R&D Incentives


The Office of the Chief Scientist (OCS) of the Ministry of Industry, Trade and Labor is responsible for implementing the government's policy of encouraging and supporting industrial research and development in Israel through the Law for the Encouragement of Industrial R&D. The OCS provides a variety of support programs that operate on an annual budget of about US $300 million. This is spent on about 1,000 projects undertaken by 500 companies. These programs have helped make Israel a major center of hi-tech entrepreneurship.
The main OCS' program (the R&D Fund) supports R&D projects of Israeli companies by offering conditional grants of up to 50% of the approved R&D expenditure. If the project is commercially successful, the company shall be under the obligation to repay the grant by royalty payments.
A new support program for traditional industry was launched in 2005 by the OCS, which offers separate evaluation and discussion for projects from traditional industries.


International Support
International support programs include bi-national funds for competitive R&D, enabling a joint R&D program with a foreign counterpart. Such funds include: BIRD (Israel-USA), CIIRDF (Israel-Canada), SIIRD (Israel-Singapore), BRITECH (Israel-Britain), KORIL (Israel-Korea) and VISTECH (Israel-Victoria, Australia).
In addition, numerous international R&D agreements with such countries as Austria, Belgium, Ireland, Germany, Holland, France, Hong Kong and China, among others, provide access to sources of national funding – Israeli companies participating in the program are entitled to receive R&D grants from the OCS.  


FP6 of the European Union
Israel is a participant in the Sixth Framework Program for R&D (FP6) of the European Union, the only non-European Associated State, fully participating in the program. FP6 is the prime vehicle for Research and Technological Development of the European Community which provides significant funding to participating parties.
ISERD - The Israeli Directorate for the Framework Program - provides assistance to Israeli companies and research organizations who wish to implement R&D programs with the European business and science communities. Grants to industrial R&D are 50% of the full cost and overhead; grants to universities are 100% of the additional costs and 20% of overhead.


Global Enterprise R&D Cooperation Framework
The Global Enterprise R&D Cooperation Framework encourages cooperation in industrial R&D between Israel and multi-national companies (MNCs). This program shares the high risks and enormous costs inherent in hi-tech development, with the partnering companies. Joint R&D projects between MNCs and Israeli companies, authorized by the OCS, could be entitled to financial assistance of 50% of the Israeli company’s R&D approved costs.  Direct investments in joint R&D projects with Israeli companies will be credited with 150 percent of the value of such investment for "Buy-Back" liabilities.


For more information on support for industrial R&D and starting entrepreneurs
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Office of the Chief Scientist (OCS)
Ministry of Industry,Trade and Labor
5, Bank Israel St.
Tel. 972-2-666-2486
Fax: 972-2-666-2928
POBox 3166, Jerusalem 91036