G/SCM/N/284/ISR  
G/SCM/N/315/ISR  
 
11 July 2018  
(18-4349) Page: 1/36 
Committee on Subsidies and Countervailing Measures  Original: English  
 
SUBSIDIES  
NEW AND FULL NOTIFIC ATION PURSUANT TO AR TICLE XVI:1 OF THE G ATT 1994  
AND ARTICLE 25 OF TH E AGREEMENT ON SUBSI DIES 
AND COUNTERVAILING M EASURES  
ISRAEL 
The following communication, dated 4 July 2018, is being circulated at the request of the 
delegation of Israel . 
 
_______________  
 
  G/SCM/N/284/ISR • G/SCM/N/315/ISR  
 
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  INDEX  
I. INTRODUCTION  ................................ ................................ ................................ ....... 4 
II. RESEARCH AND DEVELOP MENT  ................................ ................................ ...............  4 
A. THE INNOVATION AUTHO RITY – THE START -UP DIVISION  ................................ ..... 4 
1   TNUFA PROGRAMME  ................................ ................................ ................................ .... 4 
2   INCUBATORS PROGRAMME  ................................ ................................ .........................  5 
3   EARLY STAGE PROGRAM  ................................ ................................ ..............................  6 
4   RENEWABLE ENERGY ................................ ................................ ................................ ... 7 
B. THE INNOVATION AUTHO RITY – GROWTH DIVISION  ................................ .............  8 
1   RESEARCH AND DEVELOP MENT FUND  ................................ ................................ .........  9 
2   GENERIC R&D ARRANGEM ENT FOR LARGE COMPAN IES ................................ ..............  9 
3   ALTERNATIVE FUELS FO R TRANSPORTATION  ................................ ...........................  10 
4   SPACE TECHNOLOGY  ................................ ................................ ................................ . 11 
5   LARGE ISRAELI COMPAN IES IN ISRAEL'S PERI PHERY  ................................ ..............  12 
C. THE INNOVATION AUTHO RITY – TECHNOLOGICAL INFRAS TRUCTURE 
DIVISION  ................................ ................................ ................................ ..............  13 
1   MAGNET CONSORTIUMS  ................................ ................................ ............................  13 
2   MAGNETON  ................................ ................................ ................................ ................  14 
3   NOFAR  ................................ ................................ ................................ .......................  15 
4   KAMIN  ................................ ................................ ................................ .......................  16 
D. THE INNOVATION AUTHORITY – INTERNATIONAL COLLAB ORATION 
DIVISION  ................................ ................................ ................................ ..............  17 
1   BILATERAL PROGRAMMES  FOR PARALLEL SUPPORT  ................................ .................  17 
2   GLOBAL ENTERPRISE R& D ................................ ................................ ........................  18 
3   BI-NATIONAL FUNDS  ................................ ................................ ................................  19 
E. THE INNOVATION AUTHORITY  – ADVANCED MANUFACTURI NG DIVISION  ...........  20 
1   LOW -TECHNOLOGY INDUSTRY  ................................ ................................ ..................  20 
2   R&D PREPARATORY INCE NTIVE PROGRAMME FOR COMPANIES IN THE LOW -
TECHNOLOGY INDUSTRY  ................................ ................................ ................................  21 
F. THE INNOVATION AUTHO RITY – SOCIETAL CHALLENGES DIVISION .....................  22 
1   SUPPORT IN R&D OF ASSISTIVE TECHNOLOGY FOR THE D ISABLED  .........................  22 
2   PUBLIC SECTOR CHALLE NGES  ................................ ................................ ...................  23 
III. AID TO SMALL AND MED IUM-SIZED COMPANIES BY T HE SMALL AND 
MEDIUM BUSINESS AGEN CY ................................ ................................ ..........................  24 
1   SMALL AND MEDIUM BUS INESS AGENCY  ................................ ................................ ... 24 
2   INTENSIVE DESIGN PRO DUCT PROGR AMME  ................................ .............................  25 
IV. SUPPORT FOR EMPLOYME NT AND TRAINING  ................................ ........................  25 
1   TRAINING COURSES FOR  ADULTS  ................................ ................................ .............  25 
2   ON THE JOB TRAINING  ................................ ................................ ..............................  26 
3   VOUCHERS PROGRAMME  ................................ ................................ ...........................  27 
4   A GRANT TO NEWLY REL EASED SOLDIERS WHO W ORK IN HIGH DEMAND 
JOBS  ................................ ................................ ................................ ..............................  28 G/SCM/N/284/ISR • G/SCM/N/315/ISR  
 
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  V. OTHER FORMS OF SUBSI DIES  ................................ ................................ ...............  28 
1   INTERNATIONAL PROJEC TS FUND  ................................ ................................ .............  28 
2   INDIA -CHINA -JAPAN FUND  ................................ ................................ .......................  29 
3   SMART MONEY  ................................ ................................ ................................ ..........  30 
4   INFRASTRUCTURE CLUST ER PROGRAMME  ................................ ................................ . 31 
5   EMPLOYMENT GRANT PRO GRAM  ................................ ................................ ...............  32 
6   INVESTMENT INCENTIVE S IN THE LAW FOR THE ENCOURAGEMEN T OF 
CAPITAL  INVESTMENT  ................................ ................................ ................................ .. 32 
7   INDUSTRIAL GAS INSTA LLATION SYSTEM PROGR AMME  ................................ ...........  33 
8   COST OF LAND DEVELOP MENT  ................................ ................................ ..................  34 
9   EILAT FREE TRADE ZON E ................................ ................................ ...........................  34 
10   FREE PORT ZONE  ................................ ................................ ................................ ..... 35 
 
 G/SCM/N/284/ISR • G/SCM/N/315/ISR  
 
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  I. INTRODUCTION  
This notification relates to measures which are currently in force and provides, as far as possible, 
statistical information at least up to the end of 2016.  This notificatio n combines Israel's new and 
full notifications of  2014, 2015 and 2016.  
 
A considerable effort has been undertaken by the Government of the State of Israel to submit 
comprehensive notifications in accordance with the requirements of the Subsidies Agreement.  
The notifications follow, as far as possible, all the elements required by Article 25.3 of the 
Subsidies Agreement 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 this Agreement, nor does it 
prejudge its effects under the Agreement or the nature of the measure itself.  Furthermore, this 
does not come to imply in any way, that any of the measures notified, w holly or partly, amounts to 
a specific subsidy.  
 
II. RESEARCH AND DEVELOPMENT  
A. THE INNOVATION AUTHORITY – THE START -UP DIVISION  
The Authority Responsible for the Subsidy  
 
The Innovation Authority (formerly 'The Office of the Chief Scientist at the Ministry of Economy 
and Industry ') – the Startup Division. Amendments to the Law for the Encouragement of Industrial 
Research and Development, 5744 -1984 were made in 2015, which formed the legal basis for the 
establishment of the new 'Innovation Authority '.  
 
The Star tup Division offers unique tools to support the early development stages of technological 
initiatives. These tools assist entrepreneurs and startup companies in developing their innovative 
technological concepts at the pre -seed or initial R&D stages, trans form their ideas into reality and 
reach significant fundable milestones.  
 
Legal Basis  
 
The Law for the Encouragement of Industrial Research and Development, 5744 -1984.  
  
1  TNUFA PROGRAMME  
The Tnufa incentive programme is designed for fledgling 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 commercialization . 
 
Policy Objective and/or Purpose  
  
Support entrepreneurs in pro of of concept and business feasibility of the project .  
 
Form of the subsidy  
  
The conditional grant provided as part of the Tnufa incentive programme is up to 85% of the 
approved budget, with a maximum grant of NIS 200,000 for a period of up to two years . 
 
