G/SCM/N/220/ISR/Suppl.1  
G/SCM/N/253/ISR  
 
25 September 2014  
(14-5375)  Page: 1/24  
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 22 September 2014, is being circulated at the request of the 
Delegation of Israel. 
 
_______________ 
 
Contents 
1   INTROD UCTION  .......................................................................................................... 2  
2   RESEARCH AN D DEVELOPMENT ................................................................................... 2  
2.1   Research and Development Fund ................................................................................. 2  
2.2   Long Term R&D Support for La rge Investors in In dustrial R&D ......................................... 3  
2.3   Magnet Programmes .................................................................................................. 4  
2.4   The Incubato rs Programme ......................................................................................... 6  
2.5   Tnufa ....................................................................................................................... 7  
2.6   Support for Research Institutions ................................................................................. 8  
2.7   Project Center for Multinational Companies ................................................................... 9  
3   AID TO SMALL AND MEDIUM-SIZED COMPANIES BY THE SMALL AND MEDIUM 
BUSINESS AGENCY ......................................................................................................... 10  
3.1   Small and Medi um Business Agency ............................................................................ 10 
4   SUPPORT FOR EMPLOYM ENT AND TRAINING ............................................................ 11  
4.1   Training Co urses for Adults ........................................................................................ 11 
4.2   On the Job Training .................................................................................................. 12 
4.3   Vouchers  programme ................................................................................................ 12 
4.4   A Grant to Newly Released Sold iers who work in High Demand Jobs ................................. 13 
5   OTHER FORMS OF SUBSIDIES ................................................................................... 14  
5.1   Design Pr oduct Prog ramme ........................................................................................ 14 
5.2   New Media Support  Programme (pilot) ........................................................................ 14 
5.3   Marketing Tu torial Pr ogram ........................................................................................ 15 
5.4   Consor tia Prog ram .................................................................................................... 16 
5.5   Internationa l Projects Fund ........................................................................................ 17 G/SCM/N/220/ISR/Suppl.1 • G/SCM/N/253/ISR 
 
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  5.6   "200 X 2" – "Two  Hundred Ti mes Tw o" ........................................................................ 17 
5.7   India/China Fund ...................................................................................................... 18 
5.8   Employment  Grant Pr ogram ....................................................................................... 19 
5.9   Investment Incentives in the Law fo r the Encouragement of Capital Investment ................ 19 
5.10   Greenhouse Gas Emissi ons reduction programme ........................................................ 20 
5.11   Industrial Gas Instal lation System  programme ............................................................ 21 
5.12   Cost of La nd Development ....................................................................................... 22 
5.13   Eilat Fr ee Trade Zone .............................................................................................. 22 
5.14   Free Po rt Zone ....................................................................................................... 23 
 
 
1  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 2013. This notification combines Israel's new and 
full notifications of  2010 through 2013. 
 A considerable effort has been undertaken by the Government of the State of Israel to submit 
comprehensive notifications in accordance with th e requirements of the Subsidies Agreement. The 
notification follows, 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 na ture of the measure itself. Furthermore, this 
does not implies in any way, that any of the measures notified, wholly or partly, amounts to a 
specific subsidy.  
2  RESEARCH AND DEVELOPMENT 
2.1  Research and Development Fund The Authority Responsible for the Subsidy 
 
The Office of the Chief Scientist at the Ministry of Economy.   
 Legal Basis 
 The Law for the Encouragement of Industrial Research and Development, 5744-1984.    
Policy Objective and/or Purpose 
 
The purpose of the Law is to encourage and support  industrial research and development in order 
to foster the development of technology-oriented industry in Israel and to create employment 
opportunities for Israel's scientific and technological workforce.   
 Form of the subsidy 
 Grants are from 20 per cent to 50 per cent of total approved R&D expenditures.  
Grants shall be repaid in the form of royalties as a percentage of the total revenues derived from 
the sale of the product developed up to the enti re amount of the grant in US$ terms, with the 
addition of yearly interest equal to the Libor rate.  G/SCM/N/220/ISR/Suppl.1 • G/SCM/N/253/ISR 
 
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  To Whom the Subsidy is Provided 
 
The support is provided to projects of research and development in all sectors, provided they are 
aimed at the discovery of new knowledge for the development of new products or processes or for 
the substantial improvement of existing products or processes. 
 Duration 
 Ongoing.    Budget/expenditure 
 Actual Annual Disbursement (in thousands US$).  
2010 283,000 
2011 248,300 
2012 284,000 
2013 269,000 
 
Trade Effects 
 
The products or processes financed by the programme are innovative and cannot therefore 
compete with existing products. Further work is required 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.
 
