Programs for the Provision of Aid for the Placement of New Employees in
Businesses in Israel (Director General Directive 4.17)
Index
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
Background
Definitions
The Relationship between the Aid Programs of this Scheme and Aid in other
programs
Implementation of the Director General Directive – the Roles of the Director
and the Committee
Submission of the Application
Threshold Conditions
Consideration of the Applications and Selection of the Winner
Handling Fees
Performance Guarantee
The Various Aid Programs – Persons Who may Submit Applications for Aid
Employees' Wages
The Number of Employees and their Place of Residence
Actions to be Performed by the Receiver of the Aid following the Winning
The Amount of the Aid and the Payment Structure
Cancellation of the Aid
The Criteria for Choosing the Winner in the Sderot and Gaza Envelope Region,
Outlying Regions and Class "A" Development Area Programs and inn the
Populations Characterized by a Low Rate of Participation in the Work Force
Program.
The Criteria for Choosing the Winner in the People with Disabilities Program
Miscellaneous
Budget and date for Submission of Applications
Application
Appendices
Ministry of Industry, Trade and Labor
Director General Directives
1.
Background
In accordance with Israeli government decisions No. 4423 (SE/174) dated
22/1/2009, and No. 4545 dated 12/3/2009, the Ministry of Industry, Trade and
Labor (hereinafter: "the Ministry") has formulated several different aid programs,
in order to encourage investments in Israel's economy, and the integration of new
employees into the circle of employment.
In the current scheme, an emphasis has been placed on the placement of
employees in national priority regions in general and in the outlying regions in
particular, on the placement of additional employees in the Sderot and Gaza
envelope region, in view of the continuing serious security situation in this region,
and on the placement of employees from populations characterized by a low rate
of participation in the work force.
The aid shall be granted by way of competitive allocation. This Director General
directive sets out an outline for the implementation of the aforesaid aid Programs.
2.
Definitions
In this Director General Directive, the following terms shall have the definition
ascribed to them in this section, unless otherwise expressly stated in this directive:
2.1.
2.2.
2.3.
2.4.
2.5.
2.6.
2.7.
"A Person with Disabilities" – a person for whom one of the
following holds true:
2.1.1.
His level of disability is no less than 20%, according to the
valid determination of an authorized body.
2.1.2.
He suffered a hearing loss of at least 50 Db, according to the
valid determination of an authorized body.
2.1.3.
The Office for Integration of the Handicapped into the Work
Force in the Ministry determined, after he had provided a
medical certificate from the relevant specialist physician, that
he is a person with disabilities under the Equal Rights for
People with Disabilities Law, 5758-1998, whose disability is
no less severe than the disabilities of a handicapped person as
said in section 2.8.1 or 2.8.2.
"Populations Characterized by a Low Rate of Participation in the
Work Force"
Ultra-orthodox people, minorities, people with disabilities, single
parents.
Development Area "A"
Within the meaning thereof in the Encouragement of Capital
Investments Order, (Determination of the Extent of Development Areas)
5763-2002.
"Minorities"
Arabs, Druzes or Circassians.
"Controlling Shareholder"
A person who holds, whether directly or indirectly, either alone or
together with another person, at least 50 percent of the holding rights in
the corporation.
"Together with another person" – together with his relative, and also
together with a person who is not his relative, if they jointly are
controlling shareholders of another body of persons, or if - under an
agreement, directly or indirectly - there is cooperation between them, on
a permanent basis, on substantive matters of the company.
"The Committee"
The Committee as defined in section 4 below.
"Relocation"
2.8.
2.9.
2.10.
2.11.
2.12.
2.13.
The relocation of the business's activity, either in whole or in part, from
the Tel Aviv, central and Haifa regions, as defined by the Ministry of
Interior, to Development Area "A".
"Ultra-Orthodox People"
Mitzva-observing Jews, who are unique in the religious strictness they
maintain in education, in the character of their community and in their
way of life, all of which distinguish them from other Mitazva-observing
Jews, and for whom at least one of the following holds true, to the
satisfaction of the allocation committee (as defined below):
2.8.1.
Their place of residence is in one of the localities or one of the
urban neighborhoods the level of homogeneity of which is 1-9,
that are listed in the first part of Appendix A.
2.8.2.
Their place of study is an ultra religious study institution
recognized by the Ministry of Education.
2.8.3.
The places of study of their children who are under the age of
18 are non-official but recognized, or "exempt" ultra-orthodox
study institutions, the licenses of which are regulated by the
Department for Non-Official Recognized Education.
"Authorized Body"
A person who is authorized by law to determine a percentage of
invalidity for the purpose of the payment of a disability benefit that is
paid under any law, or for the purpose of granting an exemption or credit
granted under any law.
“Single Parent”
A single parent recognized by the National Insurance Institute, who
receives income support/an income supplement and/or maintenance
payments from the National Insurance.
“Judea and Samaria”
The settlements in which citizens of the State of Israel reside, in the
Judea and Samaria area, which include the following sub-districts,
according to the Ministry of Interior:
The Jenin sub-district (71), the Nablus sub-district (72), the Tulkarm
sub-district (73), the Ramallah sub-district (74), the Jordan sub-district
(75), the Bethlehem sub-district (75) and the Hebron sub-district (76).
"Director"
Deputy Director of the Investment Center in the Ministry and Director of
the Employment Program.
“The Number of Employees”
The average monthly number of employees in the business – as defined
in section 2.15 below – in the year preceding the date that shall be
published according to the provisions of section 19, or 80% of the
number of employees in the business according to a monthly average in
the final quarter preceding the date published as aforesaid, whichever is
higher.
