Jerusalem, 18 May, 2026 (TPS-IL) — Israel’s Ministry of the Interior announced the start of the second phase of the municipal corporation reform.
Phase I data was presented at the Municipal Corporations Conference in Eilat and indicate a100% increase in the number of corporations that received a high classification and in the extent of compliance with good governance indicators.
The reform, which was launched in April 2025, is intended to strengthen municipal corporations, which serve as the central executive arm of local authorities, through a differential regulation model based on proper administration, financial soundness, transparency, and professional management. In accordance with the model, corporations that meet the established indicators are granted delegation of powers and reduction of barriers, along with continued professional supervision according to the level of classification.
Phase II of the reform will focus on deepening transparency, governance, and control in municipal corporations. Among the steps that will be promoted: strengthening the effectiveness of the boards of directors as a factor that connects local authority policy with actual implementation, improving reporting mechanisms to the councils of authorities, streamlining financial monitoring, regulating the audit mechanisms of the gatekeepers, promoting new tender regulations, and digitizing work processes.
There are currently about 600 municipal corporations operating in Israel, including economic companies, cultural and sports associations and other bodies that serve as the executive arm of local authorities, including regional councils.