The government plan to encourage Israeli institutional investors to invest in domestic venture capital funds came into effect today. The joint plan of the Ministry of Finance and the Ministry of Industry, Trade and Labor offers government participation in the risk of investing in venture capital funds. NIS 200 million has been allocated for the plan.
The ministries believe that the new plan will boost investment in Israeli venture capital funds by Israeli institutional investors by NIS 800 million over the next two years. The government will back 25% of the institutional investors' in venture capital funds.
Ministry of Industry director general Sharon Kedmi said, "High-tech industry is Israel's growth engine, and contributes to keeping Israel's competitive advantage in the world. Implementation of this plan will foster exports and create jobs."
The Ministry of Finance said that the plan would greatly boost investment in venture capital. "Investment in Israel's high-tech industry will grow," said Accountant General Shuki Oren.
The plan supplements the amendment to the Law for the Encourage of Capital Investment in R&D, which also comes into effect now. The law provides breaks in the company tax, especially for high-tech companies in the periphery and national priority areas. Ministry of Finance director general Haim Shani once said that market competition was "brutal" and that there was no alternative to offering incentives for companies to cope with it.
In a separate development Avi Hasson today replaced Dr. Eli Opper as Chief Scientist. Hasson, 40, has held senior positions at Gemini Israel Funds for the past ten years. Opper, who served as Chief Scientist for eight years, will continue to chair the European Eureka Network for Market Oriented R&D, which Israel is heading in 2010-11.
Published by Globes [online], Israel business news - www.globes-online.com - on January 2, 2011
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