This will encourage leading multi-national and Israeli cyber companies to join the national cyber park and establish their activity there.

 Cabinet approves tax break for National Cyber Park

 

Copyright: GPO

(Communicated by the Prime Minister’s Media Adviser)

The Cabinet, at its weekly meeting today (Sunday, 6 July 2014), approved another step in advancing the national cyber park in Be’er Sheva in the form of a significant tax break for cyber companies that move there. This proposal, which was led by the Israel National Cyber Bureau head Dr. Eviatar Matania and Prime Minister’s Office Director General Harel Locker, will encourage leading multi-national and Israeli cyber companies to join the national cyber park and establish their activity there.

Prime Minister Benjamin Netanyahu said, "The State of Israel’s cyber capabilities are a strategic necessity. There is a meeting here between global economic opportunity and strategic need, and we must take determined action to lead in both of these areas. Cyber continues to develop as a main component of our national security and also as an important layer of the Israeli economy. There is great importance in strengthening the cyber park in Be’er Sheva – which combines capabilities designed to maintain and strengthen the State of Israel in the cyber field in relation to the world and thus serves as a unique center of global innovation. Israel is in an excellent place in the market and we must take advantage of this window of opportunity at a time when cyber research and development centers are still being created. We must maintain what there already is, but must also increase our activity in this great market. We are now on the superhighway of competition for the heart of the market – and we must give Israel another relative advantage."

Prime Minister’s Office Director General Locker said, "Tax breaks that focus on encouraging cyber defense companies to go to Be’er Sheva and the south are critical at this stage in which Israel is positioning itself in the cyber field and is competing against other countries for international companies. There is a unique triangle in Be’er Sheva in the cyber field that includes academia, the IDF and the government; to this, today, we are adding an encouragement for the industry."

Israel National Cyber Bureau head Dr. Matania said, "The State of Israel is at an excellent jumping-off point in the cyber field vis-à-vis the rest of the world, which allows us to compete for a significant share of global growth, which is expected to reach $120 billion in the coming years. This is a step that will both strengthen our national security and benefit Israeli industry. The goal is to have thousands of jobs at the cyber park in less than a decade. This decision sends a very strong and unequivocal message to global industry – Israel is the place to invest in the cyber field."

The tax break is designed to attract leading cyber companies and thousands of jobs to the national cyber park in the coming years, with the intention of having 3,000 jobs within a decade (half of the number of people currently employed in the field in Israel). There is great importance in advancing the national cyber park in Be’er Sheva as a center which will combine economic and security strength thanks to a special industry-academia-military ecosystem. Thus Israel will have a relative advantage in the cyber field. There is significant potential for break-through knowledge at the cyber park by encouraging healthy competition between the elements at the site. Government activity is focused on assisting the accelerated establishment of the park as a unique global cluster.

The model for the tax break is based on lowering the cost of employing workers at the park. The break for an employee will be given by reducing the cost of the taxes that the employer must deduct from the employee’s income, and will be limited by this amount (similar to the break for employers as defined by Article 12 of the Eilat Free Trade Zone Law).

Creating a significant number of cyber jobs in Be’er Sheva will allow for local continuity between training and employment, due to the proximity of the industry to the sources of relevant human capital in the area (academia and IDF units). This continuity will allow for maintaining the achievements of the move over time and for expanding employment in the field in the Negev. Attracting many leading companies to a new place requires government encouragement and commitment.

On 23 February 2014, INCB head Dr. Matania briefed the Cabinet on the cyber industry in Israel.