G/SCM/N/372/ISR  
 
27 August 2021  
(21-6472) Page: 1/40 
Committee on Subsidies and Countervailing Measures  Original: English  
 
SUBSIDIES  
NEW AND FULL NOTIFICATION PURSUANT TO ARTICLE XVI:1 OF THE  
GATT 1994 AND ARTICLE 25 OF THE AGREEMENT ON  
SUBSIDIES AND COUNTERVAILING MEASURES  
ISRAEL 
The following communication, dated and received on 2 7 August 2021, is being circulated at the 
request of the delegation of Israel.  
 
_______________  
 
  G/SCM/N/372/ISR  
 
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  Index  
 
INTRODUCTION  ................................ ................................ ................................ ..............  4 
RESEARCH AND DEVELOPMENT  ................................ ................................ .......................  4 
The Innovation Authority  ................................ ................................ ................................ .... 4 
1   THE INNOVATION AUTHORITY – THE START -UP DIVISION  ................................ ........  4 
Tnufa Program  ................................ ................................ ................................ ...................  4 
Incubators program  ................................ ................................ ................................ ...........  5 
Early stage program  ................................ ................................ ................................ ...........  6 
Renewable Energy ................................ ................................ ................................ ..............  8 
Innovation Labs Program  ................................ ................................ ................................ .... 9 
2   THE INNOVATION AUTHORITY – GROWTH DIVISION  ................................ ..............  10 
Research and Development Fund  ................................ ................................ .......................  10 
Generic R&D Program for Large Companies  ................................ ................................ .........  11 
Space Technology  ................................ ................................ ................................ ............  12 
Large Companies in Israel 's Developments Areas  ................................ ................................ . 13 
Support Grants for "Pilot" Programs  ................................ ................................ ...................  14 
3   THE INNOVATION AUTHORITY – TECHNOLOGICAL INFRASTRUCTURE DIVISION  .... 15 
Generic Technologies R&D Consortiums - MAGNET  ................................ ...............................  15 
Knowledge Commercialization Program – (formerly known as MAGNETON)  .............................  16 
Promoting Applied Re search in Academia  ................................ ................................ ............  17 
4   THE INNOVATION AUTHORITY – INTERNATIONAL COLLABORATION DIVISION  ...... 19 
Bilateral Programs for Mutual Support  ................................ ................................ ................  19 
R&D Collaboration with Multinational Corporations Program (MNC)  ................................ .........  20 
Bi-National Funds  ................................ ................................ ................................ .............  21 
5   THE INNOVATION AUTHORITY – ADVANCED MANUFACTURING DIVISION  ..............  22 
Manufacturing -Oriented Industry  ................................ ................................ .......................  22 
R&D Preparatory Program for Companies in the Low-Technology Industry  ...............................  23 
6   THE INNOVATION AUTHORITY – SOCIAL CHALLENGES DIVISION  ...........................  25 
Support in R&D of Assistive Technology for the Disabled  ................................ .......................  25 
Public Sector Challenges  ................................ ................................ ................................ ... 26 
7   AID TO SMALL AND MEDIUM -SIZED COMPANIES BY THE SMALL AND MEDIUM 
BUSINESSES AGENCY (SMBA)  ................................ ................................ .......................  27 
Business Development Centers - MAOF by the Small and Medium Businesses Agency (SMBA)  .... 28 
Design Based Product Programme by the SMBA  ................................ ................................ ... 29 
8   FOREIGN TRADE ADMINISTRATION  ................................ ................................ .........  30 
Smart Money Programme ................................ ................................ ................................ .. 30 
Shalav – A Gateway for International Marketing Programme  ................................ .................  31 
9   SUPPORT FOR EMPLOYMENT AND TRAINING  ................................ ...........................  31 
Training Courses for Adults  ................................ ................................ ...............................  31 
On the Job Training  ................................ ................................ ................................ ..........  32 G/SCM/N/372/ISR  
 
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  Factory Study Classroom  ................................ ................................ ................................ .. 33 
Apprentice ship Training Program - "Starter"  ................................ ................................ ........  34 
Vouchers Programme  ................................ ................................ ................................ ....... 34 
10   THE INVESTMENTS AUTHORITY AT THE MINISTRY  
OF ECONOMY AND INDUSTRY  ................................ ................................ .......................  35 
Employment Grant Program  ................................ ................................ ..............................  35 
Investme nt Incentives in the Law for the Encouragement of Capital Investment  ......................  36 
Reducing Greenhouse Gas Emissions and Improving Energy Efficiency Programme  ..................  37 
11   OTHER FORMS OF SUBSIDIES  ................................ ................................ ................  38 
Cost of Land Development  ................................ ................................ ................................  38 
Eilat Free Trade Zone  ................................ ................................ ................................ ....... 38 
Free Port Zone  ................................ ................................ ................................ .................  39 
Fisheries - Waiver of Excise Tax on Fuel  ................................ ................................ ..............  40 
 
  G/SCM/N/372/ISR  
 
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  INTRODUCTION  
Following G/SCM/N/343/ISR  covering the years 2017, 2018 and 2019, this notification relates to 
measures which are currently in force and provides, as far as possible, statistical information for the 
year 2020.  
A considerable effort has been undertaken by the Government of the Stat e of Israel to submit a 
comprehensive notification in accordance with the requirements of the Agreement on Subsidies and 
Countervailing  Measures. The notification follows, as far as possible, all the elements required by 
Article  25 of the Subsidies Agreeme nt and by the subsidies questionnaire.  
In accordance with Article 25.7 of the Subsidies Agreement, the fact that a measure has been notified, 
does not prejudge either its legal status under GATT 1994 or the Subsidies Agreement, nor does it 
prejudge its eff ects under the Agreement or the nature of the measure itself. Furthermore, this does 
not imply in any way, that any of the measures notified, wholly or partly, amounts to a specific subsidy.  
RESEARCH AND DEVELOPMENT  
The Innovation Authority  
The Innovation Authority is an  independent agency , aimed at supporting the Israeli innovation 
ecosystem by providing a variety of tools and funding platforms. The Authority (formerly known as 
"The Office of the Chief Scientist at the Ministry of Economy and Industry") wa s founded in 2015, when 
amendments to the Law for the Encouragement of Industrial Research and Development, 5744 -1984 
were made. The amendments formed the legal basis for the establishment of the new 
"Innovation  Authority".  
The Authority is divided into si x divisions, each responsible for a different target audience:  
1. Start-up Division.  
2. Growth Division.  
3. Technological Infrastructure Division.  
4. International Collaboration Division.  
5. Advanced Manufacturing Division.  
6. Societal Challenges Division.  
Legal Basis  
The legal basis for the establishment of the Authority is the Law for the Encouragement of Industrial 
Research and Development, 5744 -1984.  
1  THE INNOVATION AUTHORITY – THE START -UP DIVISION  
The Start -up Division offers unique tools to support the early devel opment stages of technological 
initiatives. These tools assist entrepreneurs and start -up companies in developing their innovative 
technological concepts at the pre -seed or initial R&D stages, transform their ideas into reality and 
reach significant fundab le milestones.  
Tnufa Program  
The Tnufa program is designed for entrepreneurs who are interested in formulating and validating 
an innovative technological concept and in reaching the R&D stage, where they can raise funding 
for further development and commer cialization  . 
1. The Authority Responsible for the Subsidy  
The Innovation Authority.  G/SCM/N/372/ISR  
 
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  2. Legal Basis  
Law for the Encouragement of Industrial Research and Development, 5744 -1984.  
3. Policy Objective and/or Purpose  
The program supports entrepreneurs reaching proof of concept and business feasibility of early stage 
projects  . 
4. Form of the subsidy  
Entrepreneurs and new start -up companies can receive a conditional grant of up to NIS  200,000 
over a period of two years: NIS  100,000 awarded each year (85% of the approved budge t). 
Bio-convergence projects can receive a conditional grant of up to NIS  400,000 over a period of 
two years: NIS  200,000 awarded each year (85% of the approved budget).  
The funds are given for building an initial prototype, protecting intellectual propert y and business 
development, including, degradable components, contracting with sub -contractors, consultants, 
patent attorneys and exhibition expenses (not intended for salaries and overhead expenses).  
5. To whom the subsidy is provided  
The support is given to  entrepreneurs and new start -up companies.  
6. Duration  
Ongoing.  
7. Budget/expenditure  
Actual Annual Disbursement (in  million NIS)  
2020 16.3 
8. Trade Effects  
The products or processes financed by the programme are innovative and cannot therefore compete 
with existing products in the market. Normally, further work is necessary for the results of an R&D 
project to lead to a commercially exploitable process or product. Therefore, the programme has no 
direct impact on trade.  
Incubators program  
This program is desi gned for entrepreneurs who are interested in establishing a start -up company 
based on an innovative technological concept. A technological incubator is a center for 
entrepreneurship intended to invest in new start -up companies and to provide them with 
administrative, technological and business support. The incubator offers a supportive framework for 
the establishment of a company as well as development of a concept into a commercial product. 
Currently there are 18 technological incubators and 1 designated b iotechnological incubator, which 
are privately owned by seasoned and experienced groups, such as venture capital funds, 
multinational corporations, private investors etc. The incubators are selected through competitive 
processes for a license period of eig ht years and are geographically spread across Israel. The list of 
incubators operating in Israel is available on the Innovation Authority website.  G/SCM/N/372/ISR  
 