The grant funds are used for building an initial prototype, intellectual property protection and initial 
business development.  
 
To Whom the Subsidy is Provided  
  
The support is given to private entrepreneurs and new Israeli startup companies.  
 G/SCM/N/284/ISR • G/SCM/N/315/ISR  
 
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  Duration  
 
Ongoing.   
 
Budget/expenditure  
 
Actual Annual Disbursement (in million NIS)  
2014  13.0 
2015  14.4 
2016  13.7 
 
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  INCUBATORS PROGRAMME  
This incentive programme is designed for entrepreneurs who are interested in establishing a 
startup company based on an innovative technological concept. A technological incubator is a 
center for entrepreneurship intended to invest in new startup companies and provide them with 
administrative, technological and bu siness support. The incubator offers a supportive framework 
for the establishment of a company and development of a concept into a commercial product. 
Currently there are 18 technological incubators and 1 designated biotechnological incubator, which 
are pr ivately owned by seasoned and experienced groups, such as venture capital funds, 
multinational corporations, as well as private investors and others. The incubators are selected 
through competitive processes for a license period of eight years and are spre ad across Israel. The 
list of incubators operating in Israel is available on the Authority website.  
 
Policy Objective and/or Purpose  
 
Supporting entrepreneurs with innovative technological concepts at the initial stage of R&D in 
establishing startup compan ies and helping them reach a significant fundable milestone.  
 
Form of the subsidy  
The conditional grant provided as part of this incentive programme is 85% of the approved 
budget, with a budget limit of NIS 3,500,000 for a period of up to two years (depending on project 
type and geographical location of the incubator). An additional grant is available for a third year in 
accordance with the programme regulations.  
 
The conditional grant provided as part of the biotechnological incubator is 85% of the approved 
budget, with a budget limit of NIS 8,100,000 for a period of up to three years.  
 
Supplementary investment financing of 15% of the approved budget b y the incubator, which 
completes 100% of the total budget. Entrepreneur s are not required for a financial investment by 
their side.  
 
The support also include a comprehensive assistance from the incubator, including the availability 
of physical space and in frastructure, administrative services, technological and business guidance, 
legal advice and access to partners, additional investors and potential customers.  
 
To Whom the Subsidy is Provided  
The support is given to private entrepreneurs and new Israeli st artup companies.  
 G/SCM/N/284/ISR • G/SCM/N/315/ISR  
 
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  Duration  
Ongoing . 
 
Budget/expenditure  
 
Actual Annual Disbursement (in million NIS)  
2014  132.2  
2015  126.8  
2016  131.1  
 
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.  
 
3  EARLY STAGE PROGRAM  
The Early Stage Incentive Progra mme is designed for startup companies seeking to develop and 
promote an innovative technological project, as well as penetrate the market by raising 
investments from the private sector. The incentive programme offers three sub -programs: 
standard program, m inorities program, and ultra -orthodox program. Approval by the Authority 
serves as a significant springboard for companies in raising investments from the private sector.  
 
Policy Objective and/or Purpose  
To provide an incentive for private investments in e arly stage companies in product development 
and initial market penetration.  
 
Form of the subsidy  
 
The conditional grant provided under the Early Stage standard sub -programme is 50% of the 
approved budget (60% for companies operating in preferred development regions and 75% for 
companies operating in the area surrounding the Gaza Strip) with a maximum grant of 
NIS 5,000,000 for a period of up to two years.  
 
The conditional grant provided under the Early Stage Companies minorities/ultra -orthodox 
sub-program mes is 85% of the approved budget, with a maximum grant of NIS 2,000,000. 
The companies participating in these incentive programs can apply for continuation in the standard 
sub-program, with a maximum cumulative grant of NIS 5,000,000 for a cumulat ive period of up to 
two years.  
 
The company receiving the committee 's approval of the project will be given the opportunity to 
raise the complementary funding needed for the project, up to six months after the date of 
approval.  
 
To Whom the Subsidy is Provided  
New Israeli startup companies.  
 
The incentive programme offers preferential terms to companies held by minority/ultra -orthodox 
entrepreneurs.  
 
Duration  
Ongoing . 
  G/SCM/N/284/ISR • G/SCM/N/315/ISR  
 
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  Budget/expenditure  
 
Actual Annual Disbursement (in million NIS)  
2014  102.8  
2015  122.2  
2016  170.1  
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 exploit able process or product.  Therefore, the programme 
has no direct impact on trade.  
 
4  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 demonstration. The 
Center is operated by the private sector, composed of strategic investors and an academic 
institute. The Center 's activities are carried out  in a development area in the southern part of the 
country (Eilot region), allowing it to take advantage of the unique geographical and climatic 
conditions of the region, as well as the available government support.  
 
Policy Objective and/or Purpose  
To assist companies and entrepreneurs that are developing, or interested in developing, a product 
integrating an innovative technology that has economic potential in the fields of renewable energy 
and energy efficiency. In addition, the incentive programme  is designed for teams that can carry 
out the proposed R&D by themselves, on the technological and the managerial levels. This support 
is conditional upon the fact that the project could contribute to the development of the Eilot 
region.  
 
Form of the subsi dy 
The participants of all the sub -program mes receive professional and technical support from the 
Center 's staff for the completion of the project. The financial support depends on the 
sub-programme in which the operation is carried out:  
 
Primary sub-program me: Financial support of 66% of the approved R&D expenditures for an 
activity period of up to two years. In exceptional cases a one -year extension of the activity period 
will be approved without changes in the scope of the financial support. The  participants in this 
incentive programme are exempt from paying royalties to the Authority.  
 
Advanced sub -program me: Financial support of 60% or 85% of the approved R&D expenditures by 
the Authority, and supplementary financing 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 for existing young companies at the beginning of 
their activities, even if they have been supported in the past by other incenti ve programs of the 
Authority or as part of any other program.  
 
Financial support of 85% of R&D expenditures is available only for projects that did not previously 
receive government support as part of one of the Authority 's incentive programs, except for t he 
Primary sub -programme of the Renewable Energy Technology Center.  
 
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.  G/SCM/N/284/ISR • G/SCM/N/315/ISR  
 
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  Testing areas sub -program me: Financial support of 50% of the approved R&D expenditures for 
activity period of up to two years.  
 
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 incentive programme is available for early stage companies and entrepreneurs interested in 
developing technological projects in the renewable energy fields, as well as for researchers wishing 
to carry out applied research in the se areas, and companies that want to conduct experiments in 
the testing areas operated by the Center.  
 
The assistance is carried out via three sub -program mes: 
 
i. Primary sub -program me: Funding and support of applied R&D activities, via 
cooperation between academia and industry.  
 
ii. Advanced sub -program me: Funding and support of technological projects of beginning 
companies in the pre -seed and seed stages.  
 
iii. Testing areas sub -program me: Funding and support of demonstrations and 
experiments  
 
Duration  
Ongoing . 
 
Budget/expenditure  
 
Actual Annual Disbursement (in million NIS)  
2014  4.3 
2015  6.2 
2016  4.2 
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.  
B. THE INNOVATION AUTHORITY – GROWTH DIVISION  
The Authority Responsible for the Subsidy  
 
The Growth D ivision operates a wide range of incentive 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 t he increase 
of their growth rates and potential.  
 
Legal Basis  
 
The Law for the Encouragement of Industrial Research and Development, 5744 -1984.   
 G/SCM/N/284/ISR • G/SCM/N/315/ISR  
 
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  1  RESEARCH AND DEVELOP MENT FUND  
This is the main incentive programme designed for industrial R&D support for the  development of 
competitive products and innovative processes. The R&D Fund, which offers the greatest financial 
incentives for R&D activities from the Israeli government, provides commercial companies in all 
areas with support for the development processe s of new products 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. 
 