The higher number of the two, that shall be determined, shall be retained
throughout the aid period, hereinafter “the Base Positions”. Employees
who were employed by the applicant but do not meet the definition of
“Employees” as said in section 2.15 below, shall be taken into account
for the purposes of base positions.
2.14.
"A Full Time Position"
A position in which the employee was employed for at least 186
monthly hours, and where a collective agreement, individual
employment contract or any other agreement that applies to the
employee exists, in which a full time position is defined otherwise – in
accordance with such definition.
2.15.
"Employees"
Israeli citizens or residents who are directly employed in the business.
For the purpose of determining the number of employees, only the fulltime positions in the business shall be taken into account, in accordance
with the above definition of "full-time position". However, a full-time
position may be manned by a number of employees who are employed
part-time, provided that the total positions accumulate to the working
hours of a full-time position.
"New Employee"
An employee who was placed in the applicant starting from the date that
shall be published in accordance with the provisions of section 19
below, and was not employed by the applicant for aid or by its
associated business and did not himself or through another person
provide services to the applicant for aid.
"Services Industries"
The industries set out in Appendix B of this Director General directive.
"Business"
A corporation engaged in one of the manufacturing industries defined by
the Central Bureau of Statistics or that provides a business service in one
of the services industries defined in Appendix B of this directive.
2.16.
2.17.
2.18.
2.19.
2.20.
2.21.
"Medium Sized Businesses"
Businesses in which the number of employees is over 50 and under 100,
or the sales turnover of which, as of the date of the submission of the
application, is over 25 million NIS and under 100 million NIS.
"Large Businesses"
Businesses in which the number of employees is over 100 or the sales
turnover of which, as of the date of the submission of the application, is
over 100 million NIS.
"Small Businesses"
Businesses in which the number of employees is under 50 or the sales
turnover of which, as of the date of the submission of the application, is
under 25 million NIS.
2.22.
"Associated Business"
Any one of the following:
2.22.1.
2.22.2.
2.22.3.
A subsidiary of the business, an affiliated company and an
associated company, as defined in The Securities Law, 57281968;
A controlling shareholder in the business.
A business controlled – directly or indirectly – by the
controlling shareholder of a business applying for aid under
this Director General directive.
2.23.
"Outlying Regions"
Local authorities that are included in clusters 1 through 4 of the
periphery index published by the Central Bureau of Statistics, or local
authorities included in cluster 5 of the periphery index and which were
included in government decision No. 4415 dated 20.11.05, on the
national strategic plan for the development of the Negev.
2.24.
The Sderot and Gaza Envelope Region
As defined in the Encouragement of Capital Investments Order,
(Determination of the Extent of Development. Areas) 5763-2002.
2.25.
"Corporation"
A body of persons that was incorporated in Israel, and in the case of a
body of persons that was incorporated outside of Israel – a subsidiary
fully owned by it or a sister corporation with identical ownership, that
was established by it within 3 months from the date of the issuance of
the instrument of approval.
2.26.
"The Establishment Period"
A period starting from the date of receipt of the notice of winning the
competitive allocation process, and ending at the date of the recruitment
of the number of employees undertaken by the applicant for aid,
provided that this period does not exceed a year.
"The Employment Period"
The period during which the applicant for aid undertakes to operate the
business with the entire number of employees undertaken by it, at the
wage undertaken by it. This period, starting from the recruitment of the
first employee, shall be not less that four years per employee.
2.27.
3.
The Relationship between the Aid Programs of this Scheme and Aid in other
Tracks
3.1.
A business that receives aid under this directive shall also be entitled to
receive benefits of the "benefits track" the Law for Encouragement of
Capital Investments, 5719-1959 (hereinafter: "the Law") subject to its
meeting the conditions prescribed therein.
A business that holds an instrument of approval under the grants track or
under the alternative track prescribed in the Encouragement of the Law
for Encouragement of Capital Investments, 5719-1959 (as worded prior
to 1.4.05) or an instrument of approval under a different aid track
prescribed in the Capital Investments Law or under the employment
program, in accordance with the relevant government decisions, shall
receive the aid for the placement of additional employees, in excess of
the obligation of the business set out in the instrument of approval, as
stipulated in the Law.
Clarification: an approved enterprise that does not meet its obligations
shall not be entitled to receive the aid under this directive, and a business
that holds and instrument of approval that was granted by virtue of any
allocation under the employment program shall not receive aid while it
hasn't completed all of its obligations in accordance with the instrument
of approval that was granted to it.
3.2.
A business that submitted an application for aid under the grants track,
and as of the date of the publication of the Director General directive the
application has not yet been considered and no instrument of approval
has been issued in respect of it, shall not be able to receive aid under this
process, unless it gave notice of withdrawal of the application under the
grants track.
4. Implementation of the Director General Directive – the Roles of the Director and
the Committee
4.1.
4.2.
4.3.
The Director shall be responsible for the implementation of all of the
provisions of this Director General directive, including the opening of
the envelopes, the assembling of the applications, the preparation of all
the material required by the committee for taking its decisions, and after
the winning – inspections regarding the fulfillment of the conditions for
the grant of aid, and of all the processes involved in its payment.
For the purpose of carrying out the aforesaid, the Director shall appoint a
team of employees that shall operate in accordance with his instructions.
The choosing of the businesses who shall be granted aid under the
programs set out in this directive shall be made by a committee the
composition of which shall be as follows:
4.3.1.
