By Amit Acco, Partner |

Foreign contractors who are expected to perform work in Israel often inquire whether they are required to register in Israel for the performance of their contract and if this requirement can be waived under special circumstances. Israeli law mandates that any person or company who wishes to carry out construction engineering works, as defined in the Israeli Contractors Registration Law, must be registered in the Contractors Register unless they do not have a permanent place of business in Israel and are participating in an international tender whose purpose is to carry out works in Israel.

Waiver from the need to obtain a contractor license

To obtain a waiver from the need to have a contractor license, the non-Israeli contractor must participate in an international tender and obtain an exemption from registration from the Minister of Construction and Housing. However, if this is not the case and the contractor wishes to perform work, they must be registered in accordance with the provisions of the law and in the contractor’s register.

It is recommended for Israeli project managers to refer foreign contractors to be registered or waived the need to be registered in the contractors’ register for the proper branches they are allowed to engage in and in which financial scopes. Israeli courts have ruled that it is not enough for the main contractor alone to be registered in the contractors’ register; the foreign contractor who actually carries out the construction must also be registered with the contractor registry in relation to that work.

Contractor Classifications

The Contractors Registration Law divides the fields of construction into construction branches and sub-branches, and each contractor is registered in the branch or sub-branch in which they are allowed to work. The level of classification of contractors for each contractor is determined by the Registrar of Contractors, and according to this level, the financial scope of the sum of the works is determined, allowing the contractor to perform. The contractor classification level is given on a scale of 1 to 5, and it determines the scope of work in each branch that the contractor is allowed to perform on one construction site.

Offences and Criminal law Implications

Criminal proceedings for offenses under the Contractors Registration Law are of great public importance due to the risk that these offenses may cause in terms of public safety, which may sometimes involve human life. Section 16 of the provisions of the Law on Registration of Contractors states that anyone who has performed work contrary to the Law on Registration of Contractors or used the title of contractor for construction engineering work without being entitled to it, shall be sentenced to six months imprisonment or a fine.