The R&D Fund facilitates most of the Growth Division programs (along with some other divisions' 
programs). The information in this section refers only to the general support for R&D projects 
within the fund.  
 
Policy Objective and/or Purpose  
The R&D Fund encourages technological innovation in order to strengthen and promote the Israeli 
economy.  
 
Form o f the subsidy  
A conditional grant of 20% to 50% of the approved R&D expenditures.  
Companies operating in development zones (periphery areas) are eligible for additional support 
of 10%.  
 
To Whom the Subsidy is Provided  
The support is offered to all business es in Israel and all their branches, at all stages of R&D.  
 
Duration  
Ongoing .  
 
Budget/expenditure  
 
Actual Annual Disbursement (in million NIS)  
2014  602.0  
2015  687.6  
2016  506.5  
 
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  GENERIC  R&D ARRANGEMENT FOR LARGE COMPANIES  
This incentive programme allows large companies to focus on long -term creation of new 
knowledge and technological infrastructure, used for the development or production of future 
innovative products.  
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 incentive programm e should include a long -term R&D plan or 
collaboration with another Israeli company.  G/SCM/N/284/ISR • G/SCM/N/315/ISR  
 
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  Form of the subsidy  
A grant of up to 50% of the approved R&D expenditures for long -term R&D plans or for an R& D 
project executed in cooperation with another Israeli company.  
To Whom the Subsidy is Provided  
Large Israeli companies with revenues of more than USD 100 million, with total R&D expenditures 
that are more than USD 20 million, or alternatively, Israeli co mpanies that employ at least 200 
employees directly in R&D.  
Duration  
Ongoing . 
Budget/expenditure  
 
Actual Annual Disbursement (in million NIS)  
2014  47.3 
2015  76.7 
2016  60.3 
 
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.  
 
3  ALTERNATIVE FUELS  FOR TRANSPORTATION  
The Israel Innovation Authority is participating in the national plan to reduce global dependence on 
the use of petroleum for transportation and to address the real need for the development of 
economically efficient and cleaner alternat ives than oil and its products. The incentive programme 
offers favorable conditions to investors, as well as assistance to technology companies in order to 
advance the field of petroleum substitutes in Israel and to expand the pool of funding sources 
available in the field for Israeli companies.  
 
Policy Objective and/or Purpose  
To encourage strategically -minded investors in Israel and abroad to finance Israeli companies 
engaged in the development and implementation of technologies in the field of alternative fuels for 
transportation, such as electric vehicle batteries, fuel cells , biofuels, synthetic fuels and more. The 
overall goals of this incentive programme are to reduce global dependence on petroleum as an 
energy source for transportation and to promote the development of Israeli hi -tech in this field.  
 
Form of the subsidy  
Companies supported by this incentive programme will receive:  
Financial assistance in the form of a loan, matching up to 50% of the total amount invested by 
private investors.  
 
A loan for the investment in the company – from NIS 750,000 (against NIS 1.5 mill ion invested by 
private investors) up to NIS 12 million shekels (against NIS 24 million invested by private 
investors).  
 
The maximum aggregate loan amount is NIS 30 million (against NIS 60 million invested by private 
investors), which can be obtained by th e company during its participation in the incentive 
programme (until 2020).  G/SCM/N/284/ISR • G/SCM/N/315/ISR  
 
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  The companies  are obligated  to repay the received funding via royalty payments only if the 
investors did not exercise the loan repayment option in exchange for additional shares in  the 
company, and only if the project results in sales.  
 
The companies will be able to receive the incentive program 's support together with the support of 
other programs offered by the Innovation Authority.  
 
The investors participating in this incentive programme will receive:  
An option allowing them to receive additional shares in the company under the conditions of the 
original investment, in exchange for the repayment of the full loan amount to the Authority instead 
of the company.  
 
Substantial governme nt participation in the risk involved in the funding of research, development 
and application of innovative technologies in the field of alternative fuels for transportation.  
 
To Whom the Subsidy is Provided  
Israeli technology companies engaged in the fiel d of oil substitutes for transportation.  
 
Israeli or foreign investors who wish to invest in Israeli companies engaged in the field of oil 
substitutes for transportation.  
 
Duration  
Ongoing.  
 
Budget/expenditure  
 
Actual Annual Disbursement (in million NIS)  
 
2014  11.0 
2015  19.2 
2016  15.6 
 
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.  
4  SPACE TECHNOLOGY  
This incentive programme is a joint initiative of the Authority and the Israel Space Agency of the 
Ministry of Science, Technology and Spa ce. 
Policy Objective and/or Purpose  
To encourage R&D for finding solutions in the fields of space technology, while strengthening 
knowledge and technological development capacity of Israeli industry. To reduce the knowledge 
gap between Israel and the globa l market and improve the competitiveness of Israeli industry, 
despite the existing challenges, such as significant technological risk and high development costs, 
limited production quantities, and expensive systems.  
Form of the subsidy  
Conditional grant of  up to 85% of the approved R&D expenditures for a period of 36 months.  G/SCM/N/284/ISR • G/SCM/N/315/ISR  
 
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  To Whom the Subsidy is Provided  
Companies that develop products in the field of space technology intended for installation in 
satellites or ground stations for management of satellite o perations.  
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 and testing of products in the fields 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.  
Duration  
Ongoing.  
Budget/expenditure  
 
Actual Annual Disbursement (in million NIS)  
2014  19.7 
2015  25.0 
2016  16.2 
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 pro cess or product.  Therefore, the programme 
has no direct impact on trade.  
5  LARGE ISRAELI COMPAN IES IN ISRAEL 'S PERIPHERY  
This incentive programme is part of the R&D Fund. The R&D centers located in Israel 's outlying 
areas and development zones have an immens e influence on the formation of independent 
economic activity.  
 
Policy Objective and/or Purpose  
To encourage large companies to establish R&D centers in Israel 's periphery, while constantly 
striving to reduce the gap between these outlying areas and the co untry 's center.  
Form of the subsidy  
A perennial approval of a conditional grant of 65% -75% of the approved R&D expenditures for an 
active R&D center in the periphery, for a period of two to three years.  
 
To Whom the Subsidy is Provided  
Large Israeli compan ies with a total sales turnover from their activities in Israel of more than 
USD 100 million (in the year prior to submitting the application) that wish to set up a development 
center in the periphery.  
The incentive programme is suitable for companies stating that over 50% of the total products 
that will be produced as part of the programme will be in Israel. Furthermore, the company 's R&D 
center will employ workers living in outlying areas in the rate not less than 40% of all employees 
in the first year of operations, 50% in the second year, and 60% in the third year.  
 G/SCM/N/284/ISR • G/SCM/N/315/ISR  
 
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  Duration  
Ongoing . 
 
Budget/expenditure  
 
Actual Annual Disbursement (in million NIS)  
2014  167.2  
2015  95.4 
2016  7.3 
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.  
C. THE INNOVATION AUTHORITY – TECHNOLOGICAL INFRASTRUCTURE DIVISION  
The Authority Responsible for the Subsidy  
The Technological Infrastructure Division focuses on collaboration between industry and academia 
to produce advanced technologi es and innovative products. The incentive programs offered 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. 
These incentive programs seek to strengthen the long -term technological advantages of Israeli 
industry in the face of fierce international competition.  
 
Legal Basis  
The Law for the Encouragement of Industrial Research and Development, 5744 -1984.   
 
