The sources of the requirements

The Prohibition on Money Laundering (Identification, Reporting and Record-Keeping Obligations of Banking Corporations for the Prevention of Money Laundering and Terrorist Financing) Order, 2001 (the “Banking Order”) sets the details the bank records and the documents it records them from. Section 2A of the Order requires the bank to know the customer, including the source of the funds and the purpose of the account, and Proper Conduct of Banking Business Directive 411 provides that the assessment is made through a structured, computerised know-your-customer questionnaire (section 29).

FATCA is the United States law that requires financial institutions outside the United States to report accounts of US citizens and residents. CRS is the OECD Common Reporting Standard, under which countries exchange information on accounts held by foreign tax residents. In Israel they were implemented by the Income Tax (Implementation of the FATCA Agreement) Regulations, 2016 (the “FATCA Regulations”) and the Income Tax (Implementation of a Uniform Standard for Reporting and Due Diligence of Information on Financial Accounts) Regulations, 2019 (the “CRS Regulations”). Both require the bank, as a rule, to obtain a self-certification of tax residence from the account holder when the account is opened.

An individual resident in Israel

The bank records name, identity number, date of birth, sex and address (section 2(a) of the Banking Order), and verifies them against the identity card and the Population Registry (section 3(a)(1)). Under Proper Conduct of Banking Business Directive 422, a bank that does not decide when the application is made gives the customer a written confirmation and, where the decision depends on documents, a list of them (section 6). It gives its decision in writing, with reasons, within 10 business days from the later of the date of the application and the date the documents are received (section 7(a)). Sections 8 and 9 of the directive limit the documents the bank may require. An individual resident in Israel aged 16 or over can also open an account online, under chapter C of Proper Conduct of Banking Business Directive 367.

Face-to-face identification

The bank identifies every account holder and authorised signatory face to face before the first transaction in the account. The identification may be carried out by a representative or agent of the bank, a lawyer licensed in Israel, an Israeli diplomatic or consular representative abroad, or an authority designated under article 6 of the Apostille Convention, and also in another manner approved by the Supervisor of Banks (section 6(a) of the Banking Order). A notary is not listed in the section.

A new immigrant

Under section 3(a)(1) of the Banking Order, an oleh certificate is treated as an identity card for 30 days from its issue. Appendix B5A to Directive 411, in force from 30 April 2026, allows the bank, where details recorded from an oleh certificate cannot be verified against the Population Registry, to verify them against a foreign passport and to complete verification against the Registry within 90 days of opening the account. Directive 422 applies to an individual who is a resident within the meaning of the Population Registry Law, and therefore also to an oleh. An oleh who is also a US citizen completes Form W-9.

A foreign resident

For a foreign resident, the “identity number” is the number of the passport or travel document and the name of the issuing country (section 1 of the Banking Order). The bank records the details from a foreign passport and compares them with a further document bearing a photograph and an identity number. Where there is no such document, the comparison is made with a document bearing a name or identity number together with an address or date of birth (section 3(a)(2)).

Directive 422 does not apply to a foreign resident, other than a foreign worker lawfully living in Israel, and a foreign resident cannot open an account online under Directive 367. Section 28 of Directive 411 lists “a foreign resident customer with no connection to Israel” among the risk factors.

A foreign resident is exempt from tax on interest on a deposit under the Income Tax (Exemption from Tax on a Deposit of a Foreign Resident) Order, 2002. Under regulation 4 of the Income Tax (Withholding from Interest, Dividends and Certain Gains) Regulations, 2005 (the “Interest Withholding Regulations”), the bank does not withhold tax from such interest where the recipient has filed a declaration of entitlement. The declaration is made on Form 2402/A, “Declaration of a Foreign Resident”, and under the form it is signed once every three years and filed again when a detail in it changes.

An Israeli company and a foreign company

For a corporate account, the bank records the name, registration number, date of incorporation and address (section 2(a) of the Banking Order). The documents for an Israeli company are the certificate of registration, the constitutional documents, a lawyer’s confirmation that the company exists or verification in the register, a resolution of the competent organ to open the account and a resolution on the authorised signatories (section 3(a)(3)). For a foreign company, a document evidencing its registration in the country of incorporation and equivalent documents are required (section 3(a)(4)), and a copy of such a document may also be certified by a notary (section 3(b)).

The bank records the controlling persons of the company, and in a chain of holdings traces control to the individual at the end of the chain (section 45 of Directive 411). For FATCA and CRS the company declares whether it is an active entity, a passive entity or a financial institution. For a passive entity the bank also determines the country of residence of each controlling person, on the basis of a self-certification (regulation 5 of the CRS Regulations). A foreign entity is sometimes also asked to complete Form W-8BEN-E, and a US entity Form W-9.

