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Establishment of an Enterprise - Aid TracksThe Investment Center at the Ministry of Industry, Trade andLabor operates under the Encouragement of Capital InvestmentsLaw, 5719-1959. The Center encourages the establishment andexpansion of industrial enterprises, hotels and tourism-relatedbusinesses by granting the status of an "approved enterprise" toa scheme of investment in an enterprise provided that it satisfiesthe following conditions: 25% or more of its total income in thetax year from sales to a certain market is from sales to a certainmarket which numbers at least 12 million inhabitants - and alsothe other conditions set out in detail in Section 18A (b) of the Law.The aims for the Investment Center for the grant of "approvedenterprise" status are: advisability in terms of the nationaleconomy, ability to compete in international markets, innovativetechnologies, places of employment, satisfying the State'srequirements. Two benefit tracks exist within the framework of theLaw: the grants track and the tax benefits track.1. The Grants TrackAs part of the grants' track, a corporation is entitled to thefollowing grants and tax benefits in the Negev Region as detailedbelow:The grant is made as a percentage of the investment in fixedassets that is included in the approved scheme and is eligible fora grant. The approved scheme only includes investment in fixedassets, equipment and new buildings, and will be included in the42 < Invest in the Negev and Galileeapproved scheme at the Administration's discretion. Under theLaw and the Investment Center's rules and regulations, approvalcan be obtained to include in the scheme imported second-handequipment that has not become technologically obsolete.Tax BenefitsAn approved enterprise in Development Region A is entitledto 2 years exemption from Corporation Tax and to a reducedlevel of tax during the remainder of the "tax-break" period, onundistributed income. If profits are distributed the owners will beliable for reduced dividend tax and the company will be chargedthe rate of tax it would have paid had it not chosen this track.Amount of the Grants:Industry and Buildings -On an investment of up to NIS 50 Million - 24%On an investment of more than NIS 50 Million - 20%TourismHotels, accommodation and others - 24%Other tourist projects - 15%2. The Benefits Track2.1 Alternative Track ("The Green Track")Benefits on this track are granted to Ltd Companies only or to