Grants for Exporters & Hi-Tech Hit by the Strong Shekel

Category: Incentives & Grants | Reading time: about 6 minutes

Background: why the strong shekel hurts exporters specifically

An exporting company — and a hi-tech company in particular — sells its products and services in overseas markets, so its revenues are denominated in dollars. But most of its expenses, chiefly the salaries of its development staff in Israel, are paid in shekels. When the dollar weakens against the shekel, that same dollar income translates into fewer shekels — while the expenses stay the same. The result: direct erosion of profitability and of the "runway" — the number of months the company can keep operating on the capital it raised. Start-ups that raised capital in dollars saw its shekel value shrink — and sometimes have to weigh a premature, unfavourable raise or painful cuts.

What was issued — the Treasury package and the Innovation Authority track

The Ministry of Finance presented an aid package for industry and export, whose central and practical component is a fast-track relief programme of the Innovation Authority worth roughly ILS 1 billion for start-ups and growth companies hit by the shekel's strengthening. The programme's stated aim is to give companies a "financial bridge" that lets them continue R&D activity without being forced into an early capital raise due to the erosion of dollar-raised funds.

Eligibility conditions — the core

This is the heart of the matter for any company weighing an application. According to the reporting, the threshold conditions include:

• Expenses exceeding revenues in the 12 months preceding the application;
• Annual expenses of ILS 1.5 million to ILS 100 million;
• At least half of the expenses on R&D;
• At least half of the activity conducted in Israel and in shekels;
• the fast track is intended for companies with less than one year of runway — to allow a rapid extension of breathing room.

Additional package components

Beyond the Innovation Authority track, the aid package also includes components for traditional industry and export: about ILS 175 million in grants for advanced machinery and equipment for industry, and about ILS 25 million to support exporters through expanding the activity of the Israel Export Institute and grants. These tools are especially relevant to manufacturers and exporting businesses that are not necessarily hi-tech companies.

Don't confuse it — this is not war compensation

An important distinction: the strong-shekel relief track is entirely separate from the compensation scheme for businesses harmed by the security campaign ("Rising Lion" / Sha'agat Ha'ari). The war-damage compensation scheme operates under a different mechanism (for example, a threshold of a 25% drop in turnover against a base period) and is intended for combat-related damage — not for exchange-rate harm. A business may be eligible for one, both, or neither — depending on the circumstances.

← Read our full guide: Support in obtaining Innovation Authority grants — how it works

What to do now

1. Check the threshold conditions — the expenses-to-revenue ratio, the level of expenses, the R&D share and the share of activity in Israel and in shekels;
2. Prepare for matching — make sure shareholders can back a parallel investment;
3. Assemble the documentation — financial statements, an R&D expense breakdown, and the financial history supporting the application;
4. Act quickly — the budget is limited, and the fast track is designed for those short on time;
5. Verify against the official publication — the exact terms and submission dates are being updated.

This article is provided for general information only and does not constitute professional advice or a substitute for personal advice. Track conditions, budget amounts and submission dates are updated from time to time and should be verified against the official publications. For any question, please contact us and we'll be glad to assist.

Best regards,
Hager-Alperowitz & Co. — Certified Public Accountants