The Director of the Investment Center – Chairperson of the
committee.
The Deputy Director of the Investment Center – a member and
the substitute Chairperson of the committee.
4.3.3.
The representative of the Director General.
4.3.4.
The representative of the Accountant General of the Ministry
of Finance.
4.3.5.
The representative of the Budget Department of the Ministry of
Finance.
The legal quorum for decision taking by the committee is at least 3
members of the committee, including the chairperson of the committee
or his substitute. In legal matters, the position of the legal council
accompanying the committee shall be decisive.
The position of the Accountant General shall be decisive in budget
matters.
In case of ties, the chairperson of the committee shall hold a double
vote.
The committee shall have the authority to take any decision
required for the carrying out of this directive, including –
4.5.1.
Examining the various applications;
4.5.2.
Requesting the companies to clarify their applications, as
needed;
4.5.3.
To carry out any act for the purpose of examining the offerors'
representations;
4.5.4.
To determine the winners of the competitive allocation, in
accordance with the threshold conditions and the criteria
prescribed in this directive.
4.5.5.
To prescribe conditions in the approval granted to the winners.
4.5.6.
To take a decision on the cancellation of the aid and the
forfeiture of the guarantee, as set out in section 15.
4.5.7.
To lay down procedures concerning the carrying out of this
directive. The procedures shall be posted on the website of the
Ministry, from time to time.
4.5.8.
To take any decision for the purpose of carrying out this
directive.
The committee may choose more than one winner or to decide not to
choose any winner. The committee may also accept any application, in
whole or in part.
The committee shall keep minutes of its meetings. The minutes shall be
signed by the Chairperson of the committee or by his substitute.
The decisions of the committee shall be taken by a majority vote. In the
event that the committee reaches an impasse on voting, the vote of the
chairperson shall be decisive. The decisions of the committee shall be
signed by the chairperson of the committee or by his substitute.
4.3.2.
4.4.
4.5.
4.6.
4.7.
4.8.
5.
Submission of the Application
The applicant for aid shall submit its application on the form appended as
Appendix A of this directive, shall indicate the program under which it is
applying and whether it belongs to the Sderot and Gaza envelope region - and
shall also indicate its preferred framework of aid – the general framework or the
one described in section 12.4 below.
The applicant for aid shall attach to its application the following documents, duly
made and signed:
5.1.
A detailed business plan for the establishment, relocation or expansion
of the business, and for its operation for no less than thirty months. The
plan shall include at least the following:
5.1.1.
An undertaking to meet milestones for the establishment and
operation of the business.
5.1.2.
5.1.3.
5.1.4.
5.1.5.
5.1.6.
5.2.
5.3.
The number of employees (in terms of a full-time position) that
the applicant undertakes to employ for no less than 30 months
from the date of the operation of the business. The offerer must
indicate a defined and fixed number of employees, and not a
varying number of employees. The number of employees, and
in the case of an expansion - the number of additional
employees in excess of the base positions, shall be no less than
the number of employees stipulated section 12 below.
The average monthly wage cost in the business, undertaken by
the applicant for aid, during each of the years of operation of
the business. The average monthly wage shall be no less than
the wage said in section 11 below.
The period of establishment and the period of operation
undertaken by the applicant for aid.
The rate of the proposed reduction from the maximum amount
of aid.
Details on the proposed project and its feasibility, and details
on the applicant for aid, its experience and its financial
stability.
A Certificate of incorporation. In the case of a body of persons that was
incorporated outside of Israel an undertaking must be attached,
according to which the applicant shall establish a subsidiary fully owned
by it or a sister corporation with identical ownership, within 3 months
from the date of the issuance of the instrument of approval, in
accordance with the text attached as Appendix C.
An approval of book-keeping and of registration at the value added tax
and income tax authorities, as well as all of the approvals required under
the Public Bodies Transactions (Enforcement of Account Administration
and Payment of Tax Debts) Law, 1976. In the case of a body of persons
that was incorporated outside of Israel, an undertaking must be attached,
according to which these approvals shall be submitted by the subsidiary
or sister corporation, as the case may be, after its establishment, in
accordance with the text attached as Appendix C.
5.4.
5.5.
5.6.
5.7.
5.8.
5.9.
6.
Audited financial statements of the past year.
A receipt for the payment of handling fees as set out in section 8 below.
An undertaking to meet the requirements of this provision, according to
the text attached as Appendix D.
A body of persons that was incorporated outside of Israel shall undertake
that the subsidiary or sister corporation, as the case may be, shall
provide an undertaking as aforesaid, after its establishment, according to
the text attached as Appendix C.
An undertaking to observe intellectual property laws, according to the
text attached as Appendix E. A body of persons that was incorporated
outside of Israel shall undertake that the subsidiary or sister corporation,
as the case may be, shall provide an undertaking as aforesaid, after its
establishment, according to the text attached as Appendix C.
An undertaking not to request benefits under the grants track, according
to the text attached as Appendix F.A body of persons that was
incorporated outside of Israel shall undertake that the subsidiary or sister
corporation, as the case may be, shall provide an undertaking as
aforesaid, after its establishment, according to the text attached as
Appendix C.
5.10.
If separate applications shall be submitted under the programs set out in
section 7.1 above (to each of which all of the required documents must
be attached), in respect of the same employees, the submitter must
indicate, in a letter that shall be attached to each application, which of
the application it shall request to exercise if all of its offers are
announced as winners.
It should be clarified and emphasized that an applicant for aid under one
of the programs may submit an application under another program as
well provided that it meets its threshold conditions. However, there shall
be no duplication of aid granted in respect to the same employees.
