Intel Corporation (NASDAQ:INTC) has a factory in south of Israel, and it previously revealed a plan to invest $6 billion for the purpose of up gradation of the chip manufacturing plant. This plan has just won an approval from the finance and economy ministries of Israel, and is going to be the largest single investment made in the country by a foreign company.
Intel getting many incentives
Bloomberg, citing an emailed statement from the Finance Ministry, says that Intel now becomes entitled to receive a government grant worth $300 million over five years. The government has also taken a decision of making applicable a reduced tax-rate on the company for the next 10 years. The company will be eligible to pay corporate taxes at the rate of 5% for the said duration. The ministry further informed that as many as 1000 workers will be employed by Intel by 2023, and the chip maker will be buying Israeli products worth $550 million. The plant is located in the southern town of Kiryat Gat, and has 2500 workers at present.
“Intel’s investment is a strategic asset for Israeli industry,” Finance Minister Yair Lapid said. “This is the largest investment ever by a foreign company in Israel and additional proof that Israel is at the forefront of industrial technology and innovation.”
Much-needed investment for Israeli economy
The Israeli economy is on the decline and hence the government is seeking ways to bring it on the track of development. The major cause for this decline is the huge expenditure made by the government to fund the military operation conducted in July-August against Hamas in Gaza. This has hurt the tourism and also impacted the domestic demand negatively. The growth forecast of the economy for the year 2014 was previously 2.9%, but now has been reduced to 2.3% by the Bank of Israel in view of the above expenditure and loss of demand.
Intel wishes to shift to the new technology known as ‘10 nanometer,’ and for the successful completion of this project the above discussed investment plan has been designed by the chip maker, which it had submitted in the month of May. The plant is going to be the most advanced chip facility in the world as informed by the finance ministry.