating for both foreign residents and new Olim. Unfortunately, the situation hasn't been improving (yet), meaning that customers are often left tearing their hair out, at best, or at worst, finding themselves unable to do simple actions like transferring funds or being able to access their money.
Whilst the reasons for this are well-documented, one of the biggest frustrations that customers have is the lack of clear guidelines as to what paperwork and information the banks want to see. Not only are there different requirements between banks, there can also be different requirements between different branches of the same bank! Even more ludicrous still, requests for certain documents are often made on the whim of the individual banker or manager involved.
Even though it would be impossible to click our fingers and make everything better in one fell swoop, we do bring you 6 tips below that may hopefully ease some of the pain of banking in Israel:
1. START OFF SIMPLE
When making Aliyah, start by opening a plain and simple bank account for every day expenses and receiving funds from the Absorption Ministry. This should mean that the account opening process is relatively easy and that you can begin day-to-day banking. After the account is set up, then start talking about the more sensitive issues, such as funds that you want to transfer in from overseas.
2. COME AS PREPARED AS POSSIBLE
Before you relocate to Israel, prepare relevant financial documents that prove source of funds - things such as recent tax returns or salary slips to show what you have been earning, copies of sales contracts from the property you sold, copy of a Will showing an inheritance you received, your company’s annual reports, etc. Nowadays, it is also a good idea to get a letter from your local accountant declaring that all necessary taxes have been paid on all of your funds and earnings (although even this may not be enough anymore!).
3. NO SURPRISES
Banks hate surprises. Let them know what activity is expected to take place in the account, where the funds are coming from and how they got there in the first place. Activity they understand and are expecting should pass through smoother.
4. TAKE A LOCAL
When going to the bank for the first time, or to to discuss an important issue, go with a Hebrew speaker if your Hebrew is not fluent. Whilst the banker may speak English to a reasonable level, English-speakers will often use terms and jargon that sound confusing or questionable to a non-native speaker, that could lead to onerous and unnecessary demands for information and paperwork. (For example “It is part of my tax-free allowance”, could be understood by the Israeli banker as “I didn’t pay tax on that”.)
5. PROPERTY SOLUTION
When a foreign resident without an existing Israeli bank account is buying a property in Israel, there are methods of transferring funds for the purchase that don’t necessitate having a bank account. These should be looked in to as they can save much time and hassle.
6. WHEN IN ROME
Be Israeli. If the bank is being totally unreasonable (which happens unfortunately) don’t be nervous about calling in an Israeli lawyer. Often there is no legal basis for the demands that the bank is making, and a threatening letter, or a meeting with a lawyer can often be what is needed to cause the bank to back down.
We believe that over the coming years, as new laws come in to affect and guidelines become clarified, banking in Israel will become easier for both foreign residents and new Olim. For now though, the difficulty and frustration are here to stay. It therefore makes sense to cover as many angles as possible in order to limit this, and the above 6 tips should go some way to helping this.
For help and advice on navigating the Israeli banking and investment system, contact us here for a free consultation.