State Comptroller Matanyahu Englman said Israel’s business licensing system has improved thanks to the licensing reform, but remains heavily burdened by bureaucracy. His report, published Tuesday and based on a review conducted between August and November 2025, examines how government decisions over the past 20 years have affected business activity and licensing, with a focus on local authorities and the reform introduced under Amendment 34 to the Business Licensing Law.
The report found that 20.5% of all businesses requiring a license, 28,351 out of 138,034, operated in 2024 without a business opening permit. Englman noted that the rate has stayed above 20% throughout 2017 to 2024, but also that it fell sharply after the reform took effect in 2021, from about 27.8% that year to 20.5% in 2024. He also reported improvement in compliance with agency requirements, including a drop in businesses failing fire and rescue requirements from 33.7% in 2017 to 23.6% in 2024, health ministry requirements from 20.4% to 15.1%, and environmental protection requirements from 6.5% in 2021 to 6.3% in 2024.
Processing times for regular business licenses also fell in every local authority examined. In Netanya, the average time dropped from about 813 days in 2017 to 187 days in 2024. In Kiryat Bialik, it fell from 744 days to 93 days, and in Rahat from 134 days to 55 days.
Still, the report points to major gaps in implementation. Forty-two of 259 local authorities, about 16.2%, failed to submit required 2024 business-status data to the Interior Ministry. Englman warned that missing data leaves the ministry without a full picture of business licensing nationwide and could lead to wrong conclusions and mistaken policy decisions. He also said 246 of 259 authorities, 95%, were not connected as of November 2025 to the national business licensing system developed by the National Digital Agency, and 16 authorities still lacked a business licensing management information system as of September 2025. Englman said all parties must work together to remove barriers and fully implement the reform.
