Earlier this month, Israel’s Ministry of Economy’s Foreign Trade Administration announced a new assistance program for Israeli companies wishing to establish marketing representatives in, among other countries, China and Japan. The purpose of the program is twofold: both to accelerate rapid economic growth of Israeli companies in the target countries, as well as diversification of Israeli export destinations. The program will aim to strengthen the commercial activity and increase the number of Israeli companies in the target markets, by increasing exports to and expanding the scope of trade with these countries.
The program is designed for Israeli companies who wish to establish a marketing representative in the target countries. Awards granted will be based on expenditures by a grantee company for certain activities, including placing employees in the target country, hiring local consultants, operating expenses within the target country, and creation of a beta site and first commercial installation of a given new product to the target market. The grants will last up to three years each and range in size from 50 percent of a grantee company’s expenditures to a fixed cap of 700,000 New Israeli Shekels a year for expenditures on these activities (excluding the beta site related expenditures that are subject to a separate $400,000 cap). Grantee companies who subsequently increase their sales in the target country(s) will be charged royalties at a rate of 3 percent of such increase by the Ministry, pursuant to Section 12 of the program directive.
Applicants must satisfy the following conditions:
- The company is an Israeli company whose sales for 2014 ranged between 15,000,000 and 200,000,000 NIS.
- The company’s annual exports comprise at least 10 percent of its total sales.
- The company’s annual exports to the target country(s) in 2014 did not exceed 200,000,000 NIS.
The company does not employ, and has not employed in the previous six months, employees in the target market whose total volume exceeds that of five full-time employees.
- The activities for which the application was submitted, did not exist prior to submission, or are part of a new marketing goal whose aim is to increase exports to the target market.
- The company may not have limitations placed on its bank account and may not be in the process of receivership, liquidation, etc., nor may it have unsettled debts to the Ministry of Economy or the Israeli tax authorities. The company may not receive additional governmental funding toward the recognized expenses.
- Applications of companies whose products and services are used in both the civil sector and the military sector will be considered only if accompanied by authorization from the Defense Ministry that is does not oppose the funding by the Ministry of Economy of the company’s export of the products and/or services.
Companies wishing to apply should note that the deadline for submissions is Sept. 17, 2015, and the initial round of considerations will be of the first completed 20 applications, in the order in which the applications were received. If, upon completion of this first round of considerations, there is remaining funding in the program budget, subsequent applications will be considered in the order in which they are received.
Greenberg Traurig, the only Am Law 100 law firm that maintains multidisciplinary, permanent offices in Israel, China, and Japan, is uniquely positioned to assist Israel-based clients looking to build bridges and develop cross-border partnerships with these countries. As such, we make it a priority to make our clients and general readership aware of exciting and relevant opportunities, such as the Ministry’s new marketing grants. Further details on the directive may be accessed here.