 
2.2  Long Term R&D Support for Large Investors in Industrial R&D 
The Authority Responsible for the Subsidy 
 
The Office of the Chief Scientis t at the Ministry of Economy. 
 
Legal Basis 
 
The Law for the Encouragement of Industrial Research and Development, 5744-1984.   
 
Policy Objective and/or Purpose 
 
The purpose of this programme, operating since 22 August 2001, is to encourage and support 
substantial investments in long-term industrial research and development.   Form of the Subsidy 
 Grants are from 20 per cent to 50 per cent of total approved R&D expenditures.    
To Whom the subsidy is provided 
 
The support is provided to companies in all sectors engaging substantial amount of resources 
in R&D. To be eligible, the company must comply with the following criteria:   
 
 Employs over 200 R&D employees or has an  annual R&D budget exceeding US$20 million; 
 Its yearly revenues exceed US$ 100 million;  
 
 Has repaid all royalties due to the Office of the Chief Scientist for support received under 
the Law for the Encouragement of Industrial Research and Development; 
 Does not currently receive any support under the Law for the Encouragement of Industrial 
Research and Development; 
 The request for support does not exceed 20 per cent of its yearly R&D budget; 
 The support is requested for long-term R&D project. 
 G/SCM/N/220/ISR/Suppl.1 • G/SCM/N/253/ISR 
 
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  Budget/Expenditure 
 
Actual Annual Disbursement (in thousands US$).  
2010 20,360 
2011 17,900 
2012 14,300 
2013 16,350 
 
Duration 
 Ongoing.    
Trade Effects 
 
The programme finances long-term generic research and development expenditures; due to the 
scope and nature of the assistance, it has no direct impact on trade.   
 
2.3  Magnet Programmes  
The Authority Responsible for the Subsidy 
 
The Office of the Chief Scientis t at the Ministry of Economy. 
 Legal Basis 
 
The Law for the Encouragement of Industrial Research and Development, 5744-1984.   
 Policy Objective and/or Purpose 
 The general purpose of these programmes is to en courage the development of innovative generic 
technologies through cooperation between academic research institutes and industry. To this end, 
three different routes have been established: 
  3.1 – Magnet Consortia  (the Central Programme), operating since 1994 
 3.2 – Mini-Magnet (Magneton) , established on 22 August 2001 
 3.3 – NOFAR , established on 1 June 2004 
 Policy Objective and/or Purpose 
 The purpose of the subsidy is to encourage th e long-term development of innovative generic 
technologies which have wide ranging applications in numerous industries. 
 
To qualify as a Magnet R & D programme, the pr oject must satisfy the following criteria:   
 
 The technology to be developed is crucial to maintain the competitiveness of companies; 
 The technology cannot be acquired from commercial sources at competitive prices and 
delivery schedules; 
 The potential sales are sufficient to economically justify the R & D investments and the 
costs of development, manufacturing and market ing of products resulting from the R & D; 
 At least three of the participating companies and at least one academic institution have 
formed and registered a consortium and signed a collaborative agreement. 
 
Form of the Subsidy 
 Grants calculated as 66 per cent of the approved R&D expenses. Academic research institutes 
participating in the consortium are entitled to a grant of up to 80 per cent of their approved 
budgets, the remaining 20 per cent to be financed by the industries participating in the consortium. Since the budget of the academic research institute may not exceed 25 per cent of the 
total programme, the maximum overall rate of support to the consortium is approximately G/SCM/N/220/ISR/Suppl.1 • G/SCM/N/253/ISR 
 
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  70 per cent, while the effective rate of support to the participating companies is approximately 
60 per cent.    To whom the Subsidy is Provided 
 The subsidy is provided to a consortium of manufacturers and academic institutions.    
 3.2 – Mini Magnet (Magneton) 
 Policy Objective and/or Purpose 
 
The purpose of the subsidy is to encourage the tr ansfer of technologies from academic research 
institutes to Industry, based on a dual cooperation between an academic research group and an industrial company. 
 