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  1. The Authority Responsible for the Subsidy  
The Innovation Authority.  
2. Legal Basis  
Law for the Encouragement of Industrial Research and Development, 5744 -1984.  
3. Policy Objective and/or Purpose  
Supporting entrepreneurs with innovative technological concepts at the initial stage of R&D in 
establishing start -up companies and helping them reach a signifi cant fundable milestone.  
4. Form of the subsidy  
The conditional grant provided as part of this program is 85% of the approved budget and up to 
NIS 3 million for a period of up to two years, or up to 85% and NIS  5 million for a period of up to 
three years. Com panies operating in development areas  are eligible for additional funds.  
The conditional grant provided as part of the designated Biotechnological Incubator is 85% of the 
approved budget, up to NIS  8.1 million for a period of up to three years.  
Supplementa ry financing of 15% of the approved budget is invested by the incubator. No financial 
investment is required by the entrepreneurs.  
Comprehensive assistance is provided by the incubator, including physical space, technological 
infrastructure and business gu idance, as well as access to partners, additional investors and potential 
customers, legal advisory and administrative services.  
5. To Whom the Subsidy is Provided  
The support is provided to p rivate entrepreneurs , new start -up companies, and research institut ions 
interested in commercializing technologies based upon groundbreaking studies into start-up 
companies.  
6. Duration  
Ongoing.  
7. Budget/expenditure  
Actual Annual Disbursement (in  million NIS)  
2020 157.3  
8. Trade Effects  
The products or processes financed by the programme are innovative and cannot therefore compete 
with existing products. Normally, further work is necessary for the results of an R&D project to lead to 
a commercially exploitable process or product. Therefore, the programme has no direct impact on 
trade.  
Early stage program  
The Early Stage Program is designed for start -up companies seeking to develop and promote an 
innovative technological project, as well as penetrate the market by raising investments from the 
private sector. The program offers three sub -programs: standard program, minorities program, and G/SCM/N/372/ISR  
 
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  ultra-orthodox program. Approval by the Authority serves as a significant springboard for companies 
in raising investments from the private sector.  
In 2019, the Early Stage Program was moved fro m the Start -up division to the Growth Division. At 
the beginning of 2020, the activity of the Early Stage Program was discontinued and integrated into 
the R&D Fund program.  
1. The Authority Responsible for the Subsidy  
The Innovation Authority.  
2. Legal Basis  
Law for the Encouragement of Industrial Research and Development, 5744 -1984.  
3. Policy Objective and/or Purpose  
To provide an incentive for private investments in early stage companies in product development 
and initial market penetration.  
4. Form of the subsidy  
The conditional grant provided is 50%/30% of the approved budget, up to NIS  10 million each year. 
Companies operating in development areas  are eligible for additional 10% or 25% conditional grant.  
Minority/Ultra -Orthodox entrepreneurs can apply for  preferred incentives in the first two years as 
follows:  
• 1st Year  - The total budget is up to NIS  2.5 million and the conditional grant provided is 
75% of the approved budget.  
• 2nd Year  - The total budget is up to NIS  4.5 million and the conditional grant provided is 
70% of the approved budget.  
A company receiving the au thority's approval for its first year in the program will be given the 
opportunity to raise the supplementary funding needed for the project, up to six months after the 
date of approval.  
5. To Whom the Subsidy is Provided  
start-up companies from all industria l sectors, which raised up to USD  10 million and with revenues 
of up to USD  1 million in the previous year, that are interested in developing or upgrading innovative 
products and penetrate their target markets.  
The program offers preferential terms for com panies held by Minority/Ultra -Orthodox entrepreneurs.  
6. Duration  
Ceased activity in 2019.  
7. Budget/expenditure  
Actual Annual Disbursement (in  million NIS)  
2020 0 G/SCM/N/372/ISR  
 
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  8. Trade Effects  
The products or processes financed by the programme are innovative and cannot therefore compete 
with existing products. Normally, further work is necessary for the results of an R&D project to lead to 
a commercially exploitable process or product. Therefore, the programme has no direct impact on 
trade.  
Renewable Energy  
The Renewable Energy Technology Center supports technological ventures and R&D projects starting 
from the stages of applied academic research and early stage entrepreneurship. The center enables 
testing and trials for products undergoing development and de monstration. The Center is operated 
by the private sector, composed of strategic investors and an academic institute. The Center's 
activities are carried out in development areas  in the southern part of the country (Eilat region).  
1. The Authority Responsible for the Subsidy  
The Innovation Authority.  
2. Legal Basis  
Law for the Encouragement of Industrial Research and Development, 5744 -1984.  
3. Policy Objective and/or Purpose  
To assist companies and entrepreneurs that are developing, or interested in devel oping, a product 
integrating an innovative technology that has economic potential in the fields of renewable energy 
and energy efficiency. In addition, the program is designed for teams that can carry out the proposed 
R&D by themselves, on the technologica l and the managerial levels. This support is conditional upon 
the fact that the project could contribute to the development of the Eilat region.  
4. Form of the subsidy  
The participants of all the sub -programs receive professional and technical support from th e Center's 
staff for the completion of the project. The financial support depends on the sub -program in which 
the operation is carried out:  
• Primary sub -program:  Financial support of 66% of the approved R&D expenditures for an 
activity period of up to two y ears. In exceptional cases a one -year extension of the period 
will be approved without changes in the scope of the financial support.  
• Advanced sub -program:  Financial support of 60% or 85% of the approved R&D expenditures 
by the Authority, and supplementary  financing of up to 100% of the approved R&D 
expenditures by the Center's licensee for activity period of up to two years.  
Financial support of 60% of R&D expenditures is available for young companies at the 
beginning of their activities, even if they have  been supported in the past by other programs 
of the Authority or as part of any other program.  
Financial support of 85% of R&D expenditures is available for projects that have not 
previously received government support as part of one of the Authority's pr ograms, except 
for the Primary sub -program of the Renewable Energy Technology Center.  G/SCM/N/372/ISR  
 
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  The approved budget for a project is up to NIS  2,500,000. In exceptional cases, a one -year 
extension of the activity period will be approved without changes in the scope of the financial 
support.  
The entrepreneur or company receiving the benefits as part of this program will repay the 
received funding to the Authority by the payment of royalties from sales, if the project 
succeeds in reaching the commercialization stage an d the company generates revenues.  
• Testing areas sub -program : Financial support of 50% of the approved R&D expenditures for 
activity period of up to two years.  
5. To Whom the Subsidy is Provided  
Companies and entrepreneurs who wish to carry out projects that require technological R&D in the 
renewable energy and energy efficiency fields.  
The Renewable Energy Technology Center supports projects in relevant technological fields, such as 
solar energy, wind energy, geothermal energy, alternative fuels , energy efficiency, smart grid, 
energy storage and more.  
The program is available for early stage companies and entrepreneurs interested in developing 
technological projects in the renewable energy field, for researchers wishing to carry out applied 
resea rch in these areas, and for companies that want to conduct experiments in the testing areas 
operated by the Center.  
The assistance is carried out via three sub -programs:  
1.   Primary sub -program:  Funding and support of applied R&D activities, via cooperation 
between academia and industry.  
2.   Advanced sub -program: Funding and support of technological projects of young 
companies in the pre -seed and seed stages.  
3.   Testing areas sub -program: Funding and support of demonstrations and experiments  
6. Duration  
Ceased activity in 2020.  
7. Budget/expenditure  
Actual Annual Disbursement (in  million NIS)  
2020 6.4 
8. Trade Effects  
The products or processes financed by the programme are innovative and cannot therefore compete 
with existing products. Normally, further work is necessary for the results of an R&D project to lead to 
a commercially exploitable process or product. Therefore, the programme has no direct impact on 
trade.  
Innovation Labs Program  
The Program is aimed at assisting entrepreneurs and start -ups with a techn ological idea, interested 
in reaching a POC with the assistance and guidance of market leading companies that are 
establishing an innovation lab facility in Israel. The program is designed for encouraging the 
engagement of companies interested in gaining e xposure to the Israeli innovation eco -system.  G/SCM/N/372/ISR  
 
