Relocation: Cutting Ties?
Relocation sounds like an exciting adventure. A person moves to another country, sometimes for an extended period, to experience new professional opportunities, improve their standard of living, or simply refresh. But what happens to their legal status in Israel while they work abroad? Many people do not realize that relocation does not automatically sever legal ties with Israel. Often, despite the move, individuals remain legal residents of Israel, with all the associated legal consequences.
What Really Matters
When talking about relocation, it's crucial to understand that your legal status in Israel does not change automatically. This means you may still be considered a resident for many purposes, such as social security and taxation.
Israeli law looks at several factors to determine whether a person is considered an Israeli resident during relocation. Among other things, the duration of your stay abroad, your ties to Israel, and where your immediate family is located are considered.
One of the central legal issues is the National Insurance Law, which defines who is considered an Israeli resident for the purposes of rights and obligations in social security. You may need to continue paying national insurance premiums even while abroad if your legal ties to Israel are not severed.
When Is It Relevant — Checklist
- ✓Are you continuing to pay national insurance in Israel?
- ✓Do you have permanent housing in Israel?
- ✓Are your children attending educational institutions in Israel?
- ✓Do you own property in Israel?
- ✓Do you have close family ties in the country?
- ✓Are you planning to return to Israel soon?
The National Insurance Law and What It Means
The National Insurance Law in Israel states that a person is considered an Israeli resident if they live in the country or have significant ties to Israel, even if they are temporarily abroad. This means you may be required to continue paying national insurance premiums and maintain your rights.
In many cases, people relocating are surprised to discover they are still required to pay national insurance, which can lead to unexpected expenses.
Questions Everyone Asks — and No One Asks the Lawyer
Real Situations — Which Side of the Line Are You On?
- Software engineer moving for two years to a branch in the USA — still considered an Israeli resident if they have family in the country.
- Financial advisor opening an agency in Cyprus — may need to reassess their legal status.
- Sales manager moved abroad with no intention to return — may eventually cease to be considered a resident.
What to Do Right Now
The first step is to check your status with the National Insurance and Tax Authorities in Israel before starting relocation. Do not sign documents severing ties without legal advice.
If you do nothing, you might find yourself with unexpected debts to the National Insurance or Tax Authorities and unclear residency status. Contact me to get personalized legal advice to protect your rights.