5.11.
A beneficiary particulars opening/updating form - Appendix G.
5.12.
An affidavit on social responsibility – according to the text of Appendix
H of this directive. A body of persons that was incorporated outside of
Israel shall attach an affidavit according to the text attached as
Appendix H1.
5.13.
Any additional document required for the consideration of the
application.
Threshold Conditions
6.1.
The applicant for aid is a business.
6.2.
The applicant is among those eligible to submit and application for aid
under this Director General directive.
6.3.
6.4.
7.
The business undertook to pay the employ the minimal wage stipulated
in section 11 and to employ the minimum number of employees
stipulated in section 12.
The applicant for aid meets the conditions set out in the Ministry of
Industry, Trade and Labor's Director General Directive 0.4, on
"Conditioning Aid on the Observation of Social Responsibility"
(hereinafter – "the Social Responsibility Directive") and attached to its
application a declaration and a request as required under this provision,
according to the text attached as appendix H.
Consideration of the Applications and Selection of the Winner
7.1.
7.2.
After the end of the period for submitting the applications, that was
determined for the various programs, the team shall open the envelopes
and divide them into groups, according to the programs to which the
publication applies:
7.1.1.
The Sderot and Gaza envelope region, outlying regions and
class "A" development area program.
7.1.2.
The populations characterized by a low rate of participation in
the work force program.
7.1.3.
The people with disabilities program.
The consideration of the applications and the selection of the winner
shall be carried out in the following manner –
7.2.1.
Each application shall be considered in accordance with the
threshold conditions of the program under which it was
categorized and according to the area to which it belongs.
Offers form the Sderot and Gaza envelope region applying for
aid in the framework described in section 12.4 below – shall be
categorized under a separate group.
7.2.2.
An opinion shall be prepared on behalf of the Investment
Center in respect of each application that meets the threshold
conditions, on the financial feasibility of the business plan that
was submitted and the applicant's ability to meet its targets.
Applications in respect of which negative opinions were given
by the Investment Center, regarding their financial feasibility,
shall also be brought before the committee. The committee
shall decide whether or not the offers shall participate in the
scoring process.
7.2.3.
The applications which met the threshold conditions and which
the committee decided shall participate in the scoring process,
shall be scored in accordance with the criteria set out in section
16 below, except applications under the people with disabilities
program, which shall be scored in accordance with the criteria
set out in section 17 below.
7.2.4.
All of the applications that were scored, shall be ranked, each
in its own program. Offerors whose offers shall receive the
highest score in their program shall be selected as winners of
the aid, up to the amount of the budget that has been allocated
in advance for each program. The winners shall be granted
instruments of approval by the Investment Center.
8.
Handling Fees
The applicant for aid shall attach to his application a receipt for depositing the
sum of 1,500 NIS to account No. 0000107 at the Postal Bank, on a regular
payment voucher to the order of: the Ministry of Industry, Trade and Labor, the
Investment Center, for (the name of the business).
An application in respect of which no such payment was made shall be
disqualified. Payment made after the prescribed final date of submission of
applications shall not be accepted.
9.
Performance Guarantee
9.1.
As a condition for the receipt of an instrument of approval, the receive
of the aid shall deposit an autonomous bank guarantee or a guarantee
from an Israeli insurance company that holds a license to engage in
insurance under the Control of Financial Services (Insurance) Law,
5741-1981, to the order of the Ministry, in the amount of 5% of the sum
of the aid stated in the offer, according to the text attached as Appendix
I, for a period of forty four months, starting from the date of the
instrument of approval
The amount of the guarantee shall be annually reduced to a rate of 5% of
the balance of the aid to which the receiver of aid is entitled.
9.2.
The guarantee shall be linked to the consumer price index published by
the Central Bureau of Statistics. The base index and the base date are the
date of the instrument of approval.
The guarantee shall be submitted only according to the attached text
(Appendix I).
9.3.
The Ministry may forfeit the guarantee if the winner fails to begin the
establishment/expansion/relocation of the business within the period
undertaken by it in its offer, or fails to fulfill its other obligations under
the instrument of approval, these Director General directives or its offer,
or if it did not correct the noncompliance in accordance with the
requirements of the committee.
Only the winner shall be liable for the costs of the issuing of the
guarantee.
It is hereby clarified that in case of failure to deposit the guarantee
within the aforesaid period, the Ministry may cancel the winning of the
applicant for aid.
9.4.
9.5.
10.
The Various Aid Programs – Persons who May Submit Applications for Aid
10.1.
10.2.
10.3.
Under the Sderot and Gaza envelope region, outlying regions and class
"A" development area program, any person who intends to establish a
business in one of these area, to expand a business in them, or to relocate
a business to them, may submit and application for aid.
Under the populations characterized by a low rate of participation in the
work force program, where there is no restriction in respect of the
entitled areas, as aforesaid in section 10.1, any person who intends to
establish or expand a business in any area may submit an application,
provided that at least 90% of the employees in the business, and in the
case of an expansion – at least 90% of the additional employees in
excess of the base position, shall be from the same population.
Under the people with disabilities program, where there is no restriction
in respect of the entitled areas, as aforesaid in section 10.1, any person
who intends to establish or expand a business in any area may submit an
application, provided that at least 90% of the employees in the business,
and in the case of an expansion – at least 90% of the additional
employees in excess of the base position, shall be from the same
population.
Under the people with disabilities program, only a business that is not a
protected undertaking within its meaning in section 17(a) of the
Minimum Wage Law, 5747-1987 may submit an application.