Form of the Subsidy 
 
Grants calculated as 66 per cent of the approved R&D expenses, which may not exceed 
NIS 3,400,000, for a period of up to 2 years of activity, while the industry finances all the complementary costs.   
To whom the Subsidy is Provided 
 
The subsidy is provided to a dual cooperation between an industrial company and an academic 
research institute.   
  3.3 – NOFAR  
 
Policy Objective and/or Purpose 
 The purpose of the subsidy is to encourage a pplied research activities in biotechnology 
implemented by scientific research institutes through their own staff, in order to direct them to 
industrial needs.  
Form of the Subsidy 
 
Grant up to 90 per cent of the approved R&D budg et of the research institute and not more than 
NIS 420,000, for a period of up to 15 months. The complementary expenses up to 100 per cent of 
the total cost, shall be financed by an industrial company, which must be capable of contributing in the direction of the R&D program. The company, ho wever, has no rights on the outcome of this 
research. 
 
To Whom the Subsidy is Provided 
 
The subsidy is provided only to research institutes.   
 Budget/Expenditure for all Magnet programmes 
 Actual Annual Disbursements (in thousands US$). 
 
2010 56,700 
2011 63,600 
2012 58,700 
2013 65,700 
Duration 
 
Ongoing.   
 G/SCM/N/220/ISR/Suppl.1 • G/SCM/N/253/ISR 
 
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  Trade Effects 
 
Since the Magnet programmes are aimed at expandin g the technological infrastructure, they have 
no effect on trade. Furthermore, the results are shared among partners. One of the main benefits 
lies in strengthening cooperation between industry and research institutes. 
 Other Information 
 The subsidy is provided annually during the project' s approved duration and it is up to 66 per cent 
of the approved budget to industrial companies, while the participating research institute is assured full coverage for its R&D expenses, by means of grants and complementary financing by 
participating industrial company. 
 
 
2.4  The Incubators Programme 
The Authority Responsible for the Subsidy 
 
The Office of the Chief Scientis t at the Ministry of Economy. 
 
Legal Basis 
 Directives of the Director General of the Ministry of Economy. 
 
Policy Objective and/or Purpose 
 
The purpose of the programme is to promote an d support the creation of start-up companies 
based on innovative new products and technologies, initiated by individuals (not by existing companies). 
 
 4.1 - Technological Incubators 
 
Under the incubator programme, a grant is given for a period of two years for the R&D expenses. The grant constitutes 85 per cent of the approv ed R&D budget, with a maximum of NIS 2,100,000 
per two years. If the project is successful, the gr ant must be fully repaid to the Government of 
Israel.   
To Whom the Subsidy is Provided 
 
The subsidy is provided to individuals: scientists, inventors, beginning entrepreneurs, presenting an innovative technological idea, with marketing potential, which still need two years R&D. The 
projects responding to these specified criter ia are selected by the Incubators programme 
management and approved by a committee formed by the Chief Scientist.  
 4.2 - Technology based industrial incubators 
 Form of the Subsidy 
 Under the incubator programme, a grant is given for a period of two years for the R&D expenses. The grant constitutes 50 per cent (or 66 per cent for incubator in preference areas) of the approved R&D budget, with a maximum of NIS 2,000,000 per two years. If the project is 
successful, the grant must be fully repaid to the Government of Israel. 
 To Whom the Subsidy is Provided 
 The subsidies in this programme, initiated in 2007, are provided to less innovative projects that are not appropriate as technological incubators but, with early support and guidance in 
manufacturing and commercialization, still have potential to become successful businesses.   
 
 4.3 - Biotechnology designed incubators 
 G/SCM/N/220/ISR/Suppl.1 • G/SCM/N/253/ISR 
 
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  Form of the Subsidy 
 
Under the incubator programme, a grant is given for a period of three years for the R&D expenses. The grant constitutes 85 per cent of the approved R&D budget in the first year with a maximum of 
NIS 2,295,000, 80 per cent in the second year with a maximum of NIS 2,160,000 and 75 per cent 
in the third year with a maximum of NIS 2,025,000.   
To Whom the Subsidy is Provided 
 
The subsidies in this programme, initiated in 2005, is provided to bio-tech projects.   
 
Budget/Expenditure for all Incubators programmes  
 
Actual Annual Disbursements (in thousands US$). 
 
