Summary
- Golden rule: do not send anything to Israel until you have written approval from the compliance department of the bank that will receive the funds.
- Source of funds: the bank asks you to prove where the money comes from (statements, tax assessments, sale deeds, inheritance documents). The period of documents required varies from bank to bank: ask for it in writing.
- Role of your lawyer: your Israeli lawyer manages the compliance file before you sign the contract with the developer.
- Paying the developer: the funds arrive in an Israeli bank account in your name or, under certain conditions, in your lawyer's escrow account, and are then paid to the developer according to the contract's payment schedule.
- Currency exchange: the gap between the bank's rate and the market rate varies. Compare written quotes before converting.
1. Why Are Israeli Banks So Strict?
Israeli banks (Leumi, Hapoalim, Mizrahi-Tefahot and Discount, among others) apply the 2000 anti-money-laundering law, as well as international rules on the exchange of tax information.
For them, receiving a large transfer from a non-resident means being able to explain where the money comes from. If funds arrive without an approved file, the bank may freeze them while it checks, or send them back. Processing times are then unpredictable, and they can put you behind the developer's payment schedule.
2. The Documents Banks Usually Ask For
For each transfer, the bank wants to know two things: where does this money come from, and has the related tax been paid? The exact list depends on each bank and each situation: your lawyer confirms it before anything is sent.
| Source of capital | Documents frequently requested (in French, sometimes translated) | Point to watch |
|---|---|---|
| Savings / salary | Tax assessments, payslips, French bank statements. | Savings must be consistent with declared income. |
| Property sale in France | Authentic deed of sale (notarial deed, French side), notary's transfer certificate. | Funds must not have passed through an unidentified third-party account. |
| Inheritance / gift | Estate declaration, certificate of heirship, proof of payment of duties. | For a recent gift, the bank may ask for the source of the donor's funds. |
| Dividends / sale of a business | Minutes of the shareholders' meeting, tax return package, share transfer deed, accountant's certificate. | The bank checks the underlying business activity. |
3. The Developer's Payment Schedule
In an off-plan purchase, the contract sets out a payment schedule. A late transfer can have consequences: late-payment interest, or even a formal notice from the developer. The exact terms are in your contract, and they vary from one project to another.
Practical tip: do not commit to a tight payment date if your account in Israel is not open or if the compliance file has not started. Have your lawyer review the schedule before you sign.
Two useful points on buyer protection, from the 1974 law on the sale of apartments (guarantee of sums paid):
- The developer provides a bank guarantee, in principle within 14 business days after the payments concerned.
- Without a guarantee, the buyer does not pay more than 7% of the price.
4. EUR/ILS Exchange: Bank or Specialist Provider
Letting your Israeli bank automatically convert your euros into shekels is often the least advantageous option, but not always. The gap against the market rate and the commissions vary, and they differ from one provider to another.
- The costs to ask about: the rate applied, the gap against the market rate, fixed commissions and the sending bank's fees.
- A purely hypothetical example: on a purchase of 3,000,000 ₪ (about €750,000), with a 2% gap, the difference would be €15,000. This figure illustrates the effect of a gap. It is not an observed rate.
- The method: request written quotes from your bank and from one or two licensed exchange providers, then compare the final amount received in shekels. Check the provider's licence with your lawyer.
5. The Steps, in Order
- Preliminary document audit: before reserving a unit, send your tax assessments and statements to your Israeli lawyer.
- Bank account or lawyer's escrow account: opened in person in Israel, or by power of attorney, the form of which should be confirmed with your lawyer.
- Written approval from the bank: the bank confirms it can receive the funds and states the conditions.
- International transfer: in euros, with your name and the file reference.
- Payment to the developer: the converted funds are paid according to the contract's payment schedule, with the corresponding bank guarantee (see above).
Preparing a transfer for a new-build project in Israel? Our advisors and our network of partner lawyers check your supporting documents in advance. 0 ₪ in agency fees for the buyer, with our fee paid by the developer.
This guide is for information only: confirm every point with your lawyer and your bank.