How to win government contracts and tenders in Israel

A Comprehensive Guide to Securing Government Contracts in Israel

The State of Israel provides significant opportunities for businesses looking to secure government contracts in sectors such as infrastructure, technology, defense, healthcare, and energy. However, successful participation requires an in-depth understanding of Israel's regulatory landscape, international agreements, and documentation requirements. This guide, derived from governmental and intergovernmental sources, outlines crucial information for companies aiming to engage effectively in Israeli public procurement processes.

Key Trade Policies Influencing Procurement

Free Trade Agreements

Israel maintains an extensive network of Free Trade Agreements (FTAs) that facilitate market access and reduce trade barriers for foreign companies. As of February 2025, Israel has 16 active FTAs involving over 48 nations, including the United States, European Union, Mercosur, South Korea, the UAE, and Vietnam. These agreements commonly include clauses on public procurement, promising equal and transparent bidding processes for enterprises from signatory states. A key example is the US-Israel Free Trade Agreement, active since September 1985, which provides preferential tariff treatment and mandates transparent competitive bidding for qualified American firms. Recent agreements, such as the Vietnam-Israel FTA effective as of November 2024, further streamline procurement methodologies, notably through customs and standards recognitions.
[Source: Israel's Ministry of Economy and Industry]

World Trade Organization (WTO) Commitments

Israel joined the General Agreement on Tariffs and Trade (GATT) in July 1962 and the World Trade Organization (WTO) in April 1995. Its procurement policies reflect the WTO's key principles of transparency, fairness, and non-discrimination associated with the Government Procurement Agreement (GPA). While full GPA membership remains pending, Israeli procurement operations frequently incorporate GPA-aligned standards concerning notice publication, procurement thresholds, and complaint-handling procedures.
[Source: World Trade Organization (WTO)]

Registration Requirements and Establishing a Legal Entity

Business Structures

Foreign companies planning to participate in public tenders must first establish a legal entity in Israel. The popular entity format is the private limited liability company (Ltd.), requiring at least one shareholder and one director, without prescribed minimum capital. Incorporation procedures include:

• Submitting company incorporation documents in Hebrew, including Articles of Association certified by an attorney.
• Approval by the Registrar of Companies, subsequent enrollment with the Income Tax Authority and Value Added Tax (VAT) Department.
• Registration with the National Insurance Institute (NII) for employee social contributions and health insurance payments.

Non-profit organizations, branches, and subsidiaries are also possible but less common than private limited companies.
[Source: Papaya Global guide to business establishment in Israel]

Employer Compliance

Companies aiming to hire local employees must comply fully with Israeli labor laws. These laws require clearly written employment contracts detailing terms, compensation, benefits, and working conditions. Employers must also handle monthly income tax and NII contributions, maintain employee declarations (Form 101), and provide robust recordkeeping. Non-compliance may result in penalties, disqualification from government contracting, or regulatory audits.
[Source: Papaya Global]

Documentation Standards for Tender Submissions

Mandatory Documentation

Typically, tender submissions demand comprehensive technical, financial, and administrative documentation:

• Technical Proposals: These include detailed methodologies, schedules, resource management plans, and environmental and security assessments relevant to the project scope. Technology projects emphasize data security and interoperability, while infrastructure projects require comprehensive environmental impact analyses.
• Financial Documentation: Clearly defined cost breakdowns detailing labor costs, materials, overhead expenses, and submission of independently audited financial statements verifying the company's financial stability and accountability.
• Administrative Compliance: Documentation proving compliance with anti-discrimination, ethics, anti-boycott, and anti-investment policies (e.g., disclosure of dealings with nations under sanction), ensuring ethical and transparent business practices.

Examples from recent European Union and Israeli Ministry of Defense tenders illustrate stringent documentation expectations clearly aligned with international standards and practices.
[Sources: EU Tenders, Israel Ministry of Defense]

Strategic Recommendations for Success

Utilize Online Platforms for Tender Opportunities

Israel provides centralized digital platforms for real-time procurement updates, submission deadlines, bid documentation, and related announcements. Key platforms include the Ministry of Finance portal (https://www.gov.il). Regular monitoring and subscription to alerts on these platforms significantly enhance organizations' ability to respond promptly to relevant tenders.
[Source: Government of Israel Online Procurement Portal]

Leverage Local Expertise to Navigate Regulatory Complexities

Engaging local legal advisors or specialized consulting firms is highly recommended. Such expertise is especially critical when handling land rights, permits, and specialized approvals—such as construction permits requiring complex documentation on ownership, lease agreements, environmental assessments, and geotechnical studies. Understanding local cultural and legal nuances can greatly reduce compliance risks and expedite administrative processes.
[Source: Gov.il guidelines on construction permits]

Prioritize Stakeholder Engagement and Relationship-Building

Building professional relationships by participating in industry events, business forums, or trade missions organized by entities such as the Israeli Chamber of Commerce or Export Institute ensures stronger visibility and improved competitive positioning. These interactions allow familiarity between prospective bidders, decision-makers, policymakers, and incumbents, potentially aiding long-term success and collaboration in Israel's procurement ecosystem.
[Source: Government-sponsored business forums and matchmaking events]

Conclusion: Achieving Procurement Success in Israel

Securing government contracts in Israel requires a comprehensive strategic approach encompassing thorough awareness of international trade obligations, careful local entity set-up, labor compliance, meticulous documentation preparation, and proactive stakeholder engagement. By closely aligning business practices with Israel's evolving regulatory framework and leveraging official resources, international firms can maximize their competitive advantage in the Israeli procurement market. Prospective bidders are encouraged to monitor ongoing international negotiations and bilateral agreements—such as upcoming FTAs with Bahrain, Moldova, and Serbia—that could further enhance market opportunities in Israel.

[1] https://home.treasury.gov/news/press-releases/sb0043
[2] https://www.buyitinisrael.com/guide/how-does-land-ownership-and-registration-work-in-israel/
[3] https://www.nae.usace.army.mil/Portals/74/docs/Contracting/2025/Solicitation%20W912WJ25Q0051.pdf?ver=130K7SgxabuUM4fabHHmbA%3D%3D
[4] https://en.wikipedia.org/wiki/Free_trade_agreements_of_Israel
[5] https://www.tendersinfo.com/israel-contracts.php
[6] https://www.papayaglobal.com/countrypedia/country/israel/
[7] https://www.lathamreg.com/2025/02/president-trump-issues-executive-order-directing-agencies-to-review-spending-through-government-contracts-and-grants/
[8] https://wtocenter.vn/fta/200-vietnam--israel-vifta/1
[9] https://en.wikipedia.org/wiki/Government_procurement
[10] https://www.calcalistech.com/ctechnews/article/rjlgqcbsye
[11] https://www.cfr.org/article/us-aid-israel-four-charts
[12] https://www.eeas.europa.eu/eeas/eeas-tender-official-residence-eu-ambassador_und_en
[13] https://roads.maryland.gov/OPCM/2A_Final_AE_IDIQ_Checklist_LPA_projects_WITHIN_09.25.24_FHWA.pdf
[14] https://www.gov.il/BlobFolder/rfp/rfp03032025/he/ITALY%20ISRAEL%20Call%20for%20Proposals%202025.pdf
[15] https://new.embassies.gov.il/ghana/en/news/economic-and-trade-mission-holds-forum-cannabis-industry
[16] https://www.gov.il/en/service/additional-construction-guide
[17] https://www.iaa.gov.il/en/tenders-and-contracts/active-tenders/
[18] https://www.iaa.gov.il/en/land-border-crossings/yitzhak-rabin/notifications-and-updates/