2010 44,200 
2011 43,700 
2012 47,800 
2013 39,600 
 
Duration 
 Ongoing.    
Trade effects 
 
In light of the scope and nature of the R&D activity being assisted, it is unlikely that trade effects 
may ever result from this programme.   
 Other Information 
 
This programme has proved itself as one of the mo st efficient and productive leverage for private 
investment in start-ups creating employment opportunities for scientists.    
2.5  Tnufa 
The Authority Responsible for the Subsidy 
 
The Office of the Chief Scientis t at the Ministry of Economy. 
 Legal Basis 
 
Directives of the Director General of the Ministry of Economy. 
 Policy Objective and/or Purpose 
 The purpose of the programme, initiated in August 2001, is to encourage and support technological entrepreneurs at the pre-seed stage, during the earliest stages of their projects, to 
help them in the evaluation of the technological and economic potential of the idea, preparation of 
a patent proposal for submission to patent authorities, construction of a prototype, and preparation of a business plan.  
Form of the Subsidy 
 
Grants of up to 85 per cent of approved expenses up to a maximum of NIS 210,000.   
 
To Whom the Subsidy is Provided 
 
The subsidy is provided to entrepreneurs presenting a plan to promote a new innovative 
technological idea.    G/SCM/N/220/ISR/Suppl.1 • G/SCM/N/253/ISR 
 
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  Budget/Expenditure 
 
Actual annual disbursements (in thousands US$). 
 
2010 4,560 
2011 4,750 
2012 4,410 
2013 4,710 
 
Duration 
 
Ongoing.   
 
Trade Effects 
 In light of the scope and nature of the R&D activity being assisted, it is unlikely that trade effects 
may ever result from this programme. 
 2.6  Support for Research Institutions 
The Authority Responsible for the Subsidy 
 
The Office of the Chief Scientis t at the Ministry of Economy. 
 
Legal Basis 
 Directives of the Director General of the Ministry of Economy. 
 
Policy Objective and/or Purpose 
 
This programme, initiated in 2004, is designed for research institutions with clear linkage to the 
industry, to strengthen their technology infrastructure in order to develop technologies and products which are relevant for industry but cannot be fully developed by industry.   
 
Form of the Subsidy 
 Grants of up to 90 per cent of a pproved expenses are available.   
 
To Whom the Subsidy is Provided 
 
The subsidy is provided to any research institute that is an independent legal entity, employs a 
team of researchers with proven scientific and technological ability, maintains equipment for 
conducting and testing R&D in industry and obtains at least 30 per cent of its revenue from 
research and testing for industry. 
 Budget/Expenditure 
 
Actual annual disbursements (in thousands US$).  
 
2010 3,970 
2011 4,140 
2012 3,840 
2013 4,100 
Duration 
 
Ongoing.    G/SCM/N/220/ISR/Suppl.1 • G/SCM/N/253/ISR 
 
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  Trade Effects 
 
Since the programme is aimed at expanding R&D activities of research institutes, it has no effect on trade.   
 
2.7  Project Center for Multinational Companies 
The Authority Responsible for the Subsidy 
 
The Office of the Chief Scientis t at the Ministry of Economy. 
 Legal Basis 
 Directives of the Director General of the Ministry of Economy.  
Policy Objective and/or Purpose 
 
This programme, initiated in 2008, is intended to encourage multi-national companies to conduct 
joint R&D programs with Israeli partners (company or academic institute) to form project centers, 
while focusing the activity in the national pref erence areas and/or in traditional industry.   
 Form of the Subsidy 
 Government financing will be the lowest of the following:    
 40 per cent of the project center's operating expenses;   
 50 per cent of the accumulated investment funding given to the Israeli partner in the 
project;   
 accumulated investment funding given to the Israeli partner in national preference areas 
or;   
 from traditional industry. 
 
To Whom the Subsidy is Provided 
 
The subsidy is provided to a company that complies with all the following conditions: 
 
 The overall turnover of the company exceeds US$ 2.5 billion in the calendar year prior to 
the submission of the application;   
 An industrial company in the traditional or mixed industry sectors.   
 Budget/Expenditure 
 
Actual annual disbursements (in thousands US$) 
 
2010 1,045 
2011 1,313 
2012 2,385 
2013 2,964 
Duration 
 
Ongoing.    
Trade Effects 
 
Since the programme is aimed at expanding R&D activities of research institutes with foreign 
partners, it has no effect on trade.   
 G/SCM/N/220/ISR/Suppl.1 • G/SCM/N/253/ISR 
 
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  3  AID TO SMALL AND MEDIUM-SIZED COMPANIES BY THE SMALL AND  MEDIUM 
BUSINESS AGENCY 
3.1  Small and Medium Business Agency The Authority Responsible for the Subsidy 
 
Small and Medium Business Agency.  
 