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  1. The Authority Responsible for the Subsidy  
The Innovation Authority.  
2. Legal Basis  
Law for the Encouragement of Industrial Research and Development, 5744 -1984.  
3. Policy Objective and/or Purpose  
Assisting entrepreneurs in the preliminary stages of a product, which requires unique infrastructure 
and expertise to prove the feasibility of a technological idea. The assistance is provided through 
innovation labs operated by the industry's leading corporations – both Israeli and Foreign via a model 
of open innovation.  
4. Form of the subsidy  
Corporations that are establishing an innovation lab will provide entrepreneurs and start -ups with 
guidance to market, connections to their experts and a lab facility. The Innovat ion Authority will 
fund 33 -50% of the lab technological facility's costs and up to NIS  4 or 6  million and 50% of the 
lab's operational costs and up to NIS  0.5 or 1  million of the total budget, annually.  
The Authority will fund 85% of the start -ups budget i n reaching a POC.  
5. To Whom the Subsidy is Provided  
Entrepreneurs and start -ups in their early stages in which the innovation lab is interested to invest.  
6. Duration  
Ongoing.  
7. Budget/expenditure  
Actual Annual Disbursement (in  million NIS)  
2020 21.2 
8. Trade Effects  
The products or processes financed by the programme are innovative and cannot therefore compete 
with existing products. Normally, further work is necessary for the results of an R&D project to lead to 
a commercially exploitable process or product. Therefore, the programme has no direct impact on 
trade.  
2  THE INNOVATION AUTHORITY – GROWTH DIVISION  
The Growth Division operates a wide range of programs that promote technological innovation of 
mature and growth companies. This division contributes to the promotion and preservation of 
competitiveness and technological leadership of companies, as well as the increase of their growth 
rates and potential.  
Research and Development Fund  
This is the main program designed for industrial R&D support for the develop ment of competitive 
products and innovative processes. The R&D Fund, which offers the greatest financial incentives for 
R&D activities by the Israeli government, provides commercial companies in all areas with support G/SCM/N/372/ISR  
 
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  for the development processes of new p roducts or for the upgrade of existing technology. The 
support is offered to all businesses in Israel and all their branches, at all stages of R&D.  
In April 2020 the R&D Fund launched the "Fast Track Financing Program " in order to support R&D 
oriented comp anies that suffered from the economic crisis caused by the Covid -19 pandemic. The 
program reduces the application process time from 3 months to 4 weeks and provides companies 
with 50% of the approved finance in advance . 
1. The Authority Responsible for the Su bsidy 
The Innovation Authority.  
2. Legal Basis  
Law for the Encouragement of Industrial Research and Development, 5744 -1984.  
3. Policy Objective and/or Purpose  
The R&D Fund encourages technological innovation in order to strengthen and promote the Israeli 
economy.  
4. Form of the subsidy  
A conditional grant of 20% to 50% of the approved R&D expenditures.  
Companies operating in development areas are eligible for additional support of 10 -25%.  
Start-up companies owned by women or by entrepreneurs from minority gro ups are eligible for 
support of 70 -75% for a limited time (up to two years).  
5. To Whom the Subsidy is Provided  
The support is offered to all businesses in Israel and all their branches, at all stages of R&D.  
6. Duration  
Ongoing.  
7. Budget/expenditure  
Actual Annual  Disbursement (in  million NIS)  
2020 1,168.9  
8. Trade Effects  
The products or processes financed by the programme are innovative and cannot therefore compete 
with existing products. Normally, further work is necessary for the results of an R&D project to lead to 
a commercially exploitable process or product. Therefore, the programme has no direct impact on 
trade.  
Generic R&D Program for Large Companies  
This program allows large companies to focus on long -term creation of new knowledge and 
technological inf rastructure, used for the development or production of future innovative products.  G/SCM/N/372/ISR  
 
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  1. The Authority Responsible for the Subsidy  
The Innovation Authority.  
2. Legal Basis  
Law for the Encouragement of Industrial Research and Development, 5744 -1984.  
3. Policy objective and/or purpose  
To encourage and support long -term R&D of large companies, which invest in the development of 
infrastructural knowledge that can be implemented in a series of products over a long -time frame. 
R&D projects submitted to this program should include a long -term R&D plan or collaboration with 
another company.  
4. Form of the subsidy  
A grant of 20% -50% of the approved R&D expenditures for long -term R&D plans or for an 
R&D project executed in cooperation with another company.  
5. To Whom t he Subsidy is Provided  
Large companies that employ at least 200 employees in R&D or with a R&D budget in Israel of at 
least USD  20 million. In addition, the company's average yearly sales (including subsidiaries) must 
exceed USD  70 million for 3 years; or its parent company's total revenue (with a direct or indirect 
holding of at least 80%) exceeds USD  2.5 billion.  
6. Duration  
Ongoing.  
7. Budget/expenditure  
Actual Annual Disbursement (in  million NIS)  
2020 50.7 
8. Trade Effects  
The products or processes financed by the programme are innovative and cannot therefore compete 
with existing products. Normally, further work is necessary for the results of an R&D project to lead to 
a commercially exploitable process or product. Therefore, the programme has no di rect impact on 
trade.  
Space Technology  
This program is a joint initiative of the Innovation Authority and the Israel Space Agency of the 
Ministry of Science, Technology and Space.  
1. The Authority Responsible for the Subsidy  
The Innovation Authority.  
2. Legal Ba sis: 
Law for the Encouragement of Industrial Research and Development, 5744 -1984.  G/SCM/N/372/ISR  
 
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  3. Policy objective and/or purpose  
To encourage R&D in the fields of space technology, while strengthening knowledge and 
technological development capacity of the Israeli industry, to reduce the knowledge gap between 
Israel and the global market and to improve the competitiveness of the Israeli industry, amid the 
existing challenges, such as significant technological risk, high development costs, limited production 
quantiti es and expensive systems.  
4. Form of the subsidy  
Conditional grant of up to 85% of the approved R&D expenditures for a period of 36 months.  
5. To whom the subsidy is provided  
Companies that develop products in the field of space technology intended for installat ion in satellites 
or ground stations for management of satellite operations.  
Companies that develop products in the field of space technology intended for reception or 
transmission of data from satellites.  
Companies that develop equipment for calibration a nd testing of products in the field of space 
technology intended for installation on -board satellites, or related to the operation of the satellites, 
including installation of different versions of the satellites.  
6. Duration  
Ongoing.  
7. Budget/expenditure  
Actua l Annual Disbursement (in  million NIS)  
2020 15.0 
8. Trade Effects  
The products or processes financed by the programme are innovative and cannot therefore compete 
with existing products. Normally, further work is necessary for the results of an R&D project to lead to 
a commercially exploitable process or product. Therefore, the programme has no direct impact on 
trade.  
Large Companies in Israel 's Developments Areas  
This program is part of the R&D Fund. The R&D centers located in  outlying areas and development 
zones  have an immense influence on the formation of independent economic activity.  
1. The Authority Responsible for the Subsidy  
The Innovation Authority.  
2. Legal Bas is 
Law for the Encouragement of Industrial Research and Development, 5744 -1984.  G/SCM/N/372/ISR  
 
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  3. Policy objective and/or purpose  
To encourage large companies to establish R&D centers  in Israel's development areas, while 
constantly striving to reduce the gap between these outlying areas and the country's center.  
4. Form of the subsidy  
A perennial approval of a conditional grant of 50% -70% of the approved R&D expenditures for an 
active R&D  center in development areas, for a period of two to three years.  
5. To whom the subsidy is provided  
Large companies with a total sales turnover from their activities in Israel of more than USD  70 million 
(in the year prior to submitting the application) that  wish to set up a R&D center in Israel's 
development areas.  
The program is suitable for companies stating that over 50% of the total products that will be 
produced as part of the program are produced in Israel. Furthermore, the company's R&D center 
has to employ employees living in development areas, at a rate of not less than 40% of all employees 
in the first year of operations, 50% in the second year, and 60% in the third year.  
6. Duration  
Ongoing.  
7. Budget/expenditure  
Actual Annual Disbursement (in  million NI S) 
2020 6.3 
8. Trade Effects  
The products or processes financed by the programme are innovative and cannot therefore compete 
with existing products. Normally, further work is necessary for the results of an R&D project to lead to 
a commercially exploitable process or product. Therefore, the programme has no direct impact on 
trade.  
Support Grants for "Pilot" Programs  
Collaboration with government entities (17 entities as of 2020) that enables companies to implement 
innovative technologies in pilot  sites in order to grow to an industrial scale.  
1. The Authority Responsible for the Subsidy  
The Innovation Authority.  
2. Legal Basis  
Law for the Encouragement of Industrial Research and Development, 5744 -1984.  
3. Policy Objective and/or Purpose  
Promoting technolog y companies from the development phase to a successful market launch.  G/SCM/N/372/ISR  
 
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  4. Form of the subsidy  
20-50% of the project's pilot costs. Companies operating in development areas are eligible for 
additional support of 10%.  Additional support is possible when the potential impact of the technology 
in the specific sector (i.e. transport, healthcare, environment etc.) is expected to be exceptional.  
5. To Whom the Subsidy is Provided  
Technology companies (Start -ups and large compa nies).  
6. Duration  
Ongoing.  
7. Budget/expenditure  
Actual Annual Disbursement (in  million NIS)  
2020 71.4 
8. Trade Effects  
The products or processes financed by the programme are innovative and not commercialized yet. 
Therefore, the programme has no direct impact on trade.  
3  THE INNOVATION AUTHORITY – TECHNOLOGICAL INFRASTRUCTURE DIVISION  
The Technological Infrastructure Division focuses on collaboration between industry and academia 
to produce advanced technologies and innovative products. The programs offere d by this division 
promote cooperation, exchange of knowledge and experience, and development of generic ground -
breaking knowledge by an integrated group of researchers from academia and industry.  
Generic Technologies R&D Consortiums - MAGNET  
The MAGNET pr ogram (Generic Pre -Competitive Technological R&D) focuses on consortiums of 
industrial companies and research institutions that collaborate to develop innovative technologies. 
The consortiums enable long -term R&D and create a supportive work environment. C ollaboration 
with industry also strengthens the commercialization capabilities of research institutions and assists 
them in understanding market needs.  
1. The Authority Responsible for the Subsidy  
The Innovation Authority.  
2. Legal Basis  
Law for the Encouragement of Industrial Research and Development, 5744 -1984.  
3. Policy objective and/or purpose  
To assist in the development of generic technologies in important areas, in whom the Israeli industry 
has a competitive advantage. Since the program specialize s in the development of fundamental 
technology, it allows knowledge sharing and cooperation between companies operating in the same 
field, which may be difficult to achieve otherwise.  G/SCM/N/372/ISR  
 