11.
The Wage of the Employees
11.1.
Throughout the operation period, the average monthly wage cost per
employee shall be according to the undertaking of the owner of the
business set out in his application, and no less than the following
minimum rates:
11.1.1. Under the Sderot and Gaza envelope region, outlying regions
and class "A" development area program - at least 5,500 NIS,
according to the cost reported in form 106. The wage cost
includes national insurance and employer tax.
11.1.2. In telephone call centers, under Appendix B "services
industries" (2, I), in "outlying regions", the wage cost shall be
at least 5,000 NIS per employee. The wage cost includes
national insurance and employer tax.
11.1.3.
Under the populations characterized by a low rate of
participation in the work force program – at least the minimum
wage, and in respect of the placement of people with
disabilities – at least the minimum wage or the adjusted
minimum wage under the Minimum Wage Law, 5747-1987,
and the regulations promulgated pursuant thereto.
11.1.4.
11.2.
12.
Under the people with disabilities program, at least the
minimum wage or the adjusted minimum wage under the
Minimum Wage Law, 5747-1987, and the regulations
promulgated pursuant thereto.
The calculation of the average monthly wage cost:
11.2.1. In the case of the establishment of a business or its relocation –
the average monthly wage cost shall be calculated in respect of
all of the employees in the business.
11.2.2. In the case of the expansion of a business - the average
monthly wage cost shall be calculated only in respect of new
positions that shall be added in excess of the base positions.
11.2.3. For the purpose of calculating the average monthly wage cost,
a wage of up to four times the average wage in the economy
shall be taken into account.
The Number of Employees and their Place of Residence
12.1.
12.2.
12.3.
12.4.
12.5.
In the case of an establishment of a business – the business must employ
at least 5 new employees. Under the people with disabilities program,
the business must employ at least one new employee.
In the case of a relocation of a business – the business must employ at
least the number of employees that was employed by it prior to the
relocation, or 5 employees, whichever is higher.
In the case of an expansion of a business – the business must employ at
least 5 new employees, in addition to those who are already employed in
the business. Under the people with disabilities program, the business
must employ at least one new employee.
In a business located in localities in Sderot and the Gaza envelope region
– as an alternative to the framework of the aid aforesaid in sections 12.112.3 above, aid may be receive starting from the placement of 2 new
employees. However, in that case, no aid shall be granted in respect of
employees exceeding four. The aid under this section shall be granted
exclusively to 50 businesses, from among the businesses who shall
choose this framework of aid.
The places of residence of the employees employed in the business and
entitling it to receive aid, except populations characterized by a low rate
of participation in the work force, shall only be in localities in
development areas, as defined in the Capital Investments Order,
(Determination of the Extent of Development Areas) 5763-2002. It
should be clarified that the business may employ additional employees,
who do not reside in these areas, but they shall not be included in the
business plan, neither with regard to the total number of employees for
the purpose of its fulfillment of the threshold conditions, nor to the
payment of the aid.
Notwithstanding the aforesaid, businesses located in Judea and Samaria
shall be entitled to receive aid in respect of employees who shall be
placed in them, even of such employees do not reside in development
areas, as defined in the Capital Investments Order, (Determination of the
Extent of Development Areas) 5763-2002, provided that against the
placement of the number of employees who do not reside in
development areas as aforesaid, the business shall discontinue the
employment of at least an identical number of employees who are not
Israeli citizens or residents.
13.
Actions to be Performed by the Receiver of Aid following the Approval of the
Aid
13.1.
13.2.
13.3.
14.
Where a body of persons that incorporated outside of Israel received an
instrument of approval and established a subsidiary or a sister
corporation in accordance with its obligations under this directive, the
instrument of approval shall be assigned to the subsidiary or to the sister
corporation.
The winner must recruit at least the number of employees undertaken by
it within the establishment period, and continue to employ them, at no
less than the wage undertaken by it, for no less than 30 consecutive
months.
In addition to the aforesaid, on the programss concerning populations
characterized by a low rate of participation in the work force, the winner
shall employ employees as set out in sections 10.2 and 10.3.
The Amount of the Aid and the Payment Structure
14.1.
The amount of aid in respect of each employee shall be according to the
following rates out of the wage cost of the employee, but shall not
exceed a wage cost ceiling of 15,000 NIS:
14.1.1. Businesses located in Sderot and the Gaza envelope region,
and in the outlying regions:
In large businesses
a. During the first ten months of the employment of the
employee – up to 15%.
b. Starting from the eleventh month of the employment until
the end of the twentieth month – up to 10%.
c. Starting from the twenty first month of the employment
until the end of the thirtieth month – up to 5%.
In medium sized businesses
a. During the first ten months of the employment of the
employee – up to 25%.
b. Starting from the eleventh month of the employment until
the end of the twentieth month – up to 15%.
c. Starting from the twenty first month of the employment
until the end of the thirtieth month – up to 5%.
In small businesses
14.1.2.
14.1.3.
a. During the first ten months of the employment of the
employee – up to 30%.
b. Starting from the eleventh month of the employment until
the end of the twentieth month – up to 20%.
c. Starting from the twenty first month of the employment
until the end of the thirtieth month – up to 10%.
Businesses located in a class "A" development area
In large businesses
a. During the first fifteen months of the employment of the
employee – up to 10%.
b. Starting from the sixteenth month of the employment until
the end of the thirtieth month – up to 5%.
