The Employment Grant Programs

1. Standard Program

2. Employment Grant Program for High Salaries (R&D Centers)

3. Employment Grant Program for Anchor (Large) Enterprises

1. The Standard Program 

In order to complement the revised Law for the Encouragement of Capital Investments, the government has decided to establish an additional program to increase employment in the outlying areas of Israel as well as in specific centers with high unemployment.

Support will be granted for the establishment or expansion of industrial plants, telephone call centers, computer service support centers or logistic centers.  In order to be eligible for this program these enterprises will have to employ a minimum number of workers at a minimum wage as detailed below.

The maximum support per worker will be 135,000 NIS (~ $34,000) over a period of 30 months or 4,500 NIS (~ $1,100) per month.

The main points of the program are as follows:

The Format

In order to be granted the support from this program companies will have to compete via a tender like system.

Eligible Areas

a.    The "Furthest Periphery", south of 75 latitude (Beer-Sheba) and north of the 258 latitude (Carmiel).

b.    Priority Development Area "A"  as designated in the Law for the Encouragement of Capital Investments

c.    Designated towns of the Minorities population (Arab, Druze, Circassian) or the Ultra-Orthodox Jewish population.( Elad, Modi'in Elite , Betar Elite, Immanu'el)

Wages Level

To qualify the enterprise must pay its employees the following minimal wages at least:

a.    In the Minorities and Ultra-Orthodox towns, the minimum wage (about 3,850 NIS).

b.    In all other eligible areas – 5,500 NIS average monthly wages.

Number of Workers

To qualify the enterprise should employ a minimum number of workers according to the following criteria:

a.    Establishment of a new plant – at least 5 workers.

b.    Transfer of a plant – the number of workers previously employed or 5 (whichever is higher).

c.    Expansion of a plant – at least 5 new workers

Amount of Support:

The amount of support will be according to the following rates from the gross salary of the worker, but not more than the maximum salary of 15,000 NIS.

1.   Businesses in the Sderot and Gaza envelope region.

Small Businesses (up to 50 workers or annual turnover of  less than 25 million NIS):

a.        First 10 months        – 30%

b.      11th. – 20th. month     – 20%

c.       21st. – 30th. month     – 10%

Medium sized Businesses (from 50-100 workers or annual turnover of 25-100 million NIS):

a.        First 10 months        – 25%

b.      11th. – 20th. month     – 15%

c.       21st. – 30th. month     –   5%

Large Businesses (up to 50 workers, annual turnover of  more than 100 million NIS):

a.        First 10 months        – 15%

b.      11th. – 20th. month     – 10%

c.       21st. – 30th. month     –   5%

2. Priority Area A

Small Businesses:

a.        First 10 months        – 25%

b.      11th. – 20th. month     – 15%

c.       21st. – 30th. month     –   5%

Medium sized Businesses:

a.        First 10 months        – 15%

b.      11th. – 20th. month     – 10%

c.       21st. – 30th. month     –   5%

Large Businesses

a.        First 15 months        -  10%

b.      16th. – 30th. month     -    5%

3. Special Population Groups

Employers employing workers from among special population groups ( Ultra-Orthodox, Minorities, Invalids and Single Parents will be entitled to the following rates per worker      

a.       First 10 months        – 35%

b.      11th. – 20th. month     – 25%

c.       21st. – 30th. month     –  15%

Remark: These rates also apply to employers employing workers that belong to these special population groups in The Gaza Envelope region, Sderot and Priority Area A as per paragraphs 1 & 2 above.

Allocation Method

The annual budget for this program is 100 million NIS. These funds will be allocated to participating companies by means of a public tender. Twice a year a tender will be announced and any interested company can apply. The proposals will then be evaluated and the proposals with the most merits will be chosen.

Criteria

Following is a breakdown of the criteria that will be used to choose the successful applicants:

Location – 30%, Average level of salary – 25% ( up to a maximum of 15,000 NIS) , Socioeconomic classification of the town/location- 5%, Length of establishment period -5%

(the shorter the better), Length of operational activity with maximum no. of workers–10%,

Shi'ur Hahapchta- 10%, Amount of investment-5%.

Procedure for presenting proposals

The proposals should be delivered in 6 copies, in a sealed envelope  to the Proposals Box of the Israel Investment Center , 5 Bank of Israel Street ( 2^nd floor), Jerusalem.

3. The Employment Grant Program for Anchor (Large) Enterprises

The Ministry of Industry, Trade and Labor has launched a new incentive program for encouraging employment in large enterprises in the Negev (south) and Galilee (north).

This new program is part of a long term plan for the Negev and Galilee to increase employment possibilities in the north and south of Israel. To qualify industrial companies have to employ at least 100 workers at their plant.

The program offers the investor employment grants that will be determined as apercentage of the employer's cost of salary for each new employee, for a period of 4 years.

Minimum Requirements:

·          Minimum number of employees required: 100.

·          The average cost of salaries of all new employees has to be at least 1.5 times the average salary in Israel (about 12,000 NIS or $3,000). 

Employment Grants:

The following is an outline of the grants scheme:

·          35% - 45% of each new employee's cost of monthly salary in the first year.

·          30% - 40%      in the second year.

·          10% -20%       in the third year.

·          5%                   in the fourth year.

The precise grant level (within the ranges specified above) will be determined according to the number of employees in the center – the higher the number, the higher the grant level per employee.

General Conditions

The company establishing the center is required to have annual revenues of at least 25 million dollars

·          The center has to be established in Priority Area A basically the Negev and Galilee regions. This area includes most locations outside the central metropolitan regions. (Towns that qualify include for example: Beer-Sheva in the south and Carmiel in the north).

·          At least 60% of all new employees should be residents of Priority Area A namely the Galillee  region in the north and the Negev region in the south.

Queries:

All queries about the programs, including the dates of the specific tenders should be directed to-

Mr. Asher Shitrit,

Israel Investment Center,

Ministry of Industry, Trade and Labor,

5 Bank of Israel Street,

Jerusalem 91490.

Asher.Shitrit@moital.gov.il

Tel: 972-2-666.2236   Fax: 972-2-666.2905

All queries to be submitted in writing.

March 2011

REMARK: This document is a summary of the original document in Hebrew. For full details of the Employment Grant Program the original Hebrew document should be consulted.