Israel’s New Social Business Law Approved in Preliminary Knesset Vote

Posted by on Jul 24, 2017 in News |  

Due to a lack of specific classification/ecosystem for Social Businesses in terms of business structure, taxation, dividend payouts, ext., Social Businesses as well as the Israeli Government have been unable to maximize the benefits of Social Businesses to Israeli Society.

IVN started working about 1.5 years ago with the Ministry of Justice, representatives from the Prime Minister’s office and other organizations working with Social Businesses to establish parameters which would make it more attractive to entrepreneurs to establish Social Businesses.  Working with attorneys from the Social Business Forum, our very own Jackie wrote a new law called  The Social Business Law, for Knesset review.  MK Roy Folkman reviewed the proposed law and believed in it so much that he is sponsoring it in front of the Knesset for review and passing. 

The New Social Business Law:

Currently, a Social Business must register as either a company or an NGO.  Both registration types have advantages and disadvantages, making neither ideal for a Social Business.  For example, if registered as a company, the Social Business cannot receive donations; on the other hand, registering as an NGO means that the Social Business must pay employee taxes.

This new law, which was approved in a preliminary Knesset vote, will create a specific  business sector definition for Social Businesses which will allow us to negotiate with relevant government offices regarding registration, taxation, government assistance, etc

It is important to note that a similar law was passed in the UK.  After passing, the number of Social Businesses grew quickly by 100s of percent.  We believe that the results will be quite similar here in Israel.

IVN’s Involvement:

IVN initiated all of the activity related to the development of this new law.  From the writing of the law itself, to pushing for and attending meetings with government agencies and personnel, to lobbying relevant stakeholders, etc, the IVN Team was at the forefront of this important, ground breaking legislation.

The law will now go into committee to review comments/revise accordingly before it is presented to the Knesset for First Reading.