In medium sized businesses
a. During the first ten months of the employment of the
employee – up to 15%.
b. Starting from the eleventh month of the employment until
the end of the twentieth month – up to 10%.
c. Starting from the twenty first month of the employment
until the end of the thirtieth month – up to 5%.
In small businesses
a. During the first ten months of the employment of the
employee – up to 25%.
b. Starting from the eleventh month of the employment until
the end of the twentieth month – up to 15%.
c. Starting from the twenty first month of the employment
until the end of the thirtieth month – up to 5%.
Notwithstanding the aforesaid in sections 14.11 and 14.1.2
above, in businesses that shall employ employees from
populations characterized by a low rate of participation in the
work force the amount of aid in respect of such employees wil
be as follows:
a. During the first ten months of the employment of the
employee – up to 35%.
b. Starting from the eleventh month of the employment until
the end of the twentieth month – up to 25%.
c. Starting from the twenty first month of the employment
until the end of the thirtieth month – up to 15%.
These aid rates shall also apply to businesses located Judea and
Samaria, in respect of employees against the placement of
which the business discontinued the employment of at least an
identical number of employees who are not Israeli citizens or
residents (and only in respect of such employees).
14.1.4.
14.2.
Under the populations characterized by a low rate of
participation in the work force and the people with
disabilities program
a. During the first ten months of the employment of the
employee – up to 35%.
b. Starting from the eleventh month of the employment until
the end of the twentieth month – up to 25%.
c. Starting from the twenty first month of the employment
until the end of the thirtieth month – up to 15%.
The payment of the aid shall be carried out in the following manner, and
subject to the receiver of aid's compliance with the rest of the terms of
this Director General directive (see an illustrative example below):
14.2.1. Starting from the placement of the minimum number of
employees, and for a period of 30 months, the winner shall
receive the aid requested in the application in respect of each of
the employees it has placed.
That is, during the operation period (which begins on the date
on which the receiver of aid recruited all of the employees it
had undertook to recruit) and for a period of 30 months, the
receiver of aid shall receive the aid requested by it in its
application (provided that it employed all of the employed
stated in its application).
At the end of 30 months from the beginning of the receipt of
the aid, and for a period identical to the one during which it
received aid during the establishment period (the period
starting from the recruitment of the minimum number of
additional employees and ending upon the completion of the
recruitment of the number of employees undertaken by the
applicant for aid), the receiver of aid shall receive the balance
of the aid available to it. "The balance of the aid" means – the
full aid in respect of the entire number of employees
undertaken by the applicant for aid, with a deduction of the aid
it had received during the establishment period (starting from
the date on which it fulfilled the condition concerning the
minimum number of additional employees) and during the 30
months following it - all of which is conditional upon it
employing the entire number of employees undertaken in its
offer, and until no balance remains in the aid available to the
winner.
Example:
For example – the receiver of aid undertook that the establishment
period shall not exceed 5 months, and to employ 20 employees. The
receiver of aid recruited 5 employees within 3 months.
3 months have
passed. The
receiver of aid
completed the
recruitment of 5
employees (or one
employee under the
people with
disabilities
program). It begins
to receive aid.
Two more months
have passed (the
end of the
establishment period
undertaken by the
receiver of aid). The
receiver of aid
completed the
recruitment of 20
employees. It
continued to receive
aid in respect of
each additional
employee.
28 more months
have passed, which
are 30 months with
a deduction of the
two months during
which it received
aid, in the course of
the establishment
period. The receiver
of aid employs 20
employees, and
receives all of the
aid in respect of
them.
Two more months
have passed. The
receiver of aid
employed 20
employees. It
receives the balance
of the aid available
to it.
14.2.2.
At the end of each quarter of the establishment and operation
years, during which the applicant for aid fulfilled the terms of
the instrument of approval, the applicant for aid shall be
entitled to submit to the Investment Center an application for
aid. The application shall be supported by a report, signed by
the CEO of the applicant for aid, and shall specify the average
number of employees for that quarter, their wages, their places
of residence and all of the data relevant to the fulfillment, by
the applicant for aid, of the terms of the instrument of approval,
and any other information required. An opinion prepared by the
business's accountant shall be attached to the report, as well as
references as per the requirements of the Investment Center or
the Ministry comptrollership.
The receiver of aid shall be entitled to the entire aid amount
requested in its application, provided that it fulfilled all of the
terms of this directive and those of the instrument of approval,
and subject to the stipulations of section 14.2.3 above. It should
be clarified that the number of employees entitling the receipt
of the grant shall not exceed the number of employees declared
by the offerer in its application.
14.2.3.
Where the applicant for aid employed a number of employees
lower than the number of employees undertaken by it in its
offer, but no less than the minimum number of additional
employees, or where the wage cost in the business was lower
than the cost undertaken by the offerer in its offer, but no less
than the minimal wage, the committee may make deductions,
in accordance with the provisions of Appendix J, from the
payments payable to the business. In cases in regard to which
14.2.4.
14.2.5.
15.
16.
reasons shall be given, the committee may, instead, decide to
amend the instrument of approval.
Any sum received by the winner for supporting the training of
the employees or for their employment from any public body
shall be reduced from the aid amount. In this matter, "training"
– internal plant training.
The aid shall be paid within 60 days from the date of the
submission of the application for aid. Notwithstanding the
aforesaid, in the event that the Ministry of Finance's
Comptroller General shall not transfer the entire monthly
funding in accordance to the Ministry's approved budget, the
Ministry may defer parts of the payment of the aid, for a
reasonable period of time, until the completion of the funding
by the Ministry of Finance, and the business shall not be
entitled to linkage differentials, interest or any compensation
for such deferment.
