Israel Cuts Red Tape to Ease 'Bureaucratic Burden' on Small Businesses

New business licensing reform intends to make opening new small businesses like hair salons, kiosks and groceries faster and more streamlined

A kiosk in Jerusalem open on Shabbat, November 2016.
Emil Salman

The cabinet approved on Sunday a reform of business licensing to make it easier and faster for new businesses to get approvals with the aim of encouraging the growth of small businesses.

“The root of economic development is in small businesses. Small businesses go through bureaucratic hell. The ministers and I are working very hard during meetings on regulation and other reforms in order to lessen the bureaucratic burden on small businesses,” Prime Minister Benjamin Netanyahu told the cabinet.

Under the new rules, many new businesses will be exempt from needing a license at all while the remainder will be divided into four categories based on their risk and how complicated they are and subject to a specific approval track.

The lowest-risk business will only require a declaration by the owners. Those in the intermediate category and enhanced intermediate categories will enjoy accelerated approval process while only the highest risk venture will still be subject to the existing process.

In the accelerated process, a business is entitled to get approval in no more than 28 days after submitting an application to a local authority. After that, the license is deemed granted automatically. The business itself can open before the owner has formally received a license, under the new rules.

The new rules are aimed at small business like hair salons, kiosks and groceries.