THE HI-TECH INDUSTRY IN ISRAEL

INVESTMENTS AND MANUFACTURING INCENTIVES

Reduced corporate tax rate - priority enterprise (special priority enterprise)

16% (8%)

7.5% (5%)

Reduced dividend tax rate (special priority enterprise)

20% (15%)

Investment grant

Up to 30%

Innovation box for IP based companies (consolidated revenues of over NIS 10b)

12% (6%)

7.5% (6%)

* The regular Israeli tax rates are 24% for business and 25% for dividend.

EMPLOYMENT INCENTIVES

"High Salary" sub-track

10% - 35% of the wage cost for 48 months, with a maximum monthly wage of $7,500.

Special populations Ultra-Orthodox, ethnic minorities, individuals with disabilities, single parents

10%-37.5% of the wage cost, with a maximum monthly wage of ~ $4,000.

10%-37.5% of the wage cost, with a maximum monthly wage of ~ $6,000.

Minorities in knowledge based industries

30% - 40% of the wage cost for
24 months with a maximum monthly wage of ~$3,000.

R&D INCENTIVES

	GLOBAL ENTERPRISE COLLABORATION PROGRAM	BILATERAL & MULTILATERAL INDUSTRIAL R&D
Target	Encourage the creation of MNC-Startup partnerships in Israel.	Encourages international collaborative R&D between Israeli and foreign companies.
Incentives	The Israel Innovation Authority will support the Israeli startup company with a conditional grant ranging between 20%-50% of the approved development budget	Public funding is usually 50% of the approved project.
Qualifications	Criteria for MNC: Annual revenues over $2 billion; Significant investment in R&D; Global presence.	According to fund criteria.
Other	The MNC can invest in cash and/or in kind, i.e. technological guidance, using labs, discounted software licenses, regulatory advice, etc.	40 bilateral and multilateral industrial R&D support agreements, as well as participation in 5 multinational European programs.

	R&D FUND	OTHER R&D SUPPORT
Target	To promote R&D by lowering the company’s risk.	Support early stage companies as well as the development of technological infrastructure for the Israeli industry.
Incentives	Subsidizing up to 50% of the project’s cost (60% in priority areas).	Support early stage companies as well as the development of technological infrastructure for the Israeli industry.
Qualifications	Approved by a professional committee of the Israel Innovation Authority.	Technological Incubators - the licensee is elected by the Israel Innovation Authority’s relevant committee. Magnet - group of companies and academia join forces to develop new generic technology. Magneton - cooperation between academia and industry for technology transfer.
Other	If the company commercializes the technology or product and generates profit, royalty payments need to be made. Otherwise, not.	Magnet project is usually approved for a 3-year period with extensions of 1-3 years possible.