(photo credit: Ariel Jerozolimski)
The Knesset Finance Committee on Tuesday approved a government
incentive program to encourage large companies to establish research
and development centers in the periphery and create new jobs.
aim of the new program is to create hi-tech jobs in the periphery,” Eli
Opper, chief scientist at the Industry, Trade and Labor Ministry, said
Tuesday. “We believe that the support of Israeli hi-tech companies will
enable them to compete with the low salaries paid to R&D workers in
countries in the Far East. As a result, they will prefer to transfer
their R&D activities to the periphery in Israel rather than to
countries in East Asia and Eastern Europe.”
The new incentive
program will be operated through the Chief Scientist’s Office at the
Industry, Trade and Labor Ministry, which is responsible for
implementing the government’s policy of encouraging and supporting
industrial research and development in Israel through the Law for the
Encouragement of Industrial Research and Development.
program is part of an assistance plan signed between the Finance
Ministry and the Industry, Trade and Labor Ministry last July for the
establishment of R&D centers in the periphery and the hiring of new
“The new program will serve as a tool for the
encouragement of innovative R&D in Israel and help narrow gaps
between the periphery and the center of the country, as well as in
education and salary levels,” Finance Minister Yuval Steinitz said
The establishment of R&D centers in the periphery
by large companies is expected to boost economic activity in the areas
surrounding them, Industry, Trade and Labor Minister Binyamin
Ben-Eliezer said Tuesday.
The new program will be operated to
assist projects of large companies for a period of three years. Grants
will be offered at a rate of 65 percent to 75% of the approved budget
of the project. The Chief Scientist’s Office budget for the subsidy of
R&D centers by large companies in the periphery will be limited to
NIS 100 million. In addition, large companies that win a grant will
need to pay 3% in royalty payments calculated as a percentage of the
revenues derived from the project, and smaller companies will have to
pay 1.3% in royalty payments.
JPOST VIDEOS THAT MIGHT INTEREST YOU:
When a government-assisted R&D
project results in a commercially successful product, the developers
are obligated to pay royalties. The royalties received will, in turn,
be used to fund future grants to encourage and support industrial
Companies that generate more than $100m. in revenues from sales in
Israel in the year prior to their application will be eligible for the
Under the terms of the incentive program, more than 50% of the production of the project will be manufactured in Israel.
the first year of the assistance program, companies that win a grant
will need to hire at least 40% of workers living in the periphery, in
the second year at least 50% and in the third year at least 60%.
Join Jerusalem Post Premium Plus now for just $5 and upgrade your experience with an ads-free website and exclusive content. Click here>>