1  MAGNET CONSORTIUMS  
The MAGNET incentive programme (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 cr eate a supportive work 
environment. Collaboration with industry also strengthens the commercialization capabilities of 
research institutions and assists them in understanding market needs. Goal of the incentive 
program: To assist in the development of gene ric technologies in important fields in the global 
market, in which Israeli industry has a competitive advantage. Since the incentive programme 
specializes in the development of infrastructural technology, it allows distribution of knowledge and 
cooperatio n between companies operating in the same field, which may be difficult to achieve 
otherwise.  
Form of the subsidy  
The amount of the grant provided through the consortium 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 to five years, in order to facilitate a long -term R&D process.  
To Whom the Subsidy is Provided  
Israeli manufacturing companies developing competitive products and simultaneously seeking to 
develop innovative technologies, which can be used as a basis to develop a new and advanced 
generation of products.  G/SCM/N/284/ISR • G/SCM/N/315/ISR  
 
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  Israeli academic research groups engaged in s cientific 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.  
Duration  
Ongoing.   
Budget/expenditure  
 
Actual Annual Disbursement (in million NIS)  
2014 123.7  
2015  153.8  
2016  166.5  
 
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  MAGNETON  
The MAGNETON incentive programme (Generic Pre -Competitive Technological R&D) focuses on 
consortiums of industrial companies and research institut ions that collaborate to develop 
innovative technologies. The consortiums enable long -term R&D and create a supportive work 
environment. Collaboration with industry also strengthens the commercialization capabilities of 
research institutions and assists th em in understanding market needs.  
Policy Objective and/or Purpose  
To assist in the development of generic technologies in important fields in the global market, in 
which Israeli industry has a competitive advantage. Since the incentive programme specialize s in 
the development of infrastructural technology, it allows distribution of knowledge and cooperation 
between companies operating in the same field, which may be difficult to achieve otherwise.  
Form of the subsidy  
The amount of the grant provided through  the consortium 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 to five years,  in order to facilitate a long -term R&D process  
To Whom the Subsidy is Provided  
Israeli manufacturing companies developing competitive products and simultaneously seeking to 
develop innovative technologies, which can be used as a basis to develop a new and  advanced 
generation of products.  
Israeli academic research groups engaged in scientific 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.  
Duratio n 
Ongoing.  G/SCM/N/284/ISR • G/SCM/N/315/ISR  
 
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  Budget/expenditure  
 
Actual Annual Disbursement (in million NIS)  
2014  27.7 
2015  22.1 
2016  18.8 
 
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.  
 
3  NOFAR  
The NOFAR incentive programme provides support for applied research in acad emia, thus 
potentially increasing its economic contribution to the economy. This incentive programme focuses 
on technologically feasible ideas, which are not mature enough for the support of the MAGNETON 
incentive program, but require financing in the init ial applied research stage at universities in order 
to match them with the appropriate industrial sector. The NOFAR incentive programme is limited 
to the fields of biotechnology and nanotechnology only, for a period of one year.  
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 incentive programme are in academic institutions, accompanied by the 
support of an industrial company that sees business potential in the achievements of the project. 
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. The research activities in the incentive programme will receive professional support by 
an industrial company or a relevant business entity (such as a venture capital f und).  
Form of the subsidy  
The research institution supported by the NOFAR incentive programme is entitled to a grant of up 
to 90% of the approved budget with a maximum scope of NIS 550,000 for a period of 12 months, 
with an option to extend the support up to 15 months.  
The supporting company serves as 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 the first right  to negotiate a 
commercialization agreement with the research institution.  
NOFAR research conducted in collaboration with two different institutions is eligible for funding of 
up to NIS 660,000.  
The incentive programme offers two fixed annual deadlines: No vember 30 and May 31.  
 
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 not mature enough to be supported by the industry 
or by the MAGNETON incentive program.  
 
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.  
 G/SCM/N/284/ISR • G/SCM/N/315/ISR  
 
- 16 - 
 
  Duration  
 
Ongoing.   
Budget/expenditure  
 
Actual A nnual Disbursement (in million NIS)  
2014  7.7 
2015  6.1 
2016  8.8 
 
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.  
 
4  KAMIN  
The KAMIN incentive programme serves as a bridge between basic and applied research and is 
focused on the stage of tran sformation and realization of basic research achievements into 
technologies with commercial application.  
Policy Objective and/or Purpose  
To encourage applied research in academia that can attract the investment interests of business 
entities willing to coo perate with the research institution towards a commercialization agreement.  
Form of the subsidy  
A grant of 85% -90% of the approved budget, up to a maximum amount of NIS 400,000. 
The support is provided for a period of one or two years, with the possibility  to extend this period 
in exceptional cases with a reduced grant of 66% of the approved budget.  
To Whom the Subsidy is Provided  
Research groups from Israeli universities, colleges, research institutes and medical centers that 
seek to conduct applied resear ch, building upon the basic research. The research must be 
innovative and original in terms of industrial application; its results should be applicable to 
industries in Israel and potentially have high added value for the entire economy.  
Duration  
Ongoing.   
Budget/expenditure  
 
Actual Annual Disbursement (in million NIS)  
2014  43.0 
2015  39.8 
2016  45.4 
 
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 G/SCM/N/284/ISR • G/SCM/N/315/ISR  
 
- 17 - 
 
  R&D project to lead to a commercially exploitable process or product.  Therefore, the programme 
has no direct impact on trade.  
D. THE INNOVATION AUTHORITY – INTERNATIONAL COLLABORATION DIVISION  
The Authority Responsible for the Subsidy  
The International Collaboration Division is responsible for creating bridges to new international 
markets, building platforms for cooperation in innovative R&D, and attracting strategic foreign 
stakeholders to Israel, all while creating competi tive advantages for the Israeli industry in the 
global market.  
Operated by the Europe, Americas and Asia Pacific Desks, as well as the desk for multinational 
corporations, support for international cooperation projects is made possible through an array of  
bilateral cooperation agreements and bi -national funds, as well as through the EU Framework 
Programme for Research and Innovation.  
Together with its counterpart organizations abroad, the division coordinates calls for proposals for 
funding and assists in matching partners in Israel and abroad for joint R&D projects and other 
business ties.  
Legal Basis  
The Law for the Encouragement of Industrial Research and Development, 5744 -1984.   
1  BILATERAL PROGRAM MES FOR PARALLEL SUPPO RT 
The bilateral programs for parall el support of industrial R&D are based on government -to-
government (G2G) international agreements and implementation agreements between 
government agencies and regional authorities that 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 the Asia -Pacific region, North and South America, and Europe.  
 
Policy Objective an d/or Purpose  
To promote international cooperation in R&D based on significant technological innovation, in order 
to increase competitiveness and the relative advantage of Israeli companies in the global market. 
In addition to providing a conditional grant that allows the sharing of the risk inherent in project 
funding, these programs also offer assistance in finding technology and business partners, as well 
as access to governmental support for the project.  
Form of the subsidy  
Assistance in finding a foreig n partner.  
Conditional grants of up to 50% of the approved budget of a R&D project, or in accordance with 
the financial incentive programme relevant for a joint project.  
Depending on the nature of the R&D collaboration agreement between the two countries, the 
approval for cooperation can be provided without financial assistance (self -financing of the 
applicant company).  
 
To Whom the Subsidy is Provided  
Technological industrial companies from all industry sectors that wish to develop or upgrade the 
developme nt of products, services or manufacturing processes with an industrial company from a 
foreign country.  
Israeli technology companies and start -ups seeking to create strategic alliances and partnerships 
with companies and organizations abroad, to expand thei r operations, gain access to innovative G/SCM/N/284/ISR • G/SCM/N/315/ISR  
 
- 18 - 
 
  R&D infrastructure abroad (labs, simulators, etc.), locate additional sources of financing, break 
into new markets and benefit from the access to knowledge and technology existing overseas.  
 