Legal Basis 
 
Government decision.    
Policy Objective and/or Purpose 
 
The purpose of the programme is to aid owners and entrepreneurs of small businesses in 
establishing, 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 thousands 
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 initiate s the establishment of SBCDs (Small Business 
Development Centres) and supports them by prov iding professional guidance and assistance. 
These centres are meant to serve as a central address for small businesses owners and entrepreneurs planning new businesses. They are designed as "one-stop shop" which respond to a 
variety of this group's business management needs.  
 
 To Whom the Subsidy is Provided 
 
Small and Medium Enterprises with emphasis to di sadvantage populations. Loans with government 
guarantee are provided to small firms with up to  100 employees and an annual turnover of up to 
28,570 thousands US$. 
 
Budget/Expenditure 
 Actual Annual Government Expenditure of Israel Small and Medium Business agency (in 
thousands of US$). 
 SBCD: 
 
2010 3,381 
2011 10,468 
2012 12,858 
2013 11,524 
 
State loan guarantee : 142,857 thousands US$ for the years 2012-2016. 
Duration 
 
Ongoing.   
 
Trade Effects 
 
In light of the scope and nature of the assistance, it is unlikely that trade effects may result from 
this programme.    G/SCM/N/220/ISR/Suppl.1 • G/SCM/N/253/ISR 
 
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  Other Information 
 
The agency was established in 1994, following a recommendation by the Public Committee to encourage small and medium businesses.  
 
4  SUPPORT FOR EMPLOYMENT AND TRAINING 
4.1  Training Courses for Adults 
The Authority Responsible for the Subsidy 
 
Division of Training and Development of Human Resources, Ministry of Economy.  
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.    
Form of the Subsidy 
 
Courses and Workshops are financed by the Ministry of Economy.   
 
To Whom the Subsidy is Provided 
 
Daytime 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.    
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$). 
 
2010 12,504 
2011 16,517 
2012 10,797 
2013 8,371 
 
Duration  
 
Ongoing.   
 
Trade effects  
 It is unlikely that trade effects may result from the use of this programme.
 
 
Other information  
 
The amount of subsidy has been constantly decreasing since 2011.  G/SCM/N/220/ISR/Suppl.1 • G/SCM/N/253/ISR 
 
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  4.2  On the Job Training  
The Authority Responsible for the Subsidy 
 
Division of Training and Development of Human Resources, Ministry of Economy. 
 
Legal Basis 
 
Directives of the Director General of the Ministry of Economy.   
 Policy Objective and/or Purpose 
 
The purpose of the programme is to encourage employers to hire 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 employee'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 Di vision of Training and Development of Human 
Resources.    
Subsidy per Employee 
 
Actual monthly disbursements (in US$). 
 
2010 281 
2011 523 
2012 535 
2013 576 
 
Duration 
 Ongoing.    
Trade Effects 
 
It unlikely that trade effects may result  from the use of 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.    
4.3  Vouchers programme 
The Authority Responsible for the Subsidy 
 
Division of Training and Development of Human Resources, Ministry of Economy. 
Legal Basis 
 
Directives of the Director General of the Ministry of Economy.   
 
Policy Objective and/or Purpose 
 
The purpose of the programme is to encourage un employed, job-seekers among special groups in 
the population to acquire vocational training and participate in the Labour market. G/SCM/N/220/ISR/Suppl.1 • G/SCM/N/253/ISR 
 
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  Form of the Subsidy 
 
Vouchers given by the Division of Training and Development of Human Resources. In the Ministry of Economy. Each voucher is 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 monthly disbursements (in thousands US$) 
 
2013 2,600 
 
Duration 
 
Ongoing.   
 Trade Effects 
 No trade effects may result from the use of this programme.  
4.4  A Grant to Newly Released 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 ra ther 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, agriculture, construction and tourism. 
 
Form of the Subsidy 
 
Grant. 
 Subsidy per Employee 
 
Expenditure: actual annual disbursements (in US$). 
 