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  4. Form of the subsidy  
The amount of the grant provided through the consort ium is up to 66% of the approved budget for 
an industrial company and 100% of the approved budget for a research institution (80% as a grant 
and 20% from the industrial companies in the consortium).  
The operating period is three years.  
5. To whom the subsidy is provided  
Manufacturing companies developing competitive products and interested in developing innovative 
technologies, which can be used as a basis to develop a new and advanced generation of products.  
Academic research groups engaged in scienti fic or technological research, seeking to promote 
applied research as part of a consortium, as well as to collaborate with the industry and study the 
market needs.  
Foreign company as an observer or as full partner with no funding . 
6. Duration  
Ongoing.  
7. Budget/ expenditure  
Actual Annual Disbursement (in  million NIS)  
2020 176.6  
8. Trade Effects  
Further work is necessary for the results of an R&D project to lead to a commercially exploitable 
process or product. Therefore, the programme has no direct impact on trade.  
Knowledge Commercialization Program  – (formerly known as MAGNETON)  
This program encourages the transfer of technological knowledge accumulated in the academia for 
the use of the industry, by creating collaborations between companies and academic research 
groups. These collaborations expose industrial companies to the rese arch achievements relevant to 
their activities and assist research groups in transforming academic research into commercial 
application. In addition, the Program enables the continuance of  generic Technologies R&D 
Consortium projects (see above) for up to additional 2 years.  
1. The Authority Responsible for the Subsidy  
The Innovation Authority.  
2. Legal Basis  
Law for the Encouragement of Industrial Research and Development, 5744 -1984.  
3. Policy objective and/or purpose  
Validation of laboratory results and transfer of technology from research institutions to industrial 
corporations for the development of breakthrough products.  G/SCM/N/372/ISR  
 
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  4. Form of the subsidy  
An applied research grant of up to 66% of the approved budget, up to 24 months.  
5. To whom the subsidy is provided  
Industrial companies seeking to incorporate new technologies developed in the academia and 
striving to develop a new product or to improve an existing product based on recent studies, relevant 
to their field of activity.  
Academic research groups from resear ch institutes worldwide approved by the Technological 
Infrastructure Division, seeking to carry out innovative and original applied research in collaboration 
with companies interested in the relevant technology. The research should be focused on 
technologi cal feasibility for the industry, and the applying research institute should be the sole owner 
of knowledge in the project.  
6. Duration  
Ongoing.  
7. Budget/expenditure  
Actual Annual Disbursement (in  million NIS)  
2020 37.4 
8. Trade Effects  
The products or processes financed by the programme are innovative and cannot therefore compete 
with existing products. Further work is necessary for the results of an R&D project to lead to a 
commercially exploitable process or product. Therefore, the programme has no di rect impact on trade.  
Promoting Applied Research in Academia  
The Applied Research in Academia (previously called NOFAR) program provides support for applied 
research in academia, thus potentially increasing its economic contribution to the economy. This 
program focuses on technologically feasible ideas, which are not mature enough for the support of 
the Knowledge Commercialization program, and require financing in the initial applied research stage 
at universities in order to match them with relevant indust rial companies from that sector.  
The KAMIN program, which was active until 2019, served as a bridge between basic and applied 
research, and was focused on the stage of transformation and realization of basic research into 
technologies with commercial appli cation. During 2019 t he KAMIN program  was merged into the  
Applied Research  in Academia program  as they are both approaching the same target audience and 
the same TRL (Technology Readiness Level).  
1. The Authority Responsible for the Subsidy  
The Innovation Authority.  
2. Legal Basis  
Law for the Encouragement of Industrial Research and Development, 5744 -1984.  G/SCM/N/372/ISR  
 
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  3. Policy objective and/or purpose  
To bridge the gap between academic knowledge and industry needs. All the research activities 
carried out as part of this program are in academic institutions. Some of the researches are being 
accompanied by the support of an industrial company that sees business potential in the project, 
and some are not. The main goal is to reach significant milestones by the end of  the project, which 
will enable the industrial company to sign a technology commercialization agreement with the 
research institution. Some of the research activities in the program will receive professional support 
by an industrial company or a relevant b usiness entity (such as a venture capital fund).  
4. Form of the subsidy  
The research institution supported by the program is entitled to a grant of up to 90% of the approved 
budget and no more than NIS  550,000 (in case there is an additional support of an ind ustrial 
company), or up to 85% and no more than NIS  440,000 (in case there is no additional support of 
an industrial company), for a period of 12 months - with an option to extend the support period in 
up to 24 months (and in some cases – up to 36 months).  
The supporting industrial company (if relevant) serves as a partner in professional guidance and in 
setting of research goals, as well as participates in the funding of 10% of the project cost.  
At the end of the research, the supporting company receives th e first right to negotiate a 
commercialization agreement with the research institution.  
Research conducted in collaboration with two or three different research institutions is eligible for 
funding of up to NIS  810,000 (in case there is an additional suppo rt of an industrial company) or up 
to NIS  770,000 (in case there isn't).  
5. To whom the subsidy is provided  
Academic research groups in Israel, operating as part of a higher education or research institution, 
seeking to carry out applied research, which is no t mature enough to be supported by the industry 
or by the Knowledge Commercialization  program as explained broadly above. The research should 
include a new and original idea that requires proof of concept, with preliminary basic research and 
results that are applicable to Israeli industry.  
6. Duration  
Ongoing.  
7. Budget/expenditure  
Actual Annual Disbursement (in  million NIS)  
2020 71.2 
8. Trade Effects  
The products or processes financed by the programme are innovative and cannot therefore compete 
with existing products. Further work is necessary for the results of an R&D project to lead to a 
commercially exploitable process or product. Therefore, the programme has no direct impact on trade.  G/SCM/N/372/ISR  
 
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  4  THE INNOVATION AUTHORITY – INTERNATIONAL COLLABORATION DIVISION  
The International Collaboration Division is responsible for creating bridges to new internat ional 
markets, building platforms for cooperation in innovative R&D, and attracting strategic foreign 
stakeholders to Israel.  
The International Collaboration Division has three geographical desks: North America and Europe, 
Asia-Pacific, Emerging Markets, along with a Planning Unit. In addition, ISERD, the Israeli -European 
R&D Directorate, operates as the general Contact Point for the European R&D Framework Program 
in which Israel participates as an associated country (the current program being Hor izon2020).  
Support for international cooperation projects is made possible through an array of bilateral 
cooperation agreements, bi -national funds, various agreements with strategic partners and 
institutions such as MNCs (Multi -National Corporations) or wo rld-class hospitals; as well as through 
the EU Framework Programme for Research and Innovation.  
Together with its counterpart organizations abroad, the division coordinates call for proposals for 
funding and assists in matching partners in Israel and abroa d for joint R&D projects and other 
business ties.  
Bilateral Programs for Mutual Support  
The bilateral programs for parallel support of industrial R&D constitute a platform for promotion of 
technological innovation among industrial and research entities. The Authority operates these 
programs in collaboration with R&D and innovation funding bodies in leading countries, provinces 
and cities in Asia, North and South America, Europe, and Australia.  
1. The Authority Responsible for the Subsidy  
The Innova tion Authority.  
2. Legal Basis  
Law for the Encouragement of Industrial Research and Development, 5744 -1984.  
3. Policy objective and/or purpose  
Initiation of bilateral or multilateral R&D joint projects, conducted simultaneously in Israel by local 
affiliates and abroad by designated partners.  
4. Form of the subsidy  
Assistance in finding a foreign partner.  
Conditional grant of up to 50% of the approved budget of an R&D project (or up to 75% for 
companies owned by women or by entrepreneurs from minority groups ), or in accordance with the 
financial incentive program relevant for a joint project.  Companies located in development areas are 
eligible for additional grant of up to 25% of the approved budget.  
Depending on the nature of the R&D collaboration agreement between t he two countries, the 
collaboration's approval can be provided without financial assistance (self -financing of the applicant 
company).  G/SCM/N/372/ISR  
 