A trust and an estate account

For a trust account, the bank establishes the nature of the trust, its control structure and the basis on which it was created, and records the settlor, the trustee, the protector if there is one, the beneficiaries and anyone who controls the trust in practice (sections 53 and 54 of Directive 411). For a trust with many beneficiaries who can be characterised, the bank may record the beneficiaries in general terms, provided the account holder undertakes to disclose their identity when they are paid (section 55). These sections also apply to legal arrangements similar to a trust (section 57).

For an account opened by a person appointed by a court or by the Registrar of Inheritance Affairs, such as an estate administrator, the bank does not record a beneficiary. It notes the appointment in the account records and keeps a copy of the appointment document (section 2(b) of the Banking Order).

The declaration of beneficiary and controlling person

When an account is opened, the account holder declares, with an original signature, whether they act for themselves or for another person, and a company also declares who controls it (section 4 of the Banking Order). The declaration is made on the form in the first schedule to the Order, “Form of Declaration of Beneficiary and Controlling Person”, or on another form approved by the Supervisor of Banks (section 4(c)). Banks issue the form under internal form numbers of their own. Section 56 of Directive 411 prohibits opening an account for a customer who acts for a third party and does not provide that party’s details.

US citizens and residents (FATCA)

In June 2014 Israel and the United States signed an agreement to implement FATCA. Amendment 227 to the Income Tax Ordinance, 2016, added sections 135B to 135H to the Ordinance, and the FATCA Regulations require the bank, as a rule, to obtain a self-certification from the account holder when the account is opened (regulation 3(4)(a) for an individual and regulation 5(3) for an entity). The bank reports accounts of a “US person” to the Israel Tax Authority, which passes the information to the US tax authority.

Under the agreement, a US person is a US citizen or resident individual, a partnership or corporation organised in the United States, and certain trusts and estates. A US citizen living in Israel is a US person, including when they are also an Israeli citizen. For existing accounts, Annex I to the agreement lists the US indicia that lead the bank to check whether the account holder is a US person: US citizenship or residence, a US place of birth, a US address or telephone number, standing instructions to transfer funds to an account in the United States, and a power of attorney or signatory authority granted to a person with a US address.

For an existing account of a person born in the United States who is not a US citizen, the account holder certifies that they are not a US citizen or resident for tax purposes, presents a passport of another country, and provides a Certificate of Loss of Nationality or a reasonable explanation of why they do not have one or did not obtain US citizenship at birth (Annex I to the agreement, section II.B.4(a)). For an existing account in which a US indicium is found and no documentation curing it is provided, the agreement requires the bank to treat the account as a US reportable account. Banks in Israel publish policies under which they will not open an account or allow activity for a customer who refuses to sign the declaration.

Tax residents of other countries (CRS)

The CRS Regulations require the bank to obtain, when the account is opened, a self-certification of the countries of tax residence and the tax identification number in each of them (regulations 3 and 5). Banks draft the declaration in their own wording, for individuals and for entities, and in the declarations they publish the customer undertakes to notify the bank within 30 days of a change in the details.

The Israel Tax Authority publishes each year the list of participating jurisdictions, which send information to Israel, and the list of jurisdictions to which Israel sends information. The list published on 28 December 2025 contains 107 participating jurisdictions and 85 jurisdictions to which Israel sends information. The United States is on neither list, and information is sent to it under the FATCA agreement.

Forms W-9 and W-8

Forms W-9 and W-8 are forms of the US Internal Revenue Service (IRS). An Israeli bank asks for them as part of its FATCA review. Under Annex I to the agreement, the self-certification may be on an IRS form or on a similar agreed form.

List of forms

Further reading

Sources

Prohibition on Money Laundering Order (Banking Corporations), 2001 (Hebrew) · Proper Conduct of Banking Business Directive 411 and Circular 2843 (Hebrew) · Directive 422 (Hebrew) · Directive 367, Circular 2847 (Hebrew) · Amendment 227 to the Income Tax Ordinance, 2016 · Income Tax (Implementation of the FATCA Agreement) Regulations, 2016 · Income Tax (Implementation of a Uniform Standard for Reporting and Due Diligence of Information on Financial Accounts) Regulations, 2019 · Income Tax (Exemption from Tax on a Deposit of a Foreign Resident) Order, 2002 · Income Tax (Withholding from Interest, Dividends and Certain Gains) Regulations, 2005 · FATCA agreement between Israel and the United States · IRS Instructions for the Requester of Forms W-8