Duration  
Ongoing.   
Budget /expenditure  
Actual Annual Disbursement (in million NIS)  
2014  68.7 
2015  81.1 
2016  82.9 
 
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  GLOBAL ENTERPRISE R& D 
Connecting foreign multinational corporations (MNCs) and innovative Israeli companies.  
 
Policy Objective and/or Purpose  
To enable small and medium Israeli companies to establish relationships with MNCs and take part 
in their technological and marketing activities. Encourages networking and strategic cooperation 
between the two sid es. 
Form of the subsidy  
Israeli companies receive a conditional grant of 20% -50% of the development budget approved by 
the Research Committee of the Authority.  
Israeli companies receive assistance and support from the MNC in the form of consulting, service s 
and resources.  
Israeli companies may keep their intellectual property (IP) or share the ownership of it with the 
MNC, or provide the MNC with a non -exclusive license to use the new knowledge through an 
agreement between the project partners.  
The MNC rece ives 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 diligence results of the Israeli partner 
companies.  
To Whom the Subsidy is Provided  
Israeli technology companies , especially start-ups and young and innovative companies engaged 
in R&D and interested in paving their way to new markets and business channels in Israel and 
abroad.  
 
Multinational corporations from all sectors and countries with annual revenues of over 
USD 2 billion, with significant investment in R&D and with worldwide presence, that are interested 
in identifying relevant Israeli companies and working with them on joint R&D projects.  
 
Duration  
 
Ongoing.   G/SCM/N/284/ISR • G/SCM/N/315/ISR  
 
- 19 - 
 
  Budget/expenditure  
 
Actual Annual Disbursement (in  million NIS)  
2014  2.5 
2015  0.9 
2016  1.4 
 
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.  
 
3  BI-NATIONAL FUNDS  
The Israel Innovation Authority operates bi -national funds along with its counterparts in foreign 
countries, in accordance wit h 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.  
 
There are currently four bi -nationa l funds:  
i. BIRD – Israel -United States  
ii. CIIRDF – Israel -Canada  
iii. SIIRD – Israel -Singapore  
iv. KORIL – Israel -Korea  
 
Policy Objective and/or Purpose  
To increase the competitiveness and relative advantage of Israeli companies in the global market, 
by encouraging coop eration between them and foreign companies, in addition to promotion and 
development of new and complementary technologies, and reduction of financial and technological 
risk exposure.  
Form of the subsidy  
 Assistance in finding a partner.  
 Financial assistanc e of up to 50% of the approved budget for a R&D project.  
 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.  
To Whom the Subsidy is  Provided  
Technology companies from all industrial sectors that seek to develop or upgrade innovative 
products or processes with an international 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.  
Duration  
Ongoing.   G/SCM/N/284/ISR • G/SCM/N/315/ISR  
 
- 20 - 
 
  Budget/expenditure  
Data not available.  
Trade Eff ects 
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.  
E. THE INNOVATION AUTHORITY – ADVANCED MANUFACTURING DIVISION  
The Authority Responsible for the Subsidy  
The Advanced Manufacturing Division focuses on promoting the implementation of R&D and 
innovation proc esses 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 incentive programs offered by this division boost manufacturing -oriented i ndustries 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.  
Legal Basis  
The Law for the Encouragement of Industrial Research and D evelopment, 5744 -1984.   
1  LOW -TECHNOLOGY INDUSTRY  
Sectors in low -tech industry struggle to cope with increasing global competition. To prevent 
stagnation and regression in the low -tech sectors, the Authority provides a variety of incentives 
designed especial ly to meet these sectors ' needs and to encourage innovation in them  
Policy Objective and/or Purpose  
To encourage low -tech enterprises to promote and implement innovative technological processes, 
such as the development of innovative products, improvement o f existing products and production 
processes, and more. In addition, this incentive programme assists factories and plants in 
developing new strategies based on technological differentiation, in order to create competitive 
advantages in domestic and intern ational markets.  
To Whom the Subsidy is Provided  
Israeli industry sectors engaged mainly in low -tech and medium -low tech, as defined by the 
Central Bureau of Statistics. These sectors include: plastics, rubber, metal, glass, ceramics, 
building materials, t extiles, wood, leather, paper, jewellery  and food.  
Companies that wish to determine whether their activities qualify for participation in this incentive 
programme can apply to the Authority, requesting it to carry out a preliminary examination 
regarding their affiliation to the low -tech industry.  
Duration  
Ongoing.   
Budget/expenditure  
Actual Annual Disbursement (in million NIS)  
2014  84.2 
2015  93.8 
2016  69.2 G/SCM/N/284/ISR • G/SCM/N/315/ISR  
 
- 21 - 
 
  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  R&D PREPARATORY INCE NTIVE PROGRAMME FOR COMPANIES IN THE  LOW -
TECHNOLOGY INDUSTRY  
A preparatory incentive programme 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 pr ocesses, or companies that require focus and guidance with their R&D activities. As 
part of the incentive program, the participating companies get partial funding for their counselling  
expenses, including mapping and examination of existing technological c apabilities, formulation of 
future goals, examination of technological gaps, and guidance for improving their capabilities 
through the implementation of technology and more advanced products.  
Policy Objective and/or Purpose  
To create a corporate culture ch ange in the low -tech industry sectors including instilling values and 
working methods for continuous R&D and innovation derived from market needs. This incentive 
programme will increase the competitiveness of the participating companies through implementin g 
R&D processes and adopting new technologies.  
 
Form of the subsidy  
 The Authority will fund 75% of the consultancy fee and the company will fund 25% of this 
fee. 
 The hourly consulting rate limit is NIS 200 per hour. The company will receive funding of up 
to 200 hours.  
 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.  
To Whom the Subsidy is Provided  
Companies in low -tech industrial sectors that seek consu ltation and guidance in their first 
R&D steps or companies whose R&D capabilities require guidance and upgrade. Applicant 
companies select a consultant from either the Authority 's pool of consultants or an independent 
consultant approved by the steering co mmittee of the incentive program.  
 
Duration  
 
Ongoing.   
 
Budget/expenditure  
 
Data not available.   
 
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.  G/SCM/N/284/ISR • G/SCM/N/315/ISR  
 
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  F. THE INNOVATION AUTHORITY – SOCIETAL CHALLENGES DIVISION  
The Authority Responsible for the Subsi dy 
The Societal 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 purpose of this division is 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 an d the Israeli entrepreneurial community by encouraging and creating demand for 
technological solutions.  
 
Legal Basis  
The Law for the Encouragement of Industrial Research and Development, 5744 -1984.   
 
1  SUPPORT IN R&D OF AS SISTIVE TECHNOLOGY F OR THE DISABLED  
This incentive programme encourages R&D of unique technological solutions for people with 
special needs, in order to improve their quality of life and better integrate them into society, the 
community, and the labor market. These developments benefit peopl e with special needs, making 
them net contributors to society and the state.  
Policy Objective and/or Purpose  
To support the development of technological solutions designed to ease the lives of people with 
special needs and to help them integrate into socie ty and the labor market.  
Form of the subsidy  
Nonprofits receive support of 85% of the approved expenses for R&D, with no repayment of 
royalties. Commercial companies receive support of 65% of the approved budget as a conditional 
grant. The conditional gran t is provided for a period of up to two years, up to a total of 
NIS 600,000 a year.  
To Whom the Subsidy is Provided  
Israeli companies and nonprofit organizations interested in developing technologies that serve 
groups with physical, mental or cognitive dis abilities, who collectively represent 0.25% -5% of the 
population.  
Duration  
Ongoing.  
 