Cancellation of the Aid
15.1.
The committee shall consider the events listed below to constitute
fundamental breaches of the terms of this directive, and may decide to
cancel the aid, in whole or in part, both the aid that had already been
paid and the aid not yet paid, and to demand the repayment of the
portion which had been paid with the addition of interest and linkage
differentials, within their meaning in the Adjudication of Interest and
Linkage Law, from the date of its payment to the date on which it was
actually repaid. In addition, the committee may in such cases forfeit the
performance guarantee.
15.2.
The following are the events for the purposes of section 15.1 –
15.2.1. Any reduction below the respective required wage of the
employees under section 11 above.
15.2.2. Any reduction below the respective required minimum number
of employees under section 12 above.
15.2.3. Any relocation of the business without the prior approval of the
committee. It is to be noted that a business may relocate the
business, provided that the general weighted grade of its offer
(in accordance with the criteria set out in section 16 below) has
not fallen lower than the general weighted grade as such stood
in its offer.
15.2.4. The provision of false data, at the submission of the application
or thereafter.
15.2.5. A breach of section 18.11.
15.2.6. Where the business failed, in the opinion of the committee, to
comply with any of the provisions of this directive, or with the
provisions on social responsibility.
The Criteria for Choosing the Winner in the Sderot and Gaza Envelope
Region, Outlying Regions and Development Area "A" program and of the
Populations Characterized by a Low Rate of Participation in the Work Force
Program
The winner shall be determined in accordance with the following criteria:
16.1.
The location of the business (30%).
Higher points shall be awarded the further the business is located from
the center of Israel, according to the following:
16.1.1. For the purpose of the Sderot and Gaza envelope region,
outlying regions and the Development Area "A" program
a. Where a business is located in the northern district,
according to the Ministry of Interior, the distance of the
business from the city of Haifa shall be taken into account.
The 120 km point of distance from the city of Haifa is a
point that receives a maximum score under this criterion.
For the purpose of the scoring, the distance of the business
from Haifa - relative to the 120 km point of distance, shall
be taken into account.
b. Where a business is located in the southern district,
according to the Ministry of Interior, the distance of the
business from the city of Ashdod shall be taken into
account. The 150 km point of distance from the city of
Ashdod is a point that receives a maximum score under this
criterion. For the purpose of the scoring, the distance of the
business from Ashdod - relative to the 150 km point of
distance, shall be taken into account.
c. A business located in Judea and Samaria or in Jerusalem
shall be scored as follows:
1)
A business located in a locality that is on longitude
165 or westward of it – shall receive 5.5 points.
2)
A business located in a locality that is east of
longitude 165 and until longitude 180 inclusive –
shall receive 11 points.
3)
A business located east of longitude 180 – shall
receive 16.5 points.
16.1.2.
16.2.
For the purpose of the populations characterized by a low rate
of participation in the work force program: the distance of the
business from the city of Herzliya shall be taken into account.
The 135 km point of distance from the city of Herzliya is a
point that receives a maximum score under this criterion.
For the purpose of the scoring, the distance of the business
from Herzliya in every direction (north, south or east) - relative
to the 135 km point of distance, shall be taken into account.
The average wage cost per employee, under the stipulations of section
11 above; (25%).
16.3.
16.4.
16.5.
16.6.
16.7.
16.8.
17.
Higher points shall be awarded the higher the wage undertaken by the
applicant. The minimum score shall be assigned to the required wage
under the relevant program, and the maximum score shall be assigned to
the ceiling of wage entitling to receive the grant (15,000 NIS).
The classification of the locality in which the business is located under
the socio-economic cluster (under the publications of the Central Bureau
of Statistics; (5%), up to socio-economic class 5. Higher points shall be
awarded the lower the socio-economic classification of the locality in
which the business is located. The maximum score (5 points) shall be
assigned to a business located in a locality listed under class 1, the
minimum points (one point) shall be assigned to a business located in a
locality listed under class 5, and any additional point under the socioeconomic classification (above 1) shall reduce one point under this
criterion.
A business located in a locality the socio-economic classification of
which is higher than 5 shall receive 0 points.
The length of the establishment period (5%)
Lower points shall be awarded the longer the establishment period. The
maximum period (one year) shall be assigned a score of 0 points, and the
minimum period (0 months) shall be assigned 5 points.
The length of the operation period (10%)
Higher points shall be awarded the longer the operation period. For each
quarter in excess of the required 30 months a two point score shall be
awarded, up to the maximum of 10 points (for 5 quarters and above).
The requested rate of reduction from the maximum aid rate (10%)
Higher points shall be awarded the higher the rate of reduction from the
maximum aid rate. A business that requested to reduce 10% from the
maximum aid rate shall be awarded the maximum score (10 points), and
any lower percentage of reduction (9%, 8% and so on) shall reduce one
point from the score, accordingly. An applicant who shall not offer any
reduction shall receive 0 points under this criterion.
The scope of investment in the business; (5%)
Higher points shall be awarded the higher the investment per employee.
An investment exceeding 15,000 NIS per employee shall be awarded the
minimum score (10 points), and any investment of 50,000 NIS per
employee shall be awarded the maximum score.
The business being located in the Sderot and Gaza envelope region, or in
the outlying regions – (10%).
The Criteria for Choosing the Winner in the People with Disabilities
Program
17.1.
