The Investment Center
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The Investment Center works to implement the Law for the Encouragement of Capital
Investments of 1959. The law is the main instrument for stimulating growth and
attracting foreign and local investment capital. The objective of the law is to
encourage the "establishment and expansion of industrial plants, industrial
structures, hotels and tourist projects by granting "approved enterprise" status to
applicants seeking investment assistance. This status allows entrepreneurs to receive
the benefits available under the law.
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The Investment Center's Board of Directors is comprised of representatives from
the Ministries of Industry and Trade, Finance, Tourism, Agriculture, the Office of
the Prime Minister and a representative of the public. The criteria for granting
"approved enterprise" status are: the applicant's competitive capability in international
markets and its use of innovative technology, job creation, high added value and
ability to answer special needs of the country's economy. The professional
administrations and regional development administration within the Ministry remain
involved throughout the approval process (see relevant section).
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Assistance to Approved Enterprises
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The Law for the Encouragement of Capital Investments established several areas of
national priority. Assistance varies between these areas. According to the law, an
approved enterprise receives benefits for the duration of the period of eligibility.
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This option involves the disbursement of a grant for the acquisition of fixed capital
as specified in the investment plan approved by the Investment Center.
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Below are the grant rates for investments under NIS 140 million (until
31.12.99)
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Region
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Industry
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Tourism (hotels)
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Tourism (other)
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National Priority
Area A
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24%
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24%
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15%
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National Priority
Area B
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10%
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10%
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Central Region
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Below are the grant rates for:
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1. |
Investments over NIS 140 million.
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2. |
Beginning January 1, 2000, investments under NIS 140 million (according
to recently proposed legislation for equalizing current grant rates to
1999 rates).
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Region
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Industry
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Tourism (hotels)
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Tourism (other)
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National Priority
Area A
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20%
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20%
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15%
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National Priority
Area B
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10%
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10%
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Central Region
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In addition, the company is entitled to a 25% reduction in corporate tax
payments
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(foreign investors are entitled to further reductions).
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B. Other Options
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A company may forego these benefits and instead receive a full tax exemption
on its undistributed income. The rates of exemption are as follows:
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1.
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National Area of Priority A - 10 year full tax
exemption.
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2.
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National Area of Priority B - 6 year full tax
exemption and 1 additional
year of partial exemption.
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3.
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Central Region - 2 year full tax exemption and 5
additional years of
partial tax exemption.
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Companies in which the foreign investment is greater
than 25% receive
increased benefits.
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For further information:
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The Investment Center - The Ministry of Industry and
Trade,
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King David St. 30, Jerusalem
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Tel: 02-6220373-5
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Fax: 02-6231468
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http://www.moital.org.il
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