The employment of foreign experts in Israel has been regulated since 2001 in accordance with the principles that were outlined by the Buchris Committee and implemented as part of a designated procedure of the Population Authority[1] (hereinafter: the “General Experts Procedure“). The unique treatment of a “foreign expert” (as opposed to an “ordinary” foreign worker) was required due to globalization, changes in the global labor market and local employers’ increasing need to employ foreign subjects who possess special expertise.

A new procedure was recently published by the Population and Immigration Authority[2] (the “Procedure” or the “High-Tech Procedure“) and it prescribes “beneficial arrangements” – more lenient procedural tracks for arranging the employment[3] of foreign high-tech experts by high-tech corporations; Additionally, the Procedure prescribes a (precedent-setting) arrangement that allows granting a work visa to the spouse of a foreign expert who is employed in the high-tech field[4]. This memorandum shall describe the provisions of the Procedure in a nutshell.

Threshold Requirement: A “High-Tech Company”

In order to benefit from the Procedure’s beneficial arrangements an employer must meet the threshold requirement of being recognized by the Innovation Authority as a “High-Tech Company”, in accordance with a designated procedure[5] that it published and which essentially prescribes that a company shall be recognized as a High-Tech Company for this purpose if at least one of the following (alternative options) holds true:

  1. During the three years preceding the submission of the application, the employer received one of the following: A grant on behalf of the Innovation Authority in the framework of one of the benefit tracks specified in the relevant procedure; an Innovation Authority approval for the purpose of a tax benefit by virtue of tax laws; an approval regarding the company being an R&D company for the purpose of its issuance on the Tel Aviv Stock Exchange;
  2. During the five years preceding the submission of the application, the employer received an approval regarding it being a corporation with income from research and development for a foreign resident[6];
  3. The employer is a corporation that is classified by the Central Bureau of Statistics as belonging to one of the following economic activities[7] (activity no.): manufacture of pharmaceutical products and homeopathic pharmaceutical preparations (21); manufacture of computer, electronic and optical products (26); computer programming, consultancy and related activities (62) (except the sub-activity of other information technology and computer service activities); scientific research and development (72) (except the sub-activity of research and development in social sciences and humanities); manufacture of air and spacecraft and related machinery (303), data processing, hosting and related activities; web portals (631);
  4. An employer who meets all of the following cumulative conditions, subject to the approval of the CEO of the Innovation Authority that was granted in the framework of an appropriate application: it is an Israeli corporation, registered in Israel, that acts pursuant to Israeli law; it is not a foreign company or a public benefit company; the applicant’s R&D expenses, according to generally accepted accounting principles, exceeded 7% of the sales turnover in the calendar year preceding the submission of the application, or at least 15% of all of the employees employed by the employer are research and development employees.

An employer that was so recognized as a High-Tech Company[8] by the Innovation Authority shall be entitled to submit applications pursuant to the following beneficial arrangements:

  1. Procedure for Expedited Handling for Periods of up to One Year – For an Employer that was Recognized as a High-Tech Company

“The Expedited Procedure”:

The “Expedited Procedure[9] is intended to arrange the employment of employees who are needed in order to perform a temporary and provisional assignment, for periods which shall not exceed 45 days (in the aggregate) during a calendar year, and it is meant to address the need to arrange such employees’ entry and stay within short periods of time; the Expedited Procedure does not specifically address experts in the high-tech field or in High-Tech Companies.

The uniqueness of the procedure is the quick handling periods and the elimination of some of the procedural requirements that are required when submitting permit applications under the General Experts Procedure. The Expedited Procedure enables, among others:

  • Expedited handling (6 working days from the date of submission of all of the documents);
  • Online submission of the application;
  • Exemption from submitting certain document and approvals;
  • Exemption from need to receive a B-1 work visa in the country of origin prior to arrival.

However, arranging an expert’s employment under the Expedited Procedure requires meeting threshold requirements, including:

  • That the expert is a citizen of one of the countries whose citizens are exempt from a pre-arranged B-2 visitor visa under the Entry into Israel Order (this being a central and fundamental condition);
  • That the expert is physically outside of Israel when the application is submitted. If an application is submitted regarding a foreigner who is physically in Israel, the application in his matter shall be rejected immediately;
  • That it is prohibited to submit a corresponding application under the General Experts Procedure;
  • That the period of employment shall not exceed 45 days (in the aggregate) in a calendar year.

The Beneficial Arrangement that was prescribed in the High-Tech Procedure:

The High-Tech Procedure expands the provisions of the Expedited Procedure and allows an employer that was recognized as a High-Tech Company to submit an application to employ a foreign expert in the research and development field or to employ a foreign expert who possesses unique expertise that assists business activity that is related to a product or a service that is developed by the company, while modifying the provisions of the Expedited Procedure that relate to the following matters:

  • Contrary to the Expedited Procedure – under the High-Tech Procedure – such applications can be submitted for a period of up to one year each time.
  • The High-Tech Company is required to undertake that the foreign expert’s salary during his entire period of employment in Israel shall be no less than the “Experts Salary” (twice the average wage in the market, at terms prescribed in the Procedure).

Other than that stated above, the other threshold requirements and limitations that apply in the Expedited Procedure shall also apply in the case of this beneficial arrangement.

The continued handling of the visa application under this beneficial arrangement shall be in accordance with the Expedited Procedure, and essentially as follows: Upon receipt of the permit, the expert shall be permitted to enter the country. Within two working days he shall be required to appear at the Population Authority Bureau and present documents as prescribed in the Procedure. A foreign expert whose employment was permitted under the High-Tech Procedure is also permitted to request a multiple-entrance visa for the duration of the permit (“Inter-Visa”) when necessary, subject to payment of an appropriate fee.

