(Communicated by the Ministries of Economy and Finance)

On Monday morning (22 September 2014), the Ministries of Economy and Finance approved Intel's investment program, during a meeting of the Ministry of Economy Investment Center administration, headed by Nahum Itzkowitz. The company's investment in upgrading the Kiryat Gat plant will be around $6 billion, in line with the business plan submitted to the Investment Center.

The members of the Investment Center administration include, in addition to representatives from the Ministry of Economy, representatives from the Ministry of Finance, the Israel Tax Authority, Ministry of Agriculture, the Manufacturers Association of Israel, and representatives of the general public.

As part of the program, Intel will employ another 1,000 workers, in line with its business plan. An additional 2,500 employees will be indirectly employed as a result of the plant upgrading. In addition, the company is committed to a reciprocal purchase in Israel of an aggregate total of around $550 million, and additional local purchases of around NIS 180 million annually. Likewise, the company committed to employing most of its workforce from southern Israel.

As part of the approval, Intel Corp -  which will turn its Kiryat Gat plant into the most advanced plant in the world for microchip technology - will be given special preferred enterprise status, as approved by the Ministry of Finance Director General Yael Andorn, Ministry of Economy Director General Amit Lang, and Israel Tax Authority Director General Moshe Asher. The special preferred enterprise status will be decreed according to the Law to Encourage Capital Investment,, after it was proven that the plant will contribute fundamentally to Israel's economic activity and produce a high yield for the economy, and has the ability to advance national targets for Israel's economy.

This status will grant Intel eligibility for 5% corporate tax over a period of 10 years (until 2023), and grants of $300 million to be spread over 5 years. For the first time, the State has determined clear criteria which will be constantly reviewed throughout the eligibility period:

1.      Increasing the export capacity relative to the previous eligibility period, in addition to revenue targets.
2.      Eliminating the possibility of reducing employment targets if investment rates decline.
3.      Increasing local purchasing demands, so that it is assured that there will be an increase of at least 10% relative to 2013 and a $100 million increase in reciprocal purchase.
4.      The number of workers who will move to the periphery was increased to 50% of all employees (relative to 50% of the incremental workers).
5.      Adding an investment in academic research institutions alongside financing tuition fees for students, and defining a minimum sum of $1 million annually.
6.      A commitment that Israeli workers and suppliers will implement the required set-up activities
7.      Preventing workers in the group being moved to beneficiary companies to meet employment targets.

Minister of the Economy, Naftali Bennett: "Approving Intel's arrival in Israel with the greatest investment in the history of the state is a historic occasion for all its citizens, but particularly for the residents in the south of Israel, where hundreds will be employed at the new plant. An investment of $6 billion, jobs for thousands of Israelis, and future income of millions of dollars from taxation makes is indeed tremendous news for the Israeli economy which is beginning the new year with a giant step forward and  positioning Israel as an attractive investment destination by international criteria."

Minister of Finance, Yair Lapid: "Intel's investment is a strategic asset for Israeli industry. This is the largest investment ever made by a foreign company in Israel, and is additional proof that Israel is at the forefront of the technology industry and innovation. The factory's upgrade will lead to the creation of around 1,000 new jobs which will provide work for residents of southern Israel. We will continue to work to create an attractive business environment so as to increase investment in the State of Israel."

Ministry of Finance Director General, Yael Andorn: "Approval of the investment program and grant concludes work conducted jointly by the Ministry of Finance, Ministry of Economy, and the Israel Tax Authority, in which we succeeded in creating the conditions for awarding a grant and tax benefits. The conditions ensure meeting measureable targets in the fields of employment, local purchasing, and increasing production in a manner which will contribute to growth in the economy."

Ministry of Economy Director General, Amit Lang: "Intel's investment, the largest ever in the history of the State of Israel, brings with it real tidings for strengthening Israeli industry, Israel's economic development, and, in particular, for reinforcing and increasing employment rates in southern Israel. We need to remember that this investment carries many and broader influences on the Israeli economy, such as the reciprocal purchase, research and development, training skilled manpower, etc."

Nahum Itzkowitz, Director of the Investment Center at the Ministry of Economy, noted that this is the largest investment ever made in Israel by a foreign company. All aspects of the investment were examined by professionals, and it was proven that it will bring many high-quality benefits to the State of Israel, first and foremost an increase in employment with high productivity, increased employment and direct and indirect economic activity, influence on research and development for many companies, expanding the activity of suppliers and service providers in Israel, various tax and dividend receipts, improving and training a professional high-quality workforce, etc. Of no less importance, added Itzkowitz, "Intel's decision to continue investing in Israel has strategic importance and serves as a fundamental and significant contribution to Israel's image as a leading country in technological innovation, and serves as an attractive focal point for investors and companies in Israel and around the world. Today is a day of celebration for the growth and empowering of Israel's economy."