2,480 2010 
2,358 2011 
2,475 2012 
2,700 2013 
 
Duration 
 Ongoing.    G/SCM/N/220/ISR/Suppl.1 • G/SCM/N/253/ISR 
 
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  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 only if he/she commences working not later than 
twelve months after his/her completion of compulsory military service. 
 5  OTHER FORMS OF SUBSIDIES 
5.1  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. 
 Policy Objective and/or Purpose 
 The purpose of the programme is to increase awaren ess 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 employ ing 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$)) 
 
2012 571 
 
Duration 
 
Terminated in 2012. 
 Trade Effects 
 In light of the scope and nature of the assistance , there are no trade effects that may result from 
this programme.   
5.2  New Media Support Programme (pilot) 
The Authority Responsible for the Subsidy 
 
Small and Medium Business Agency. 
 G/SCM/N/220/ISR/Suppl.1 • G/SCM/N/253/ISR 
 
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  Legal Basis 
 
Directives of the Director General of the Ministry of Economy.  
Policy Objective and/or Purpose 
 
The programme is aimed to promote the Digital Medi a industry (Television, Cinema, New Media) in 
general and to encourage creative production specifically. 
 Form of the Subsidy 
 
For New Media; grants amounting to up to 75 per cent of approved expenses and up to a ceiling of 
57,000 US$, For Television and Cinema films up to a ceiling of 171,000 US$.  
To Whom the Subsidy is provided 
 
The subsidy is provided to companies employing up  to 100 employees with turnover not exceeding 
28,500 thousands US$. The company has to demonstrate high economic potential and to operate 
in Haifa and the surrounding.    Budget/Expenditure: (actual annual disbursements (in thousands US$)) 
 
2012 1,340 
 
Duration 
 
Terminated in 2013. 
 
Trade Effects 
 In light of the scope and nature of the assistance, no trade effects may result from this 
programme.   
 5.3  Marketing Tutorial Program 
The Authority Responsible for the Subsidy 
 
Small and Medium Business Agency.  
 Legal basis 
 Directives of the Director General of the Ministry of Economy. 
 
Policy Objective and/or Purpose 
 
The purpose of the programme is to encourage businesses to adopt advanced marketing 
strategies, to use advanced marketing tools, to assist them in building a marketing infrastructure and provide necessary marketing training.   
 
Form of the Subsidy 
 The program started in 2004. The subsidy is in th e form of a grant amounting to 50 per cent of 
marketing tutorial fees, up to a ceiling of 200 hours.  
 To Whom the Subsidy is Provided 
 The subsidy amounts up to 575 thousands US$ and is granted to businesses which need tutorial 
assistance for building a marketing infrastructure.   
 G/SCM/N/220/ISR/Suppl.1 • G/SCM/N/253/ISR 
 
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  Budget/Expenditure: (Actual annual disbursements (in thousands US$)) 
 
2010 7,017 
2011 9,316 
2012 18,467 
2013 8,284 
Duration 
 
Terminated in 2013.   
 
Trade Effects  
 
Due to the small amounts granted, it was not possibl e to confirm the existence of a direct relation 
between the granting of this ai d and the trend in export.   
 5.4  Consortia Program 
The Authority Responsible for the Subsidy 
 
Small and Medium Business Agency.  
 Legal basis 
 
Directives of the Director General of the Ministry of Economy. 
 Policy Objective and/or Purpose 
 
Reducing the risks of small-volume exporters by pooling their marketing activities abroad.   
 Form of the Subsidy 
 The program started in 2005. The subsidy is in th e form of conditional grant amounting to 50 per 
cent of pre-approved expenditures. A consortium is comprised of a minimum of 5 companies and 
each year the consortium's business plan as well as a request for the same year expenses is 
submitted to the committee supervising the program. The lifespan of each consortium is up to 36 months.  
Royalties are required to be paid by companies participating in the program.   
 To Whom the Subsidy is Provided 
 The subsidy is provided to companies of all sectors with a revenue not exceeding 30 million US$. Each consortium is subject to the approval of committee supervising the program and must 
operate in certain designated area.  
 Budget/Expenditure: ( Estimated  actual annual disbursements (in thousands US$)) 
 
2,818 2010 
9,160 2011 
18,752 2012 
8,355 2013 
Duration 
 
Terminated in 2013.    
Trade Effects 
 
It was not possible to confirm the existence of a di rect relation between the granting of this aid 
and the trend in export.   
 G/SCM/N/220/ISR/Suppl.1 • G/SCM/N/253/ISR 
 
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  5.5  International Projects Fund 
The Authority Responsible for the Subsidy 
 
Foreign Trade Administration, Ministry of Economy. 
 