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  5. To whom the subsidy is provided  
Technological industrial companies from all industry sectors that wish to develop or upgr ade the 
development of products, services or manufacturing processes with an international partner.  
Technology companies and start -ups seeking to create strategic alliances and partnerships with 
companies and organizations abroad, to expand their operations, to undertake Beta site and trial 
(pilot) projects, to gain access to innovative R&D infrastructure abroad (labs, simulators, etc.), locate 
additional sources of financing, break into new markets and benefit from the access to knowledge 
and tech nology existing overseas.  
6. Duration  
Ongoing.  
7. Budget/expenditure  
Actual Annual Disbursement (in  million NIS)  
2020 43.8 
8. Trade Effects  
The R&D financed by the program, by definition, involves more than one country, and an increase in 
trade is likely, contingent on the success of the program.  
R&D Collaboration with Multinational Corporations Program (MNC)  
The program aims to connect foreign multinational corporations (MNCs) and innovative companies.  
Israel has been frequently referred to as the "Start -up Nation" with over 600 net new start -ups 
established annually. While start -ups are in many cases the ones to make the technological 
breakthrough, they are often complemented by the involvement of large companies, in particular 
large multinational organiza tions, who serve as a strategic partner and assist in commercialization, 
manufacturing and in opening the door to global markets.  
In order to encourage the creation of MNC -Start-up partnerships in Israel, the Israel Innovation 
Authority operates a dedicate d Global Enterprise R&D Collaboration Program.  
1. The Authority Responsible for the Subsidy  
The Innovation Authority.  
2. Legal Basis  
Law for the Encouragement of Industrial Research and Development, 5744 -1984.  
3. Policy objective and/or purpose  
To enable small and medium companies to establish relationships with MNCs and take part in their 
technological and marketing activities. The program encourages networking and strategic 
cooperation between the two sides.  G/SCM/N/372/ISR  
 
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  4. Form of the subsidy  
Companies can receive a grant of 20 -50% (or up to 75% for companies owned by women or by 
entrepreneurs from minority groups ) of the development budget approved by the Research 
Committee of the Authority. Companies located in development areas are eligible for an additional 
grant of up to 25% of the approved budget.  
The company receives assistance and support from the MNC in the form of consulting, services and 
resources. The company may keep its intellectual property (IP), share the ownership of it with the 
MNC, or provide the MNC with a n on-exclusive license to use the new knowledge through an 
agreement between the project partners.  
The MNC receives services such as scouting for possible partners and IP rights in the new projects 
(see above). In addition, the MNC is informed of the due dil igence results of the partner companies.  
5. To whom the subsidy is provided  
Qualification requirements for Multinational Corporations include:  
1.   Annual revenues exceeding USD  1.5 Billion.  
2.   Significant investment in R&D.  
3.   Worldwide presence of R&D facilities and activities.  
4.   Upon qualification, the MNC will be required to sign a Memorandum of Understanding with 
the Israel Innovation Authority, which will settle the terms of cooperation between the 
MNC and the company.  
Qualification requirements for c ompanies include:  
1.   Strong R&D focus.  
2.   Annual revenues not exceeding USD  70 Million.  
3.   No affiliation to the MNC.  
6. Duration  
Ongoing.  
7. Budget/expenditure  
Included in the general budget for the Bilateral Programs (as described above).  
8. Trade Effects  
The R&D financed  by the program, by definition, involves more than one country, and an increase in 
trade is likely, contingent on the success of the program.  
Bi-National Funds  
The Israel Innovation Authority operates bi -national funds along with its counterparts in foreig n 
countries, in accordance with the agreements signed between the Israeli government and the 
governments of the respective partner countries. Each country allocates dedicated funds to finance 
joint R&D projects between Israeli and foreign companies. Curren tly, there are a number of bi -
national funds in operation.  
1. The Authority Responsible for the Subsidy  
The Innovation Authority.  G/SCM/N/372/ISR  
 
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  2. Legal Basis  
Law for the Encouragement of Industrial Research and Development, 5744 -1984.  
3. Policy objective and/or purpose  
To increase the competitiveness and relative advantage of companies in the global market, by 
encouraging cooperation between them and foreign companies, in addition to promotion and 
development of new and complementary technologies, while reducing the financi al and technological 
risk exposure.  
4. Form of the subsidy  
1. Assistance in finding a partner.  
2. Financial assistance of up to 50% of the approved budget for a R&D project.  
3. One-stop-shop for ongoing support throughout the life of a collaboration project, from proposal 
preparation and submission, until end of final technological and fiscal reviews.  
5. To whom the subsidy is provided  
Technology companies from all industrial sectors that seek to develop or upgrade innovative 
products or processes with an internationa l partner.  
Technology companies and start -ups seeking to create strategic alliances and joint ventures with 
suitable companies abroad, in order to expand their operations, find additional sources for R&D 
funding, break into new markets and benefit from the  knowledge and technology available abroad.  
6. Duration  
Ongoing.  
7. Budget/expenditure  
Data not available.  
8. Trade Effects  
The R&D financed by the program, by definition, involves more than one country, and an increase in 
trade is likely, contingent on the success  of the program.  
5  THE INNOVATION AUTHORITY – ADVANCED MANUFACTURING DIVISION  
The Advanced Manufacturing Division focuses on promoting the implementation of R&D and 
innovation processes in companies in the manufacturing sector, in order to strengthen their 
competitiveness in the global arena and improve productivity across a variety of industrial sectors. 
The programs offered by this division aims to boost manufacturing -oriented industries and 
encourage the owners of mainly small and medium -sized factories and plants to develop innovative 
products, technologies and manufacturing processes to realize these goals.  
Manufacturing -Oriented Industry  
Sectors in the manufacturing -oriented industry struggle to cope with increasing global competition. 
To prevent stagnation and regression in the low -tech sectors, the Authority offers a variety of 
incentives designed especially to meet these sectors' needs and to encourage them to be more 
innovative.  G/SCM/N/372/ISR  
 
- 23 - 
 
  1. The Authority Responsible for the Subsidy  
The Innovatio n Authority.  
2. Legal Basis  
Law for the Encouragement of Industrial Research and Development, 5744 -1984.  
3. Policy objective and/or purpose  
To encourage manufacturing -oriented enterprises to promote and implement innovative 
technological processes, such as the d evelopment of innovative products, improvement of existing 
products and production processes. In addition, this program assists factories in developing new 
strategies based on technological differentiation, in order to create competitive advantages in both  
domestic and international markets.  
4. To whom the subsidy is provided  
Manufacturing -oriented industry companies, from all four R&D intensity levels: low, Med -Low, 
Med-High, High.  
For companies from Low and Med -Low R&D intensity sectors, more than 50% of sal es must be based 
on self -production in order to qualify for the program.  
For Med -High and High intensity levels, two more conditions apply:  
1.   At least 30% of employees work in manufacturing (and no less than 3 employees).  
2.   Up to 25 R&D employees.  
Companies th at wish to determine whether their activities qualify for participation in this program 
can apply to the Authority, requesting it to carry out a preliminary examination regarding their 
affiliation to the low -tech industry.  
5. Duration  
Ongoing.  
6. Budget/expenditure  
Actual Annual Disbursement (in  million NIS)  
2020 175.9  
7. Trade Effects  
The products or processes financed by the programmes may lead to tangible commercial results, and 
increase the capabilities and competitiveness of the firms involved, effecting trade in a way similar to 
any new products or processes by a company.  
R&D Preparatory Program for Companies in the Low -Technology Industry  
Founded in 2018, a preparatory incentive program is a complementary tool operated by the Authority 
in order to assist low -tech industry companies that are not experienced in carrying out R&D activities 
and innovation processes, or companies that require fo cus and guidance with their R&D activities. 
As part of the program, the participating companies get partial funding for their counselling 
expenses, including mapping and examination of existing technological capabilities, formulation of G/SCM/N/372/ISR  
 
- 24 - 
 
  future goals, exami nation of technological gaps, and guidance for improving their capabilities 
through the implementation of technology and more advanced processes.  
1. The Authority Responsible for the Subsidy  
The Innovation Authority.  
2. Legal Basis  
Law for the Encouragement of I ndustrial Research and Development, 5744 -1984.  
3. Policy objective and/or purpose  
To create a corporate culture change in the low -tech industry sectors, including instilling values and 
working methods for continuous R&D and innovation derived from market need s. This program aims 
to increase the competitiveness of the participating companies through implementing R&D processes 
and adopting new technologies.  
4. Form of the subsidy  
1.   In Israel's development areas, the Authority will fund 75% of the consultancy fee and the 
company will fund 25% of this fee, with a max budget of NIS  100,000.  
2.   In Israel's geographic center, the Authority will fund 66% of the consultancy fee and the 
company will fund 25% of this fee, with a max budget of NIS  75,000.  
3.   The hourly consulting rat e limit is NIS  200 per hour. The company will receive funding of 
up to 200 hours.  
4.   As for the financing of the market survey, patent survey or technology survey – the 
Authority will fund 75% of the actual cost up to NIS  12,000 plus VAT.  
5. To whom the subsidy is provided  
Manufacturing -oriented industry companies, from all four R&D intensity levels: low, Med -Low, 
Med-High, High.  
For companies from Low and Med -Low R&D intensity sectors, more than 50% of sales must be based 
on self -production in order to qualify f or the program.  
For Med -High R&D intensity levels, two more conditions apply:  
1. At least 30% of employees work in manufacturing (no less than 3 employees).  
2. Up to 25 R&D employees.  
Duration  
Ongoing.  
6. Budget/expenditure  
Actual Annual Disbursement (in  million NIS)  
2020 5.7 G/SCM/N/372/ISR  
 
