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Press Release - A new incentive plan will enable companies in the periphery to receive an R&D grant as well as tax benefits

For the first time, the Investment and Industrial Cooperation Authority joins the Innovation Authority to solve the issue of startup's growth to reach manufacturing stage, and announce a new capital investment framework for the periphery.

The Investment Authority at the Ministry of Economy and Industry and the Israel Innovation Authority team up to launch a new framework for the periphery:

A new incentive plan will enable companies in the periphery to receive an R&D grant as well as tax benefits

For the first time, the Investment and Industrial Cooperation Authority joins the Innovation Authority to solve the issue of startup's growth to reach manufacturing stage, and announce a new capital investment framework for the periphery.

The aim of this framework is to create a continuum between the R&D stage and the manufacturing stage of startups and other companies in the fields of renewed energy, nanotechnology, biotechnology, and IOT. The framework is designed for companies, entrepreneurs and investors in the above-mentioned fields who are located at the periphery or plan to move to the periphery. In such event, they will be eligible for a grant of 20%-30% of the approved investment capital, along with a tax benefit of 7.5% as outlined in the Law for the Encouragement of Capital Investment.

Minister of Economy and Industry, Eli Cohen: "Establishing plants and companies along with the promotion of industry and employment all over the country, and in the periphery in particular, is a top priority for the Ministry of Economy and Industry. The Ministry provides the grants given by the Investment Authority and is working to create quality employment and increase production by creating high quality positions and promoting the industry and the economy."

The natural progression from startup and companies who reached R&D maturity to full production is vital for the Israeli economy. This progression will negate the need to perform exits to international companies for a significantly lower sum than their actual potential as a manufacturing company, or alternatively, refrain from putting the accumulated knowhow to use.

For this purpose, the Investment and Industrial Cooperation Authority at the Ministry of Economy and Industry and the Israel Innovation Authority came up with a new framework that enables companies to receive assistance in capital investments so that they can establish advanced manufacturing plants in one of the following fields: renewable energy, nanotechnology, biotechnology and IOT. In the future, there may be support for additional fields of expertise. The Innovation Authority will provide funding for the development and the Investment Authority will provide the funding to establish the plants.

The new framework is designed for companies who recently developed a product and are interested in establishing a new line of manufacture / industrial plat in the periphery. These are companies with technological innovation who are currently operating at the center of the country and are interested in relocating their plant or their manufacturing operation to the periphery, or alternatively, companies who completed development as a startup and are interested in establishing an advanced manufacturing plant in the periphery.

Following this new framework, these companies could receive a grant equal to 20%-30% of the approved investment, and at the same time be eligible for tax benefit of 7.5% of their taxable income as outlined in the law for the Encouragement of Capital Investment. Both authorities hope that about 5-10 companies will enjoy the new framework.

Nachum Itzkovitz, Director of the Investment and Industrial Cooperation Authority at the Ministry of Economy: "The purpose of this framework is to provide assistance in promoting an advanced and innovative manufacturing industry in the periphery as well. Beyond advances in technology, this investment contributes to a wider economical-social outcome – starting with encouraging local entrepreneurship and up to creating new employment venues. The cooperation between the Innovation Authority and the Investment Authority creates a force multiplier, which will most probably create innovative and interesting investments in the periphery."

Aharon Aharon, CEO of the Israel Innovation Authority: "This new framework emphasizes the importance of investing in the periphery in order to increase its attractiveness in drawing industrial plants and startups. Establishing advanced technological infrastructure in the periphery is vital to meeting the goals of the Innovation Authority – half a million people employed in innovation inclined companies within a decade, along with maintaining Israel's leadership in R&D and entrepreneurial culture, especial in fields that are at the forefront of technology."

For additional information on this framework, admittance, and support levels, please e-mail the Investment Authority at investmentcenter@Economy.gov.il