Government Incentives

The Government of Israel offers a wide range of programs to encourage business activity and promote foreign and local investments in Israel, such as:

1. Grants and tax benefits according to the Law of Encouragement of Capital Investments - 1959 for “approved” and “benefited” enterprises.
   The law allows industrial enterprises to receive grants and/or to be entitled to certain tax benefits (tax exemption or reduced corporate tax rate for determined periods of time, reduced tax rate on dividends, accelerated depreciation). There are criteria to be met by an industrial enterprise for entitlement to benefits, such as field of operations, export scope, location of the enterprise etc.
2. Grants on research and development programs according to the Law of Encouragement of Research and Development in the Industry – 1984.
   State participation at rates of 30-66% may be authorized for research and development and product improvement programs approved by the Chief Scientist. The grants are to be repaid in the form of royalties paid out from income from sales of products developed.
3. Tax benefits (depreciation of certain intangible assets, taxation on consolidated basis) for industrial enterprises according to the Law of Encouragement of the Industry (taxes) – 1969.
4. Support for marketing to overseas markets by the Ministry of Industry, Trade and Employment – loans and supporting programs are available for companies that intend to invest in marketing promotion of their products overseas.
5. The wide range of additional tax benefits, programs and other forms of support is available for enterprises operating in different business fields (flat rent, small enterprise support programs, support for employment in preferred.