Budget/expenditure  
 
Actual Annual Disbursement (in million NIS)  
2014  3.7 
2015  3.9 
2016  4.5 
 
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.  G/SCM/N/284/ISR • G/SCM/N/315/ISR  
 
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  2  PUBLIC S ECTOR CHALLENGES  
This incentive programme was launched by the Authority as part of the "Digital Israel " project of 
the Ministry for Social Equality. The incentive programme serves as an additional tool of the 
government to encourage innovation through prel iminary purchase of innovative technological 
solutions.  
 
The incentive programme offers two channels of support:  
1. Preliminary R&D incentive programme intended for technological feasibility and/or feasibility of 
the business idea for the development of a product/service/process or a material improvement of 
an existing product/service/process.  
2. "Innovation in the public sector " R&D incentive programme intended for R&D of a 
product/service/ process or a material improvement of an existing product/service/p rocess.  
Policy Objective and/or Purpose  
To identify and publish public challenges requiring response and support, as well as to assist 
entrepreneurs in developing innovative products and processes that will address the challenges 
and needs of the public se ctor. These products should improve the quality of services provided by 
government departments or public entities, including better access to public services, reduction of 
government bureaucracy, better protection of public information, and easier access t o information 
for the public.  
Form of the subsidy  
Preliminary R&D track:  Financial support of up to 90% of the approved budget or a conditional 
grant in the amount of NIS 300,000 for a period of 18 months.  
R&D track: Financial support of up to 50% of the a pproved budget or a conditional grant in the 
amount of NIS 4 million for a period of 24 months.  
To Whom the Subsidy is Provided  
Israeli companies or private Israeli entrepreneurs seeking to develop, manufacture, and 
commercialize products, services, and pr ocesses that will support the goals of this incentive 
program. Applications to join the incentive programme will be examined according to the 
technological innovation criteria and the response to the needs defined as prioritized by the Digital 
Israel Fund.  
Duration  
Ongoing.   
Budget/expenditure  
Actual Annual Disbursement (in million NIS)  
2016  18.1 
 
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.  
 G/SCM/N/284/ISR • G/SCM/N/315/ISR  
 
- 24 - 
 
  III. AID TO SMALL AND MEDIUM -SIZED COMPANIES BY THE SMALL AND MEDIUM 
BUSINESS AGENCY  
1  SMALL AND MEDIUM BUSINESS AGENCY  
The Authority Responsible for the Subsidy  
 
Small and Medium Business Agency (SMBA).  
 
Legal Basis  
 
Government decision.   
 
Policy Objective and/or Purpose  
 
The purpose of the agency is to aid owners and entrepreneurs of small businesses in es tablishing, 
managing and expanding their business.   
 
Form of the Subsidy   
State loan guarantee . As of September 2003, by means of a State deposit at the bank offering 
the best terms of loans and parallel guarantees to small business. The credit limit for a small 
business is 143,000  US$ and the credit limit for a medium business with up to 1,800 thous ands 
US$ annual turnover, is 2,286 thousands US$. The loan is given for a period of up to five years 
with half a year grace.  
 
The Small and Medium Business Agency also established 39 SBDCs (Small Business Development 
Centers) call MAOF centers. The SMBA  is finance, monitoring and control these centers.  These 
centers are meant to serve as a central address for small businesses owners and for entrepreneurs 
that are planning new businesses.  They are designed as "one -stop shop" for entrepreneurs 
training.   
 
To Whom the Subsidy is Provided  
 
Micro, Small and Medium Enterprises with emphasis to disadvantage populations. Loans with 
government guarantee are provided to small firms with up to 100 employees and an annual 
turnover of up to  28,570  thousand US$ . 
 
Budge t/Expenditure  
 
Actual Annual Government Expenditure of Israel Small and Medium Business Agency 
(in thousands of US$)  
 
SBDC (MAOF):  
 
2014  25,000  
2015  30,000  
2016  35,000  
 
State loan guarantee : Approximately 20 million US$ for each year from 2012.  
 
Duration  
 
Ongoing.   
 
Trade Effects  
 
In light of the scope and nature of the assistance, it is not possible to determine what, if any, 
trade effects may result from this programme .  
 G/SCM/N/284/ISR • G/SCM/N/315/ISR  
 
- 25 - 
 
  Other Information  
 
The agency was established in 2010.  
 
2  INTENSIVE DESIGN PRODUCT PROGRAMME  
The Authority Responsible for the Subsidy  
 
Small and Medium Business Agency.  
 
Legal Basis  
 
Directives of the Director General of the Ministry of Economy and Industry  
 
Policy Objective and/or Purpose  
 
The purpose of the programme is to inc rease awareness of the importance of industrial design and 
by that to increase the competitive advantage of those companies ' products.   
 
Form of the Subsidy  
 
Grants amounting to up to 60 per cent of the expenses on design and planning and up to a ceiling 
of 57,000 US$  
 
To Whom the Subsidy is provided  
 
The subsidy is provided to manufacturers employing up to 100 employees in factories located in 
disadvantaged areas and desire to develop innovative design of their products.  
 
Budget/Expenditure:  (actual annual disbursements (In thousands US$))  
 
2014  15 
2015  0 
2016  15 
 
Duration  
 
Ongoing.  
 
Trade Effects  
 
In light of the scope and nature of the assistance, it is not possible to determine what, if any, 
trade effects may result from this programme.   
 
IV. SUPPORT FOR EMPLOYMENT AND TRAINING  
1  TRAINING COURSES FOR  ADULTS  
The Authority Responsible for the Subsidy  
 
Division of Training and Development of Human Resources, Ministry of Economy and Industry.  
 
Legal Basis  
 
Criteria determined by an Inter -Ministerial committee.   
 
Policy Objective and/or Purpose  
 
To provide vocational courses for unemployed and job -seekers and special groups such as single 
parents, minorities, people with disabilities and others who need a vocation in order to find a 
suitable job in the  modern market.   G/SCM/N/284/ISR • G/SCM/N/315/ISR  
 
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  Form of the Subsidy  
 
Courses and Workshops are financed by the Ministry  of Economy and Industry.   
 
To Whom the Subsidy is Provided  
 
Daytime vocational courses for unemployed and job -seekers and special groups such as single 
parents, minori ties, people with disabilities and others who need a vocation in order to find a 
suitable job in the modern market.   
 
The courses take place in vocational training institutes for a group of about 20 participants, 
generally unemployed.  At the end of the course, the participants go through governmental 
examinations and get official certification from the Ministry.  
 
Budget/Expenditure  
 
Actual annual disbursements (in thousands US$)  
2014  7,854  
2015  7,512  
2016  7,488  
 
Duration  
 
Ongoing.   
 
Trade effects  
 
In light of the scope and nature of the assistance, no trade effects may result from this 
programme . 
 
Other information  
 
The amount of subsidy has been constantly decreasing since 2011.  
 
2  ON THE JOB TRAINING  
The Authority Responsible for the Subsidy  
 
Divisio n of Training and Development of Human Resources, Ministry of Economy.  
 
Legal Basis  
 
Directives of the Director General of the Ministry of Economy and Industry.   
 
Policy Objective and/or Purpose  
 
The purpose of the programme is to encourage employers to hi re new employees, despite their 
relatively low productivity rate during the initial period of employment.   
 
Form of the Subsidy  
 
A six month's  participation in the employ ee's salary .  
 
To Whom the Subsidy is Provided  
 
Any employer who hires persons registered as unemployed at the Israel Employment Service and 
provides a training course approved by the Division of Training and Development of Human 
Resources.   
 G/SCM/N/284/ISR • G/SCM/N/315/ISR  
 
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  Subsidy per Employee  
 
Actual annual disbursements (in thousands US$)  
2014  1,453  
2015  2,564  
2016  3,875  
 
Duration  
 
Ongoing.   
 