Legal basis 
 
Directives of the Director General of the Ministry of Economy. 
 Policy Objective and/or Purpose 
 
The Fund's goal is to encourage Israeli companie s to apply for tenders or projects abroad, by 
sharing the financial risk. The way to achieve the go al 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 materials. The loan is 
given per project. 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 is at least 2 million USD and fo r background survey, at least 500 thousand USD.  
 
Budget/Expenditure: (Actual annual disbursements (in thousands US$)) 
 
2012 1,105 
2013 1,568 
 
Duration 
 
On going. 
 Trade Effects 
In light of the scope and nature of the assistance, no trade effects may result from this programme.   
 
5.6  "200 X 2" – "Two Hundred Times Two" 
The Authority Responsible for the Subsidy 
 
Foreign Trade Administration, Ministry of Economy.  
 Legal basis 
 
Directives of the Director General of the Ministry of Economy.  
 Policy Objective and/or Purpose 
 The purpose of the programme was to encourage exporters to adopt advanced marketing strategies, to use advanced marketing tools, to assist them in building a marketing plan and provide the necessary training.   
 G/SCM/N/220/ISR/Suppl.1 • G/SCM/N/253/ISR 
 
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  Form of the Subsidy 
 
The program started in 2008. The subsidy was in the form of grant amounting up to 60-75 per cent of the approved infrastructural mark eting expenditure and up to a ceiling of each 
section in accordance with the dedicated business plan. Infrastructural marketing expenditures 
refer to marketing activities which do not include current expenditure linked to the export activity 
nor to the volume of goods exported but rather support for participating in trade fairs and 
professional seminars, market studies and consultancy for the preparation of business plans, 
preparation of catalogues and marketing training.   A strategic dedicated marketing plan is developed for each company. Each company is 
accompanied by a program manager.   
 To Whom the Subsidy is Provided 
 The subsidy is provided only to companies in peripheries areas of the country, in all sectors, intending to build and/or strengthen their marketing infrastructure abroad.  
 
Budget/Expenditure: (Actual annual disbursements (in thousands US$)) 
 
3,578 2009-2010 
1,406 2011 
1,873 2012 
1,424 2013 
 
Duration 
 Terminated in 2013.  
Trade Effects 
 
Considering its limited application, low budget and limited economic effect, this programme has 
negligible, if any, effect on trade.  
 
5.7  India/China Fund 
The Authority Responsible for the Subsidy 
 
Foreign Trade Administration, Ministry of Economy.  
 
Legal basis 
 
Directives of the Director General of the Ministry of Economy.   
 
Policy Objective and/or Purpose 
 The Ministry of economy has been looking at the growing India and China markets as two its 
target markets. Therefore, the purpose of the fund is to increase the trade activity with these two 
countries by supporting Israeli companies in establishing marketing offices.
 
 
Form of the Subsidy 
 
The program has started in 2012. The subsidy is in the form of loan amounting up to 50 per cent 
of the approved expenditure. The fund support s expenses of marketing consultant, office 
establishment and management, and local worker. The loan is given for a 3 year period. Loan repayments are required only when the co mpany presents 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 or China, with at least 35% Israeli added value.  G/SCM/N/220/ISR/Suppl.1 • G/SCM/N/253/ISR 
 
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  Budget/Expenditure: (Actual annual disbursements (in thousands US$)) 
 
459.5 2012 
2,285 2013 
 
Duration 
 Ongoing.  
Trade Effects 
 
Due to its small amount, it is unlikely that trade effects may result from the use of this 
programme.  
 5.8  Employment Grant Program 
The Authority Responsible for the Subsidy 
 
Israel Investment Center (IIC) at the Ministry of Economy. 
 
Legal basis 
 
Directives of the Director General of the Ministry of Economy. 
 
