preface

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INVESTMENT INCENTIVES AND TRADE ADVANTAGES
7.9.4.2. Technological Incubators - Pilot Program
“Incubator” projects are financed through a convertible bond.
The franchisee finances the administrative board of each
technological incubator. Incubators in National Priority Regions
are entitled to grants in government convertible bonds of up to
49% of administrative expenses. In each project the franchisee,
together with the entrepreneur, determines the latter’s holding in
the project - representing 35% at least and 70% at most of the
project. The government lends the entrepreneur a participation
sum of up to 85% of the approved budget. The government grant
shall not exceed US$ 400,000 for two years' operation. In
National Priority Regions, this grant shall not exceed US$
500,000 for two years' operation.
As of December 2009, one hundred and eighty incubators were
approved for the pilot program.
7.9.4.3. Biotechnological Incubators
Biotechnological incubators are a new project aimed at
supporting this type of research, given the specific nature and
needs of this sector. In line with the current tendency for
privatization, the private sector, in the form of franchisees, plays
a key role in the project.
The government’s participation in such projects is through a
convertible bond, while the incubators are actually managed by
the franchisees.
The franchisee obtains, for each project, a government loan of
up to 85% of the approved budget in the 1st year, up to 80% in
the 2nd year and up to 75% in the 3rd year. The approved
budget for up to 3 years shall not exceed NIS 8,100,000. The
franchisee is responsible for raising supplementary funding to
cover the rest of the approved budget.
For each incubator project, the franchisee negotiates with the
entrepreneur the percentage of control in the company running
the project.
The franchisee provides a physical plant with adequate
infrastructure for biotechnological R&D, administrative staff
and accessibility to consulting services. In return for covering
BDO Israel