Trade Effects  
 
In light of the scope and nature of the assistance, no trade effects may result from this 
programme  
 
Other Relevant Information  
 
The subsidy is given during the first six working months of the new employee.   
It is given on the date on which the new employee begins working, but not earlier than the date of 
the application for the subsidy by the employer.   
 
3  VOUCHERS PROGRAMME  
The Authority Responsible for the Subsidy  
 
Division of Training and Development of Hu man Resources, Ministry of Economy and Industry.  
Legal Basis  
 
Directives of the Director General of the Ministry of Economy and Industry.   
 
Policy Objective and/or Purpose  
 
The purpose of the programme is to encourage unemployed,  job-seekers among s pecial groups in 
the population to acquire vocational training and participate in the Labour market.  
 
Form of the Subsidy  
 
Vouchers given by the Division of Training and Development of Human Resources  in the Ministry of 
Economy and Industry . Each voucher i s up to 1,225$.  
 
To Whom the Subsidy is Provided  
 
Unemployed, job -seekers and special groups such as single parents, minorities, people with 
disabilities, people above age 55, former prisoners and others who need a vocation in order to find 
a suitable job  in the Israeli market.   
 
Subsidy per Employee  
 
Actual annual disbursements (in thousands US$)  
2014  4,909  
2015  5,700  
2016  8,905  
 
Duration  
 
Ongoing.   
 G/SCM/N/284/ISR • G/SCM/N/315/ISR  
 
- 28 - 
 
  Trade Effects  
 
No trade effects may result from the use of this programme.  
 
4  A GRANT TO NEWLY REL EASED SOLDIERS WHO WORK IN  HIGH DEMAND JOBS  
The Authority Responsible for the Subsidy  
 
The National Insurance Institute.   
 
Legal Basis  
 
The National Insurance Law - 1968.  
  
Policy Objective and/or Purpose  
 
The purpose of the programme is two -fold:  
 
1. Motivate young people, to seek work rather than to receive unemployment fees.   
2. Encourage mainly unskilled young people after the completion of their compulsory military 
service to join sectors in which unskilled labour is in high demand, such as in industry, agr iculture, 
construction and tourism.  
 
Form of the Subsidy  
 
Grant.  
 
Subsidy per Employee  
 
Expenditure: actual disbursements (In US$)  
2,669  2014  
2,457  2015  
2,487  2016  
 
Duration  
 
Ongoing.   
 
Trade Effects  
 
Considering its limited application, low budget and limited economic effect, this programme has no 
effect on trade.  
 
Other Relevant Information  
 
The payment of the subsidy to the employee is made after he/she has completed six months of 
work in a high demand job.  
 
The employee is entitled to the subsidy onl y if he/she commences working not later than twelve 
months after his/her completion of compulsory military service.  
 
V. OTHER FORMS OF SUBSIDIES  
1  INTERNATIONAL PROJEC TS FUND  
The Authority Responsible for the Subsidy  
Foreign Trade Administration, Ministry of Economy and Industry.  G/SCM/N/284/ISR • G/SCM/N/315/ISR  
 
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  Legal basis  
Directives of the Director General of the Ministry of Economy and Industry.  
Policy Objective and/or Purpose  
The Fund's goal is to encourage Israeli companies to apply for tenders or projects  abroad, by 
sharing the financia l risk. The way to achieve the goal is by supporting the expenses of feasibility 
studies, tenders' applications and background survey.   
Form of the Subsidy  
The subsidy is in the form of a loan amounting up to 50 per cent of the approved 
expenditure.  The fund supports expenses of consultants, travel expenses, equipment and 
marketing materials. The loan is given per project, while loan repayments are required only when 
the company succeeds in obtaining the project or wining the tender.  
To Whom the Subsidy is  provided  
The subsidy is provided to any company in all sectors, which presents a specific offer for a project 
containing at least 35% Israeli added value.  The estimated financial value of a project for 
feasibility study for a background survey is at least 500,000 US$.  
Budget/Expenditure:  (Actual annual disbursements (in thousands US$))1 
2014  803 
2015  407 
2016  760 
 
Duration  
 
Ongoing.  
 
Trade Effects   
 
In light of the scope and nature of the assistance, no trade effects may result from this 
programme.   
 
2  INDIA -CHINA -JAPAN FUND  
The Authority Responsible for the Subsidy  
 
Foreign Trade Administration, Ministry of Economy and Industry.  
 
Legal basis  
 
Directives of the Director General of the Ministry of Economy and Industry.   
 
Policy Objective and/or Purpose  
 
The purpose of the fund is to increase Israel's  trade activity with India, China and Japan by 
supporting Israeli companies in establishing marketing offices  and beta sites in those target 
markets.  
 
                                                
1 All US$ values  in this document are based on the NIS -USD exchange rate on  31 Dec ember  of each 
year. G/SCM/N/284/ISR • G/SCM/N/315/ISR  
 
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  Form of the Subsidy  
 
The subsidy is in the form of a loan amounting up to 50 per cent of the approved expenditure. 
The fund supports expenses of marketing consultant, office establishment and management, and 
local worker. The loan is given for a 3 year period, while loan repayments are required when the 
company  earns profits from its activity.  
To Whom the Subsidy is provided  
The subsidy is provided to companies with a turnover of at least 4M$, in all sectors, intending to 
establish a local office in India, China or Japan, with at least 35% Israeli added value.  
 
Budget/Expenditure: (Actual annual disbursements (in thousands US $)) 
 
9,000  2014  
3,840  2015  
 
Duration  
Terminated in 2015  
 
Trade Effects  
It is not possible to estimate yet what, if any, trade effects may result from the use of this 
programme.  
 
3  SMART MONEY  
The Authority Responsible for the Subsidy  
 
Foreign Trade Administration, Ministry of Economy and Industry.  
 
Legal basis  
 
Directives of the Director General of the Ministry of Economy and Industry.   
 
Policy Objective and/or Purpose  
 
The purpose of the programme is encourage exporters to adopt advanced marketing s trategies, to 
use advanced marketing tools, to assist them in building a marketing infrastructure and provide 
the necessary marketing training.  
Form of the Subsidy  
The subsidy is in the form of a  loan amounting between 35% -75% of the approved expenditure. 
The fund supports expenses of marketing consultant, office establishment and management, and 
local worker. The loan is given for a 2 -3 year period, while loan repayments are required when the 
company presents profits from its activity.  
To Whom the Subsidy is provided  
 
The subsidy is provided to companies with international sales of over 250,000 US$ and a turnover 
of no more than approximately 55,000,000 US$ (200 million NIS) in all sectors.  
 G/SCM/N/284/ISR • G/SCM/N/315/ISR  
 
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  Budget/Expenditure:  (Actual annual disbursements (in thousands US$))  
 
*3,043  2014  
9,938  2015  
10,974  2016  
* The programme was launched during the second half of 2014 . 
 
Duration  
 
Ongoing . 
 
Trade Effects  
 
It is not possible to estimate yet what, if any, trade effects may result from the use of this 
programme.  
 
4  INFRASTRUCTURE CLUST ER PROGRAMME  
The Authority Responsible for the Subsidy  
 
Foreign Trade Administration, Ministry of Economy and Industry.  
 
Legal basis  
 
Directives of the Director General of the Ministry of Economy and Industry.   
 
Policy Objective and/or  Purpose  
 
The programme encourages the establishment of a marketing demonstration site for a group of at 
least 5 companies together.  
 
