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Financing A Business in Israel

Government Incentives

The Israeli government offers two main forms of incentives to UK businesses looking to invest in Israel. It is important to note that a business can only opt for one of the programs.

The Grants Program

Subject to approval from the IIS (Israel Investment Centre), government grants for up to 24% of a business tangible assets are offered to foreign investors. The grants vary according to the nature, size and location of the enterprise. The IIS is part of the Ministry of Industry Trade and Labor.

The Automatic Tax Benefits Program

Dependant on meeting certain criteria, tax breaks are available to foreign investors. With the breaks varying according to Israeli economic priorities, exemptions extend to 10 years of corporate tax exemption. The Israeli tax authorities run the program.

Research and Development Funds

Having passed the Law for the Encouragement of Industrial R&D, Israel invests around US$300million annually on supporting research projects for hi-tech entrepreneurship. The allocation of the funds is arranged through the Office of the Chief Scientist (OCS) in the Ministry of Industry and Trade and details can be found at http://www.investinisrael.gov.il

Private Finance

When seeking private finance, it is advised that you have a coherent business plan and that you have planned your enterprise thoroughly. It is often a good idea to consult an account prior to approaching lenders.

Israels banking market has three main banks; The Bank Leumi, Bank Hapoalim and Israel Discount Bank, which control around 75% of the market. The system is well regulated by the Central Bank of Israel. The HSBC bank also has a branch in Tel Aviv, which offers services for project financing and export credits.

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