Thinking of managing two businesses in Israel? Lots of people are doing that, combining two passions or different market demands, and you can too, but there are some key rules to keep in mind.
Registering your business
In Israel, a freelance business is tied directly to your Teudat Zehut number. That means you, not just your business, are the registered entity, and you can operate more than one business under that same ID.
Under the VAT Registration Regulations (1976), you’re allowed to register multiple businesses or business units separately — as long as certain conditions are met:
- You must maintain separate accounting records for each one. Do you have a source for this? I’m not sure about this.
- Just because they’re registered separately doesn’t mean they’re each exempt from VAT. If your combined income from both businesses is above the Osek Patur (VAT exempt) threshold, you will be required to pay VAT. It is not possible to have one business as Osek Murshe and the other as Osek Patur; once one of your businesses is Murshe, the other is as well.
- You’ll need to submit a formal request using the designated form and commit to notifying the VAT office if these conditions are no longer being met.
Also, when registering with the VAT authority, you’ll need to designate one business as the primary occupation and the other as secondary. From there:
- You’ll file one annual report.
- You can submit two profit and loss statements, but it’s not required.
- You’re allowed two sets of books (one per business), or you can choose to keep just one.
Manage your time
Running two businesses means you need to devote enough time to each one. Block out your time so you know when you’re working on each one, and if you need to be in different locations, when you will be where. Do your two businesses require equal attention? Make sure they get equal time. But if one is simpler to manage and requires less work, assign the bulk of your time to the other one.
Don’t forget to block out time for your personal life as well, so your social and family time aren’t completely taken over by your businesses.
Delegate, delegate, delegate
You can’t do it all! Hire excellent employees or work with freelancers who can take certain tasks off your plate. Choose people who are experienced and proficient, requiring very little oversight and management. When you have people you trust helping you out, you can focus on the tasks that only you can do.
Organize your files
Working in more than one office or on more than one device? Keeping your files in the cloud will ensure that you can access them wherever you are. But don’t let chaos reign — create folders for each business and maintain separate records. If you’re using a CRM or task management system, choose one that allows for multiple business profiles under one account.
Dreaming of painting houses one day and translating documents the next? If you’re organized and efficient, your businesses can both be well run, compliant with Israeli tax law and provide you with the work-life balance you crave.