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 su pport centers or logistic centers and subject to 
conditions as described above. In order to be eligible for this program these companies have to 
employ a minimum number of workers.  Budget/Expenditure:  (Actual annual disbursements (In thousands US$)) 
 
2010 51,003 
2011 74,850 
2012 17,412 
2013 22,760 
 
Duration 
 
Ongoing.    
Trade Effects 
 
The programme aids businesses in peripherals ar eas of the country by the supporting wages to 
employees, therefore, the programme has no trade effects. 
 5.9  Investment Incentives in the Law fo r the Encouragement of Capital Investment 
The Authority Responsible for the Subsidy 
 
Israel Investment Center (IIC) at the Ministry of Economy. 
 G/SCM/N/220/ISR/Suppl.1 • G/SCM/N/253/ISR 
 
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  Legal basis 
 
The Law for the Encouragement of Capital Investment - 1959.  
Policy Objective and/or Purpose 
 
The purpose of this program is to encourage both local and foreign capital 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 24 per cent of the approved capital investment are given to approved enterprises 
located in disadvantaged areas.  
To Whom the Subsidy is provided 
 
Subsidies under this programme are provided to globally competitive industrial companies, as well as companies in tourism and real estate sectors. 
 
Budget/Expenditure: (Actual annual disbursements (in thousands US$)) 
 
2010 126,074 
2011 178,479 
2012 99,637 
2013 204,477 
 
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 in international trade. 
 
5.10  Greenhouse Gas Emissi ons reduction programme 
The Authority Responsible for the Subsidy 
 
Israel Investment Center (IIC ) at the Ministry of Economy.  
 
Legal basis 
 
Directives of the Director General of the Ministry of Economy.  
Policy Objective and/or Purpose 
 
The main objective is to achieve a reduction of  20% by 2020 of electricity production from 
polluting resources. 
 Form of the Subsidy 
 Eligible projects will receive a subsidy of up to 8 million shekels or up to 20% of the total investment, provided the project will deliver qu antified reductions in greenhouse gas emissions G/SCM/N/220/ISR/Suppl.1 • G/SCM/N/253/ISR 
 
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  until at least 2020. An additional assistance of up to 20% of the total investment will be given to 
approved projects that are based on technologies developed by Israeli companies and commercially installed for the first time.  
To Whom the Subsidy is provided 
 
Subsidies under this programme are provided to all sectors including; industry, tourism, 
commerce, services, agriculture and the municipal and public sector. 
 Budget/Expenditure: (Actual annual disbursements (in thousands US$)) 
 
2012 1,339 
2013 1,664 
 
Duration 
 Terminated in 2013.  
Trade Effects 
 
In light of the scope and nature of the assistance, it is possible to determine that there are no 
trade effects that may result  from this programme.   
 5.11  Industrial Gas Installation System programme  
The Authority Responsible for the Subsidy 
 
Israel Investment Center (IIC) at the Ministry of Economy. 
 
Legal basis 
 
Directives of the Director General of the Ministry of Economy. 
 
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 m
3 gas are entitled to a grant of up to 
214 thousands US$ and with consumption of up to 1,000,000 m3 are entitled to a grant of up to 
114 thousands US$. Bigger consumers are entitled to a grant of up to 71 thousands US$. 
 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 costs of contacting to the Industrial Gas Installation system.  
 
 Budget/Expenditure: (Actual annual disbursements (in thousands US$)) 
 
2013 288 
 
Duration 
 
Ongoing.    G/SCM/N/220/ISR/Suppl.1 • G/SCM/N/253/ISR 
 
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  Trade Effects 
 
The subsidy is provided mainly to companies in peripheral areas of the country and was designed to support small-medium businesses, due to the sc ope and nature of the assistance, it is unlikely 
that trade effects may result from the use of this programme. 
 5.12  Cost of Land Development 
The Authority Responsible for the Subsidy 
 
The Ministry  of Economy. 
 
Legal Basis 
 
Directives of the Director General of the Ministry of Economy. 
 
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 from 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$)) 
 
2010 25,641 
2011 25,386 
2012 30,270 
2013 57,332 
 
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.   
5.13  Eilat Free Trade Zone 
The Authority Responsible for the Subsidy 
 
The Ministry of Finance.   
 Legal Basis 
 Eilat Free Trade Zone Law - 1985.  G/SCM/N/220/ISR/Suppl.1 • G/SCM/N/253/ISR 
 
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  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. 
 
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 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 unlikely that 
trade effects may result from the use of this programme. 
 5.14  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 10% in 2011-
2012 and 7% in 2014-2014; 
(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/220/ISR/Suppl.1 • G/SCM/N/253/ISR 
 
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  Trade Effects 
 
Fiscal advantages under this programme are not contingent upon export. It is unlikely that trade effects may result from the use of this programme.   
 
  
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