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  7. Trade Effects  
The products or processes financed by the programme may lead to tangible commercial results, and 
increase the capabilities and competitiveness of the firms involved, effecting trade in a way similar to 
any new products or processes by a company.  
6  THE INNOVATION AUTHORITY – SOCIAL CHALLENGES DIVISION  
The Social Challenges Division focuses on improving the effectiveness and quality of public sector 
services, as well as on enhancing social welfare  and quality of life through technological innovation. 
The goals of this division are to harness the hi -tech industry to find solutions for a variety of 
substantial problems in society and the public sector in Israel , to raise awareness of the special 
needs of the disabled population in areas such as health, security and food, and to mediate between 
them and the Israeli entrepreneurial community by encouraging and creating demand for 
technological solutions.  
Support in R&D of Assistive Technology for the Disabled  
This unique program encourages R&D of assistive technologies for the disabled and contributes to 
their quality of life while facilitating their integration into society, the community and the labour 
market. These developments benefit the disabled and enable significant financial saving on both 
social and national levels.  
1. The Authority Responsible for the Subsidy  
The Innovation Authority.  
2. Legal Basis  
Law for the Encouragement of Industrial Research and Development, 5744 -1984.  
3. Policy objective and/or  purpose  
Encouragement of R&D in industrial products that provide technological solutions for the disabled to 
enable them to integrate into society and the labour market. This program is the result of 
collaboration between the Innovation Authority and the National Insurance Fund.  
4. Form of the subsidy  
Companies and non -profit organizations can receive support of 75% of the approved budget for R&D 
for budget requests of up to NIS  500,000, and up to 60% for budget requests of NIS  500,000 to 
NIS 1,500,000. Compa nies and non-profit organizations  located in development areas are eligible 
for an additional grant of up to 10% of the approved budget. Companies owned by women or by 
entrepreneurs from minority groups  are eligible for support of 70 -75% for limited time ( up to two 
years).  
5. To whom the subsidy is provided  
Companies and non -profit organizations interested in developing technologies that serve groups with 
physical, mental or cognitive disabilities, who collectively represent up to 5% of the population.  
6. Duratio n 
Ongoing.  G/SCM/N/372/ISR  
 
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  7. Budget/expenditure  
Actual Annual Disbursement (in  million NIS)  
2020 11.0 
8. Trade Effects  
The products or processes financed by the programme are innovative and cannot therefore compete 
with existing products. Further work is necessary for the results of an R&D project to lead to a 
commercially exploitable process or product. Therefore, the programme has no direct impact on trade.  
Public Sector Challenges  
This program was launched by the Authority as part of the "Digital Israel " project of the Ministry for 
Social Equality. The program serves as an additional tool of the government to encourage innovation 
through preliminary purchase of innovative technologi cal solutions. The program offers two channels 
of support:  
1.   Preliminary R&D program intended for conducting technological and/or business 
feasibility assessment for the development of a product/service/process or a material 
improvement of an existing produc t/service/process.  
2.   Innovation in the Public Sector R&D program intended for R&D of a product/service/ 
process or a material improvement of an existing product/service/process.  
1. The Authority Responsible for the Subsidy:  
The Innovation Authority.  
2. Legal Basis  
Law for the Encouragement of Industrial Research and Development, 5744 -1984.  
3. Policy objective and/or purpose  
To provide encouragement and assistance for entrepreneurs seeking to meet the public sector's 
challenges and needs with innovative technological s olutions. The results of the program will enable:  
1.   Improved public -government service for the citizens.  
2.   Streamlining and enhancement of public sector and public services sector.  
3.   Improved public accessibility of information.  
4.   Protection of public sector data systems.  
4. Form of the subsidy  
Companies and non -profit organizations can receive support of 75% of the approved R&D budget 
for budget requests of up to NIS  500,000, and up to 60% for budget requests of NIS  500,000 to 
NIS 1,500,000. Companies and non-profit organizations  located in deve lopment areas are eligible 
for an additional grant of up to 10% of the approved budget. Companies owned by women or by 
entrepreneurs from minority groups  are eligible for support of 70 -75% for limited time (up to two 
years).  G/SCM/N/372/ISR  
 
- 27 - 
 
  5. To whom the subsidy is provided  
Industrial corporations and non -profit organizations seeking to develop, manufacture, and 
commercialize products, services, and processes that will support the goals of this program and will 
provide a technological innovative response to the needs priorit ized by the Digital Israel Fund.  
6. Duration  
Ongoing.  
7. Budget/expenditure  
Actual Annual Disbursement (in  million NIS)  
2020 7.9 
8. Trade Effects  
The products or processes financed by the programme are innovative and cannot therefore compete 
with existing products. Further work is necessary for the results of an R&D project to lead to a 
commercially exploitable process or product. Therefore, the programme has no direct impact on trade.  
7  AID TO SMALL AND MEDIUM -SIZED COMPANIES BY THE SMALL AND MEDIUM 
BUSINESS ES AGENCY (SMBA)  
1. The Authority Responsible for the Subsidy  
Small and Medium Businesses Agency (SMBA).  
2. Legal Basis  
Government decision.  
3. Policy objective and/or purpose  
To provide assistance to owners and entrepreneurs of small businesses in establishing, ma naging 
and expanding their businesses.  
4. Form of the subsidy  
• SME State loan guarantee : The subsidy is provided by means of a state deposit at the bank, 
offering the best terms of loans and parallel guarantees to small and medium businesses. A 
small business that has an annual turnover of up to NIS  6.25 million can receive a loan of 
up to N IS 500 thousand . A medium business that has an annual turnover of over 
NIS 6.25 million can receive a loan of up to 8% of the business's annual turnover. The  loan 
is given for a period of up to five years with half a year grace.  
• SME State loan guarantee – COVID -19 (started April 2020): A special business loan fund 
was created to assist businesses with cash flow difficulties caused by the implications of 
COVID -19 pandemic. The subsidy is provided by means of a state deposit at the bank, 
offering the best ter ms for loans. A business with an annual turnover of up to NIS  400 million 
can receive a loan of 40% of its annual turnover and up to NIS  20 million. Loans are given 
for a period of up to ten years with a one -year grace.  
5. To whom the subsidy is provided  
SME State loan guarantee is provided to small and medium enterprises with an annual turnover of 
up to NIS  100 million. SME State loan guarantee – COVID -19 is provided to enterprises with an 
annual turnover of up to NIS  400 million.  G/SCM/N/372/ISR  
 
- 28 - 
 
  6. Budget/Expenditure  
In 2020, the operational expenditure of the program was amounted to approximately USD  3 million, 
similar to previous years.  
In ordinary years, the fund has an "insurance" element and it compensates the banks  in 
approximately USD  17 million annually for the costs of failure to repay loans by SMEs.  
In 2020, state loan guarantees were provided to loans in total amount of NIS  22.5 billion. The costs 
of failure to repay loans by SMEs in 2020 are not known yet.  
7. Duration  
Ongoing.  
8. Trade Effects  
Since the program has  provided urgent support for companies experiencing substantial difficulties 
as a result of the COVID -19 pandemic, it is not possible to determine yet what, if any, trade effects  
may result from this program.  
Business Development Centers - MAOF by the Small  and Medium Businesses Agency 
(SMBA)  
1. The Authority Responsible for the Subsidy  
Small and Medium Businesses Agency (SMBA).  
2. Legal Basis  
Government decision.  
3. Policy objective and/or purpose  
To provide assistance to owners and entrepreneurs of small businesses in establishing, managing 
and expanding their businesses.  
4. Form of the subsidy  
The  Small and Medium Businesses Agency has established 4 SBDCs (Small Business Development 
Centers) called "Maof centers". The SMBA is financing, monitoring and superv ising these centers. 
These centers are meant to serve as a central address for small and medium enterprises (SMEs) 
owners and for entrepreneurs that are planning new businesses. The main activity of Maof centers, 
designed as "one -stop shop" for entrepreneu rs training, is business training such as workshops, 
courses, and consultancy for SMEs and for potential entrepreneurs. It also operates a few small 
projects such as business accelerators, assisting SMEs to set up their digital commerce platforms or 
to get  business credit from banks and funds. In addition, the Maof centers provide training for local 
government entities on how to be more "SMEs friendly" in their services and local policy.  
5. To whom the subsidy is provided  
Entrepreneurs and micro, small and med ium enterprises, with emphasis to encourage business 
entrepreneurship among special or disadvantaged populations, such as ultra -Orthodox, minorities, 
new immigrants, unemployed and the population in disadvantaged geographic areas.  G/SCM/N/372/ISR  
 
