The Investment Promotion Center at the Ministry of the Economy has decided to change some of the eligibility criteria for companies to obtain grants under the Law for the Encouragement of Capital Investment. The decision, taken by center at its last meeting, states that a company applying for a government grant that presents a plan for innovations in production processes and increasing productivity will have a much greater chance of obtaining one.
The purpose of the change is to encourage low technology and mixed-low technology industries to install innovative production technologies to boost output and the hiring of skilled workers who will earn more than the minimum wage, and will contribute to boosting productivity.
The Ministry of the Economy told "Globes" that the new criteria will come into effect in the next fiscal year, when they will comprise 30% of the points companies will receive in the Investment Center's preliminary grants process. It is important to note that the changes apply to the Investment Center's grants track, and not to the track which also allows tax breaks for exporters.
The scoring method is partly based on the enterprise's location, the average employee salary cost, the socioeconomic status of the region where the applicant wants to operate, financial soundness, and the ratio between job creation and the size of the investment.
These criteria are preceded by the threshold eligibility conditions for a grant: industrial activity in an A development area, sales in a market with at least 14 million residents, or exporting at least 25% of output. p>The Ministry of the Economy says that the priority is to encourage enterprises to pay employees relatively high salaries, rather than to make grants conditional on employing a large number of employees earning the minimum wage.
Senior aides to Minister of the Economy Naftali Bennett said that more changes and updates may be made soon to the eligibility terms for companies for obtaining grants under the Law for the Encouragement of Capital Investment, in an effort to adapt them to contemporary market needs.
Published by Globes [online], Israel business news - www.globes-online.com - on July 22, 2013
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