Form of the Subsidy  
 
The subsidy is in the form of  a loan amounting up to 50 per cent of the approved expenditure. 
The fund supports expenses related to establishing and managing a marketing demonstration site. 
The loan is given for a 1 year period, while loan repayments are required when the company 
presents profits from its activity.  
To Whom the Subsidy is provided  
 
The subsidy is provided to a group of at least 5 companies with accumulative international sales in 
the total of 2,000,000  US$.  
 
Budget/Expenditure:  (Actual annual disbursements (in thousands US$))  
 
512 2014  
617 2015  
3988 2016  
 
Duration  
Ongoing . 
 
Trade Effects  
 
It is not possible to estimate yet what, if any, trade effects may result from the use of this 
programme.  
 G/SCM/N/284/ISR • G/SCM/N/315/ISR  
 
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  5  EMPLOYMENT GRANT PRO GRAM  
The Authority Responsible for the Subsidy  
 
Israel Investment Center (IIC) at the Ministry of Economy and Industry   
 
Legal basis  
 
Directives of the Director General of the Ministry of Economy and Industry  
 
Policy Objective and/or Purpose  
 
Increase employment in the peripherals areas of Israel as well as within specific populations with 
high rates of unemployment.   
 
To Whom the Subsidy is Provided  
 
Subsidies under this programme are provided to companies establishing or expanding industrial 
plants, telephone call centers, computer service support centers or logistic centers and subject to 
conditions as described above.  In order to be eligible for this programme these companies have to 
employ a minimum number of workers.  
 
Budget/Expenditure:  (Actual annual disbursements (In thousands US$))  
 
2014  31,000  
2015  19,000  
2016  30,000  
 
Duration  
 
Ongoing.   
 
Trade Effects  
 
The programme aids businesses in peripherals areas of the country by the supporting wages to 
employees, therefore, the programme has no trade effects.  
 
6  INVESTMENT INCENTIV ES IN THE LAW FOR TH E ENCOURAGEMENT OF C APITAL  
INVESTMENT  
The Authority Responsible for the Subsidy  
 
Israel Investment Center (IIC) at the Ministry of Economy  and Industry  
 
Legal basis  
 
The Law for the Encouragement of Capital  Investment - 1959.   
 
Policy Objective and/or Purpose  
 
The purpose of this programme is to encourage both local and foreign ca pital investments and 
commercial entrepreneurship particularly innovation and economic activities in disadvantaged 
areas.  
 
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 20%  of the approved capital investment are given to approved enterprises located 
in disadvantaged areas.  
 G/SCM/N/284/ISR • G/SCM/N/315/ISR  
 
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  To Whom the Subsidy is provided  
 
Subsidies under this programme are provided to globally competitive industrial companies.  
 
Budget/Expenditure:  Actual annual disbursements2, (in thousands US$)  
 
2014  397,000  
2015  80,000  
2016  97,000  
 
Duration  
 
Ongoing.   
 
Trade Effects  
 
The specific assistance under this programme is granted to enterprises located in disadvantaged 
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 on  
international trade.  
 
7  INDUSTRIAL GAS INSTA LLATION SYSTEM PRO GRAMME  
The Authority Responsible for the Subsidy  
 
Israel Investment Center (IIC) at the Ministry of Economy  and Industry  
 
Legal basis  
 
Directives of the Director General of the Ministry of Economy and Industry  
 
Policy Objective and/or Purpose  
 
The purpose of the programme is to create conditions for the safe and efficient development and 
use of an Industrial Gas Installation system in accordance with Israeli governmental law and 
policy.  
  
Form of the Subsidy  
 
Grants are given both for the costs  of connection to the Industrial Gas Installation system and for 
conversion to the use of natural gas.  
Factories with annual consumption of  up to 500,000 m3 gas are entitled to a grant of up to 
214,000 US$ and with consumption of  up to 1,000,000 m3 are ent itled to a grant of up to 
114,000US$. Bigger consumers are entitled to a grant of up to 71,000US$.  
 
To Whom the Subsidy is provided  
 
The subsidy can be provided to all natural gas consumers in the country as long as the pay at least 
50 per cent of the cost s of contacting to the Industrial Gas Installation system.   
 
Budget/Expenditure:  (Actual annual disbursements (in thousands US$))  
 
 
2014  4,500  
2015  2,500  
2016  3,100  
 
                                                
2 Not including tax benefits . G/SCM/N/284/ISR • G/SCM/N/315/ISR  
 
- 34 - 
 
  Duration  
 
Ongoing.   
 
Trade Effects  
 
The subsidy is provided mainly to companies in peripheral areas of the country and was designed 
to support small -medium businesses and therefore its effect on trade, if any, is very limited.  
 
8  COST OF LAND DEVELOP MENT  
The Authority Responsible for the Subsidy  
 
The Ministry  of Economy and Industry.  
 
Legal Basis  
 
Directives of the Director General of the Ministry of Economy and Industry  
 
Policy Objective and/or Purpose  
 
Participation in the cost of land development in industrial areas in  the disadvantaged regions in 
accordance with the Law of Encouragement  of Investment Capital as a means of encouraging 
enterprises to locate in those areas.  Land development includes inter alia  dirt work, access roads, 
lights and phone lines . 
 
To Whom the Subsidy is Provided  
 
New enterprises, upon receiving the approval fro m the authority who is responsible for the 
subsidy, establishing their industries in a disadvantaged region in accordance with the Law of 
Encouragement of Investment Capital and the Law of National Priority Areas.   
 
Form of Subsidy  
 
Participation in the cost of land development varies from 40 per cent up to 85  per cent, according 
to several parameters, mainly the distance from the central part of Israel and social -economic 
rating of the municipality.  
 
Budget/Expenditure:  (Actual annual disbursements (in thousands US$))  
 
2014  33,539  
2015  33,446  
2016  36,453  
 
Duration  
 
Ongoing.   
 
Trade Effects  
 
The programme provides for the participation of the Government in the development of basic 
infrastructure (land development), therefore the programme has no trade effects.   
 
9  EILAT FREE TRADE ZON E 
The Authority Responsible for the Subsidy  
 
The Ministry of Finance.   
 
Legal Basis  
 
Eilat Free Trade Zone Law - 1985.  G/SCM/N/284/ISR • G/SCM/N/315/ISR  
 
- 35 - 
 
  Purpose of the programme  
 
The purpose of the programme is to encourage the dev elopment of the city of Eilat, located at 
Israel's most Southern border.  
 
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 ava ilable to Eilat residents and companies, for products consumed 
in Eilat.  
 
Employers receive tax refunds for employees of up to 20 per cent of gross wages paid to 
employees.  
 
To Whom the Subsidy is Provided  
 
The tax concessions are granted to Eilat  residents and companies located in Eilat.  
 
Budget/Expenditure  
 
Data not available.   
 
Trade Effects  
 
All fiscal advantages under this programme are not contingent upon export.  It is not possible to 
estimate what, if any, trade effects may result from the use of this programme.  
 
10  FREE PORT ZONE  
Authority Responsible for the Subsidy  
 
Ministry of Finance and Ministry of Transportation.   
 
Legal Basis  
 
Free Port Zone Law - 1969.   
 
Purpose of the programme  
 
The objective is to promote the development of the port city of Eilat at Israel's most Southern 
border.  
 
To Whom the Subsidy Is Granted  
 
Enterprises located in the Free Port Zone of Eilat.   
 
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 per cent on dividends paid out of the above income with no stipulated time limit;  
  
 
Budget/Expenditure  
 
Data not available.   
 G/SCM/N/284/ISR • G/SCM/N/315/ISR  
 
- 36 - 
 
  Trade Effects  
 
Fiscal advantages under this programme are not contingent upon export.  It is not possible to 
estimate what, if any, trade effects may result from the use of this programme.  
 
 
__________