A business the distance of which from the city of Herzliya (in every
direction) shall be awarded 30 points. For any other business, the
distance of the business from the city of Herzliya in relation to a distance
of 135 km shall be taken into account. The score shall be relative to the
18.
maximum score – 30 points (that is, the distance of the business from the
city of Herzliya shall be determined, the relation between that distance
and a distance of 135 km shall be measured, and the result shall be
multiplied by 30).
17.2.
A business located in the Sderot and Gaza envelope region, or in the
outlying regions shall receive 10 points, in addition to the aforesaid in
section 17.1.
17.3.
The classification of the locality in which the business is located under
the socio-economic cluster (under the publications of the Central Bureau
of Statistics may entitle to receive up to 5 points.
Higher points shall be awarded the lower the socio-economic
classification of the locality in which the business is located. The
maximum score (5 points) shall be assigned to a business located in a
locality listed under class 1, the minimum points (one point) shall be
assigned to a business located in a locality listed under class 5, and any
additional point under the socio-economic classification (above 1) shall
reduce one point under this criterion.
A business located in a locality the socio-economic classification of
which is higher than 5 shall receive 0 points.
Miscellaneous
18.1.
No aid shall be granted within the framework of a competitive allocation
for activities for which government support was granted within another
framework.
18.2.
The committee does not undertake to grant any application, including
due to non-compliance with the terms of a prior instrument of approval,
and it may cancel the selection process or make another new allocation,
at its decision.
18.3.
Unsuccessful applicants may apply to view the winning applications
within 30 days from the date of the committee's decision. The offerors
are asked to indicate in advance which sections of their applications are
privileged against presentation before other competitors. Nevertheless,
the Committee may, at its discretion, present the unsuccessful offerors
with any document which, in its professional evaluation, does not
constitute a trade or commercial secret and the presentation of which is
required in law.
18.4.
It is hereby clarified that the policy is to oppose any assignment of rights
and obligations. However, after it receives the instrument of approval,
the winner may submit a request to assign rights and obligations under
this Director General directive, at the committee’s discretion. In those
circumstances where such approval is given, the winner shall remain
responsible towards the committee in matters concerning the carrying
out of the provisions of the instrument of approval.
18.5.
The Committee does not undertake to terminate the selection process of
the winner and to determine a winner within a certain period, however if
the winning approval process does not end within 120 days from the last
date for the submitting of offers, the offerer may cancel its offer.
18.6.
18.7.
18.8.
18.9.
18.10.
18.11.
18.12.
18.13.
19.
20.
The committee may disregard an offer the conditions of which are
unreasonable or due to the lack of detailed reference to any of the
allocation sections which, in the opinion of the Ministry, prevents the
proper evaluation of the offer.
The committee may cancel the allocation if only one application is
submitted
The Committee reserves the right, during the course of the examination
and evaluation, to turn to all the applicants, in order to receive
clarifications on their applications or in order to remove any lack of
clarity which may arise during the course of examining the applications.
The grant of aid is subject to the approval of the budget, each year, to
budget limitations and to the Ministry's approved budget.
The winner shall not be entitled to receive aid if it has unsettled debts
towards the Ministry.
The applicant for aid undertakes to enable the Ministry or any person
acting on its behalf, including external parties on its behalf, at any time,
to audit its activities, to supervise the execution of the operating plan of
the business, on the dates and under the conditions as prescribed by
them, and to act in accordance with the Ministry's instructions, as given
from time to time.
Any change in the approval given to the winner shall require the prior
approval of the Committee.
The outlying regions, Development Area "A" and Sderot and Gaza
envelope region program, shall be given up to 40% of the total approved
budget. Notwithstanding the aforesaid, if the budget of the special
populations programs is not fully exhausted, the balance of the budget
shall be transferred to the Sderot and Gaza envelope region, outlying
regions and Development Area "A" program.
Budget and Date for Submission of Applications
Applications to participate in the scheme shall be submitted to the Investment
Center.
The manner of submission of the applications, the programs to which the
publication applies, the determining date for the definition of "New Employee"
and the definition of "Number of Employees" and the final date for their
submission shall be published on the Ministry's internet website and in the press.
In the notification, the budget available to the scheme shall be specified. If this
date or the scope of the budget shall be changed, a notice of this shall be
published in the Ministry's internet website and in the press, and, when necessary,
the relevant new dates for the definition of "New Employee" and "Number of
Employees" shall be published on the Ministry's internet website and in the press.
Applications submitted after the final date determined for the relevant program
shall not be considered.
Application
This directive shall come into force on the date of its signing, and it replaces
Director General Directive No. 4.17 dated 27.10.10.
21.
Director General Directive No. 4.17 dated 12.3.09 shall continue to apply to the
allocation that was made pursuant to it.
Director General Directive No. 4.17 dated 30.12.09 shall continue to apply to the
allocation that was made pursuant to it.
Appendices
Appendix A – Application form
Appendix B - Services industries
Appendix C – Undertaking of a Body of Persons that was Incorporated Outside of
Israel to Complete its Obligations through a Subsidiary or Sister Corporation
Appendix D – Undertaking to Fulfill the Terms of Director General Directives
Appendix E – Undertaking to Observe Intellectual Property Laws
Appendix F – Undertaking not to Receive Benefits under the Grants Program
Appendix G - Beneficiary Particulars Opening/Updating Form
Appendix H – Social Responsibility
Appendix H1 – Affidavit by a Body of Persons that Incorporated Outside of
Israel, Concerning Compliance with Labor Laws
Appendix I – Performance Guarantee
Appendix J – Calculations of Deductions
Sharon Kedmi
Director General
Jerusalem, 4 Kislev, 5771
11 November, 2010