  1. Employing a Foreign Academic Graduate

An employer that was recognized as a High-Tech Company shall be able to submit an application to employ a foreign subject who completed a full academic degree at an institution of higher education in Israel, in one of the following fields: Electrical Engineering, Electronics, Computers, (including Software Engineering, Information Systems or Computer Sciences). The following rules shall apply to the beneficial arrangement:

  • The permit shall be valid for a period of up to 12 months from the date of entitlement to the degree;
  • There is no requirement to pay the foreign academic graduate a salary that is twice the average wage in the market;
  • No more than 500 permits shall be concurrently granted for the employment of academic graduates under this Procedure, and this quota shall be distributed in accordance with the order of submission of applications that meet all of the required conditions;
  • The permit application shall be submitted online;
  • The graduate shall be able to exchange the license by virtue of which he is currently in the country with a B-1 work license and visa at the Population Authority Bureau also without leaving the country;

Towards the end of the term of the permit and license under this beneficial arrangement (no later than 12 months from the date of entitlement to the degree), the High-Tech Company shall be permitted to submit an online application to the Permits Department for a permit to employ the foreign graduate as a “Foreign Expert (High-Tech)” at an Experts Salary, in accordance with the Population Authority’s ordinary procedures in this matter.

The other ordinary provisions and rules that apply in accordance with the General Experts Procedure – shall apply to applications pursuant to the High-Tech Procedure.

Permitting a Foreign Expert to be Employed at a High-Tech Company for a Period Exceeding 90 Days and Granting a Work License to a Spouse

An employer that was recognized as a High-Tech Company is permitted to submit an application to employ a foreign expert for a period exceeding 90 days in the research and development field, or to employ a foreign expert who possesses unique expertise that assists business activity that is related to a product or a service that is developed by the company.

By allowing this, the High-Tech Procedure in fact expands the General Experts Procedure and recognizes a new category of “experts” whose employment in Israel can be arranged.

The rules that apply to the submission and handling of the application are identical to those practiced according to the General Experts Procedure, except for the possibility of filing the application online (and of course – the requirement that the company be recognized as a High-Tech Company – by means of attaching an appropriate affidavit and an examination by the Innovation Authority).

Spouses of experts whose employment was arranged by the High-Tech Procedure shall be entitled to receive a “General B-1” work and stay visa and license, which permits them to work for any employer in Israel without such employer being required to obtain a permit to employ them or being subject to the twice the average wage requirement.

An application for such visa and license shall be submitted to the Population Authority Bureau, in the presence of both spouses, and is subject to the presentation of approvals and documents as specified in the High-Tech Procedure. The application shall be exempt from an annual fee payment, and similarly to any application for visa and license – shall be subject to the discretion of the Population Authority’s personnel and to examinations of matters that could prevent approving the application.

It was further prescribed in the High-Tech Procedure that a High-Tech Company which is a foreign or international company which received a permit to employ a senior employee in a position that requires a high level of personal trust, pursuant to the recommendation of the Foreign Trade Administration at the Ministry of Economy, in accordance with the General Experts Procedure and would like the arrangement regarding the granting of a visa and license to a spouse to apply thereto, may approach the Permits Department which will handle their application.

The procedure is currently at an experimental stage and is valid for 12 months from the date of its publication.

We of course would be happy to be at your disposal should you request additional information regarding this matter and would be happy to assist in all aspects of employing foreign workers in the high-tech field pursuant to the new procedures

 

[1] Procedure for Handling Applications for Employment Permits and Work Licenses for Foreign Experts – No. 5.3.0041. (Link to Procedure in English).

[2] Experimental Procedure for Handling High-Tech and Cyber Companies’ Applications to Employ and Arrange the Status of Foreign Experts in Israel – No. 5.3.0043 (Link to Procedure (in Hebrew)). The procedure shall be valid for a period of 12 months, unless extended, and it is prescribed therein that if it shall not be extended, this shall not prejudice the validity of permits, visas and licenses that were granted by virtue thereof.

[3] Receiving a permit for the employer to employ and arranging a “B-1” work and stay license and entry visa for the foreign expert.

[4] To such end, relevant regulations were recently promulgated in the framework of Temporary Provision: The Entry into Israel (Exemption from Permit to Grant a Stay License and Visa to Categories of Foreign Workers) (Temporary Provision) Regulations, 5778-2018, which was published on February 8, 2018.

[5] Procedure for Recognizing a Corporation as a High-Tech Corporation for the Purpose of Bringing a Foreign High-Tech Expert (The Population and Immigration Authority’s B-1 Work Visa), dated December 12, 2017 (Link to Procedure (in Hebrew)).

[6] As per the definitions of the Encouragement of Capital Investments Law, 5719-1959.

[7] As per the Uniform Classification of Economic Activities for 2011.

[8] It is clarified that the corporation shall be recognized as a “High-Tech Company” subject to the submission of an appropriate affidavit together with the main application (no preliminary application for recognition as a High-Tech Company or other preliminary action is required).

[9] Procedure for Expedited Handling of Applications to Employ a Foreign Expert who is a Citizen of a Visitor Visa Exemption Country who is Invited to Israel for a Period of up to 45 Days per Year, no. 5.3.0040, which was last updated on December 19, 2016 (Link to Procedure (in Hebrew)).

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