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  6. Budget/Expenditure  
Actual  Annual Expenditure  (in thousands USD)  
2020 50,000  
7. Duration  
Ongoing.  
8. Trade Effects  
In light of the scope and nature of the assistance provided, it is not possible to determine what, if 
any, trade effects  may result from this program.  
Design Based Product Programme by the SMBA  
1. The Authority Responsible for the Subsidy  
Small and Medium Businesses Agency (SMBA).  
2. Legal Basis  
Government decision . 
3. Policy objective and/or purpose  
The purpose of the programme is to increase awareness of the importance of industrial design, and by 
that to increase the competitiveness of such companies' products.  
4. Form of the subsidy  
Grants amounting up to 60% of the expenses on designing and planning, and up to USD  57,000.  
5. To whom the subsidy is provided  
The subsidy is provided to manufacturers employing up to 100 employees in factories, and desire to 
develop innovative design of their products.  
6. Budget/Expenditure  
Actual Annual Disbursement (in thousands USD)  
2020 0* 
* The program was not active in 2020 due to lack of budget.  
7. Duration  
Ongoing.  
8. Trade Effects  
In light of the scope and nature of the assistance provided, it is not possible to determine what, if 
any, trade effects  may result from this programme.  G/SCM/N/372/ISR  
 
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  8  FOREIGN TRADE ADMINISTRATION  
The Foreign Trade Administration (FTA) at the Israeli Ministry of Economy and Industry, initiates, 
manages and promotes Israel's trade activities and trade policy.  
Smart Money Programme  
1. The Auth ority Responsible for the Subsidy  
Foreign Trade Administration, Ministry of Economy and Industry.  
2. Legal basis  
Government decisions and directives of the Ministry of Economy and Industry's Director General.  
3. Policy objective and/or purpose  
The purpose of the programme is to encourage exporters to adopt advanced marketing strategies, 
to use advanced marketing tools, to assist them in building a marketing infrastructure and to provide 
them with the necessary marketing training.  
4. Form of the subsidy  
• The subsid y is in the form of a conditional grant which offers 50% reimbursement of certain 
approved expenditures. Companies owned by minority groups in Israel (Muslims, Druze, 
Bedouins, Christians and Circassians) receive 75% reimbursement of the approved 
expenditu re. Those companies receive additional preferential treatment in the eligibility rules 
and the allocation process.  
• The programme supports the following expenses: training in international marketing, market 
analysis, marketing communication, participation i n professional exhibitions, marketing 
consulting, office establishment and management, employing local employees, flight 
expenses, legal assistance, regulatory expenses and foreign trade insurance. The conditional 
grant is given for a 2 -3 years' period, an d royalties payment is required only when the 
company presents profits from its activity.  
5. To whom the subsidy is provided  
The subsidy is provided to companies with international sales of over US$ 250,000 and a turnover 
of no more than approximately US$ 55, 000,000 (NIS  200 million) in all sectors.  
6. Budget/Expenditure  
Actual Annual Disbursement (in thousands USD)  
2020 17,774  
7. Duration  
On-going . 
8. Trade Effects  
There is no estimation of trade effects that may results from this programme yet.  G/SCM/N/372/ISR  
 
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  Shalav – A Gateway for International Marketing Programme  
1. The Authority Responsible for the Subsidy  
Foreign Trade Administration, Ministry of Economy and Industry.  
2. Legal basis  
Government decisions and directives of the Ministry of Economy and Industry's Director Gener al. 
3. Policy Objective and/or Purpose  
The purpose of the programme is to encourage small and medium companies to invest in global 
marketing efforts . 
4. Form of the Subsidy  
• The subsidy in the form of a conditional grant, offers 50% reimbursement of  certain 
approved expenditures. Companies owned by minority groups in Israel (Muslims, Druze, 
Bedouins, Christians and Circassians) can receive 75% reimbursement of the approved 
expenditure. Those companies receive additional preferential treatment in the eligibility rules 
and the allocation process.  
• The Programme supports the following expenses: training in international marketing, market 
analysis, marketing communication, and participation in professional exhibitions, marketing 
consulting, flight expenses , legal assistance, regulatory expenses and foreign trade 
insurance. The conditional grant is given for a 2 years' period, and royalties payment is 
required when the company presents profits from its activity.  
5. To Whom the Subsidy is provided  
The subsidy is  provided to companies with international sales of less than USD  250,000 and a 
turnover of not less than USD  125,000 (NIS  500,000) but not more than USD  25 million 
(NIS 100 million).  
6. Budget/Expenditure  
Actual Annual Disbursement (in thousands USD)  
2020 10,439  
7. Duration  
Ongoing.  
8. Trade Effects  
It is not possible to estimate yet what, if any, trade effects may result from the use of this 
programme.  
9  SUPPORT FOR EMPLOYMENT AND TRAINING  
Training Courses for Adults  
1. The Authority Responsible for the Subsidy  
Vocational Training and Development Bureau, Ministry of Labor, Social Affairs and Social Services.  G/SCM/N/372/ISR  
 
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  2. Legal Basis  
Government decisions.  
3. Policy Objective and/or Purpose  
To provide vocational courses for job seekers and targeted groups (such as single parents, 
minorities, people with disabilities), who need a vocation in order to find a suitable job.  
4. Form of the Subsidy  
The Ministry of Labor, Social Affairs and Social Services finances the courses and the workshops.  
5. To Whom the Subsidy is Provide d 
Daytime vocational courses for job seekers and targeted groups such as single parents, minorities, 
people with disabilities who need a vocation in order to find a suitable job in the modern labour 
market.  
The courses take place in vocational training ins titutes for a group of about 20 participants, generally 
unemployed. At the end of the course, the participants go through governmental exams and get 
official certification from the Ministry.  
6. Budget/Expenditure  
Actual Annual Disbursement s (in thousands USD)  
2020 9,248  
7. Duration  
Ongoing.  
8. Trade effects  
In light of the scope and nature of the assistance, no trade effects may result from this programme  
On the Job Training  
1. The Authority Responsible for the Subsidy  
Vocational Training and Development Bureau, Ministry of Labor, Social Affairs and Social Services.  
2. Legal Basis  
Government decision.  
3. Policy Objective and/or Purpose  
The purpose of the programme is to integrate job seekers in the workforce, lower the unemplo yment 
rate and instil a professional base during the period of employment in various industries for a 
selected list of vocational training courses, as specified on the Ministry's website.  
4. Form of the Subsidy  
Participation in the employees and mentor's sala ry for a period of six months.  G/SCM/N/372/ISR  
 
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  5. To Whom the Subsidy is Provided  
Any employer who is interested in hiring new employees and provides on the job training according 
to the job's requirements. The training is implemented through a mentoring system.  
6. Yearly Total Subsidy  
Actual Annual Disbursement s (in thousands USD)  
2020 2.8 
7. Duration  
The program has been put on hold for lack of budget until November 2020.  
8. Trade Effects  
In light of the scope and nature of the assistance, no trade effects may result from this programme  
9. Other Relevant Information  
The subsidy is given after the employee completes 6 months of employment.  
Factory Study Classroom  
1. The Authority Responsible for the Subsidy  
Vocational Training and Development Bureau, Ministry of Labor, Social Affa irs and Social Services . 
2. Legal Basis  
Government guidelines . 
3. Policy Objective and/or Purpose  
The purpose of the programme is to integrate job seekers into the workforce, lower the 
unemployment rate and to instil a professional base during the period of employment.  
4. Form of the Subsidy  
Providing a Professional Training Course.  
5. To Whom the Subsidy is Provided  
Any employers (factories, employer association, industry groups) who are interested in training job 
seeking students in preparation towards full emplo yment.  
6. Yearly Total Subsidy  
Actual Annual Disbursement s (in thousands USD)  
2020 879 
7. Trade Effects  
In light of the scope and nature of the assistance, no trade effects may result from this programme.  G/SCM/N/372/ISR  
 
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  Apprenticeship Training Program - "Starter"  
1. The Authority Responsible for the Subsidy  
Vocational Training and Development Bureau, Ministry of Labor, Social Affairs and Social Services . 
2. Legal Basis  
Government guidelines.  
3. Policy Objective and/or Purpose  
The purpose of the "Starter" programme is to provide  an apprenticeship professional training that 
integrates both theoretical and practical training in an academic institute, while being employed and 
acquiring professional experience. The programme provides skilled and experienced employees for 
the employer s and enables job seekers to acquire a profession parallel to work experience.  
4. Form of the Subsidy  
Professional training courses and workshops for job seekers and subsidies for employers for their 
financial participation in the employees training.  
5. To Whom the Subsidy is Provided  
The subsidy is provided in two forms:  
1.   Job seekers and employees that work in low -skilled positions who are interested in 
acquiring a profession and integrating in to that professional field.  
2.   Employers who are in need of skilled employees for vacant positions.  
6. Subsidy per Employee  
Actual Annual Disbursement s (in thousands USD)  
2020 1,646  
7. Duration  
Ongoing . 
8. Trade Effects  
In light of the scope and nature of the assistance, no trade effects may result from this programme  
Vouchers Programme  
1. The Authority Responsible for the Subsidy  
Vocational Training and Development Bureau, Ministry of Labor, Social Affairs and Social Services . 
2. Legal Basis  
Government decisions.  
3. Policy Objective and/or Purpose  
The purpose of the p rogramme is to encourage unemployed, job seekers among targeted population 
groups in the population to acquire vocational training and participate in the labour market.  G/SCM/N/372/ISR  
 
