Program for Encouraging the Establishment and Expansion of Hi-Tech Companies’ Activity in the Periphery

The program provides high-tech companies with incentives to establish centers of technological excellence in the periphery, with a dual objective: leveraging human capital in the periphery for manpower needs in the high-tech industry, and creating a highly productive manpower pool.

In order to attain this goal, incentives will be given to companies interested in establishing a presence in the periphery in order to work on innovative and advanced R&D projects, relying on local human capital. The program’s conditions include generous benefits to companies to initiate R&D activity in the periphery, providing that the majority of R&D activity be performed by local workers with adherence to a high innovation level.

In order to moderate the risk involved in initiating R&D activity in a geographically distant area and a “thin” market, the companies participating in the program will receive support for a guaranteed period of three years. The support will begin at 70% of the approved budget and will gradually decrease to 50% by the third year, up to a limit of 10 million shekels (approximately $2.7 million) a year. Furthermore, the companies will receive up to 3 million shekels (approximately $0.8 million) for necessary preparatory activity, such as purchase of R&D equipment and personnel training. The support will be provided on condition that 60% of the employees working on the supported R&D project will be periphery residents, and will also depend on the quality level of the project.

After 3 years support, the companies can apply for additional support as part of the framework of the Ministry of Economy and Industry’s employment programs (the Israel Investments Center).