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  4. Form of the Subsidy  
Vouchers given by the Vocational Training and Development Bureau. A n average voucher is up to 
USD 2,178 and the maximum voucher is up to USD 3,272, for professional courses that can be taken 
at one of the institutions for vocational training.  
5. To Whom the Subsidy is Provided  
Unemployed, job seekers and targeted population groups such as single parents, minorities, people 
with disabilities, people above the age of 45, former prisoners and others who need a vocation in 
order to find a suitable job in the Israeli labour market.  
6. Subsidy per Employee  
Actual Annual Disbursement s (in thousands USD)  
2020 11,515  
7. Duration  
Ongoing.  
8. Trade Effects  
No trade effects may result from the use of this programme.  
10  THE INVESTMENTS AUTHORITY AT THE MINISTRY OF ECONOMY AND INDUSTRY  
Employment Grant Program  
1. The Authority Responsible for the Subsidy  
The Authority for Investments and Development of the Industry and Economy  at the Ministry of 
Economy and Industry . 
2. Legal basis  
The Law for the Encouragement of Capital Investments, 5719 -1959.  
Directives of the Director General and Government decisions.  
3. Policy Objective and/or Purpose  
To increase employment rates in disadvantaged geographic areas of Israel as well as specific 
populations which exhibit high rates of unemployment . 
4. Form of the Subsidy  
Grants based on 20 -40% of the employee's wage. The grants are given quarterly to the companies, 
for a period of two to three years to establish the employees on the job and create occupational 
future.  
5. To Whom the Subsidy is Provided  
Subsidies under this programme are offered to compani es establishing or expanding industrial 
plants, call centers, computer service support centers or logistic centers. In order to be eligible for 
this program, these companies must maintain minimal employment and wage levels.  G/SCM/N/372/ISR  
 
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  6. Budget/Expenditure  
Actual Annual  Disbursement (in thousands USD)  
2020 16,279  
7. Duration  
Ongoing.  
8. Trade Effects  
The programme assists businesses in disadvantaged geographic areas of the country. Therefore, it 
is hard to estimate what, if any, trade effects may result from this program.  
Investment Incentives in the Law for the Encouragement of Capital Investment  
1. The Authority Responsible for the Subsidy  
The Authority for Investments and Development of the Industry and Economy  at the Ministry of 
Economy and Industry.  
2. Legal basis  
The Law for the Encouragement of Capital  Investment, 5719 - 1959.  
3. Policy Objective and/or Purpose  
The purpose of this program is to encourage both local and foreign c apital investments and 
commercial entrepreneurship, particularly innovation and economic activities, in disadvantaged 
geographic  areas.  
4. Form of the Subsidy  
The support given under this programme is in the form of grants and/or reduced rates of taxation.  
Grants of up to 30% of the approved capital investment are given to approved enterprises located 
in disadvantaged geographic  areas.  
5. To Whom the Subsidy is provided  
Subsidies under this programme are provided to globally competitive industrial companies located 
in disadvantaged geographic areas.  
6. Budget/Expenditure  
Actual Annual Disbursement1 (in thousands USD)  
2020 80,758  
7. Duration  
Ongoing.  
 
1 Not including tax benefits.  G/SCM/N/372/ISR  
 
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  8. Trade Effects  
The assistance under this programme is granted to enterprises located in disadvantaged geographic 
areas, in order to offset local investment disadvantages and raise the levels of income and 
employment in structurally weak areas. Therefore, the programme is neutral in terms of competition 
and has no effect on competition in inte rnational trade.  
Reducing Greenhouse Gas Emissions and Improving Energy Efficiency Programme  
1. The Authority Responsible for the Subsidy  
The Authority for Investments and Development of the Industry and Economy at the Ministry of 
Economy and Industry.  
2. Legal basis 
Directives of the Director General and Government decisions.  
3. Policy Objective and/or Purpose  
The purpose of the programme is to encourage investments in energy efficiency projects and reduce 
greenhouse gas emissions.  
4. Form of the Subsidy  
Grants are given for the costs of preliminary planning of energy efficiency project, expenses for the 
purchase and installation of equipment and machinery, and technologies required to upgrade or 
replace existing technologies.  Each entity can apply for a g rant of 20% of its investment in the 
project, and up to NIS  3 million on a calendar year (in some cases up to NIS  6 million for  an Energy 
Service Company (ESCO) ). 
5. To Whom the Subsidy is provided  
The subsidy is provided to an entity that owns or has the rig hts for at least 5 years lease over a plot 
of land and wishes to carry out an energy efficiency project , or to an  Energy Service Company (ESCO) 
that has a license from the Ministry of Energy . 
The entity annual turnover should not exceed NIS  400 million. Th is condition does not apply to 
municipalities, education institutions and hospitals that are not state owned and to anyone who 
applied for a grant to commercial installation of new technology that constitute at least 51% of the 
investment in the project . 
6. Budget/Expenditure  
Actual Annual Disbursement (in thousands USD)  
2020 56,101  
7. Duration  
Terminated at the end of 2020.  
8. Trade Effects  
The subsidy is provided mainly to companies in disadvantaged geographic areas of the country and 
was designed to encourage gas consumption in the industrial sector and therefore its effect on 
trade, if any, is very limited.  G/SCM/N/372/ISR  
 
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  11  OTHER FORMS OF SUBSIDIES  
Cost of Land Development  
1. The Authority Responsible for the Subsidy  
Industrial Zones Administration, at the Ministry  of Economy and Industry . 
2. Legal Basis  
Government decisions.  
3. Policy Objective and/or Purpose  
Participation in the cost of land development in industrial areas in the disadvantaged geographic 
areas , as a means o f encouraging enterprises to locate in those areas. Land development includes 
inter alia dirt work, access roads and lights.  
4. To Whom the Subsidy is Provided  
Enterprises establishing their industries in a disadvantaged geographic area in accordance with the  
Law of Encouragement of Investment Capital and upon receiving approval from the authority 
responsible for allocation of land.  
5. Form of Subsidy  
Participation in the cost of land development varies from 30% up to 90%, according to several 
parameters, mainly the distance from the central part of Israel, past data on land demand for 
industry and social -economic rating of the municipality.  
6. Budget/Expenditure  
Actual Annual Disbursement (in thousands USD)  
2020 9,009  
7. Duration  
Ongoing.  
8. Trade Effects  
The programme provides participation of the Government in the development of basic infrastructure 
(land development), therefore the programme has no trade effects.  
Eilat Free Trade Zone  
1. The Authority Responsible for the Subsidy  
The Ministry of Fina nce. 
2. Legal Basis  
Eilat Free Trade Zone Law - 1985.  G/SCM/N/372/ISR  
 
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  3. Purpose of the programme  
The purpose of the programme is to encourage the development of the city of Eilat, located at 
Israel's most Southern border.  
4. Form of the Subsidy  
Several types of tax concessions.  
Most products (imported or domestically produced) purchased in Eilat are exempt from value -added 
tax. This tax benefit is available to Eilat residents and companies, for products consumed in Eilat. 
Employers receive tax refunds for employees of up to 20% o f gross wages paid to employees.  
5. To Whom the Subsidy is Provided  
The tax concessions are granted to Eilat residents and companies located in Eilat.  
6. Budget/Expenditure  
Data not available.  
7. Trade Effects  
It is not possible to estimate what, if any, trade effe cts may result from the use of this programme.  
Free Port Zone  
1. Authority Responsible for the Subsidy  
Ministry of Finance and Ministry of Transportation.  
2. Legal Basis  
Free Port Zone Law - 1969.  
3. Purpose of the programme  
The objective is to promote the development of the port city of Eilat at Israel's most Southern border.  
4. To Whom the Subsidy Is provided  
Enterprises located in the Free Port Zone of Eilat.  
5. Form of the Subsidy  
Various forms of tax incentives including, inter alia: 
1.   Enterprises in zone A (like Eilat) are entitled to reduction in income taxes to 9% in 
2014-2016;  
2.   A tax of 15% on dividends paid out of the above income with no stipulated time limit;  
6. Budget/Expenditure  
Data not available.  G/SCM/N/372/ISR  
 
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  7. Trade Effects  
It is not possible to estimate what, if any, trade effects may result from the use of this programme.  
Fisheries - Waiver of Excise Tax on Fuel 
1. Authority Responsible for the Subsidy  
Israel Tax Authority.  
2. Legal Basis  
2005 Decree on Excise Tax on Fuel (Waiver and Resti tution  ([unofficial translation].  
Under the decree, applications can be submitted for a tax refund on diesel. Eligibility for a refund is 
on the tax paid by those entitled for diesel used by fishing trawlers as specified in the Addendum to 
the Excise Order  on Fuel (Waiver and Restitution) . 
3. Purpose of the programme  
Excise tax on fuel is intended to reduce fuel consumption, while usage of fuel as an input factor for 
fisheries is exempt.  
4. To Whom the Subsidy is Provided  
The subsidy is provided to licenced trawler s. 
Form of the Subsidy  
Excise tax restitution.  
5. Budget/Expenditure  
Actual Annual Disbursement (in tho usands USD)  
2020 731,613  
6. Duration  
Ongoing.  
7. Trade Effects  
There are no trade effects.  
 
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