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IMPACT – MEDIUM
What is the change? Israeli government offices will close March 30-April 8 for Passover, suspending visa and work permit processing during the holiday period. Israeli consulates may also close or limit their hours.
What does the change mean? Applicants with time-sensitive applications should file them as soon as possible and anticipate delays when offices reopen.
BAL Analysis: Companies and individuals applying for visas and work permits should factor the holiday break into their plans. Those applying abroad should contact the relevant Israeli consulate for individual holiday schedules.
This alert has been provided by the BAL Global Practice group and our network provider located in Israel. For additional information, please contact your BAL attorney.
Copyright © 2018 Berry Appleman & Leiden LLP. All rights reserved. Reprinting or digital redistribution to the public is permitted only with the express written permission of Berry Appleman & Leiden LLP. For inquiries please contact copyright@bal.com.
What is the change? The Israeli government has clarified the criteria it will apply to determine if a company qualifies for the new Hi-Tech, or HIT, visa.
What does the change mean? When a company registers with the registrar, the Central Statistics Bureau classifies the company. The Innovation Authorities then request this confidential information from the Bureau and review certain corporate information to determine if the company qualifies as a high-tech company.
Business impact: Companies will be considered based on funding, tax exemptions or public listing from the Innovation Authorities, or based on which industry they are in or based on their R&D costs. Israeli registered companies will be considered based on various factors, mainly on which industry sector they are in.
Background: The HIT visas, introduced through regulations earlier this year, are available only to visa-waived nationals working for high-tech companies registered in Israel. The visas are processed in six days and allow the employee’s spouse to work, although details are not yet clear.
If an Israeli-registered company has received either monetary funding, a tax exemption or a public listing on the Tel Aviv Stock Exchange as an R&D company from the Innovation Authorities in the last three years, it will qualify as a high-tech company.
If it has not received any of those benefits from the Innovation Authorities, it will still qualify if it is in one of the following industries: pharmaceutical product manufacturing, manufacturing of computers and components or electrical or optical components, computer programming/consultation/related services, research and development (not including social sciences), manufacturing of aircrafts or space ships and their components, or IT processing and data storage.
A company that does not qualify based on the above criteria may still be eligible as a high-tech company if its R&D costs exceed 7 percent of its overall sales turnover in the previous calendar year or if at least 15 percent of its employees work in R&D.
BAL Analysis: The clarifications are a welcome development that should help companies determine if they may qualify to use the new HIT visas. The relevant authorities will make the actual determination of whether a company qualifies when the visa application is submitted for a company under the HIT process.
What is the change? Israel has introduced a new long-term and multiple-entry business visa for Indian national businesspersons.
What does the change mean? Israeli consulates in India will be able to issue multiple-entry B-2 visitor visas, valid for up to five years and allowing up to 90 days per stay.
Background: The visas will apply to Indian businesspeople who are visiting Israel to develop their business. The permitted business activities include “participating in business meetings, engaging in negotiations, investing in Israel, buying or selling Israeli companies, participating in conferences and conducting market research.” The sponsoring company must be active and registered in the Indian Company Registrar for at least six months before the filing date of the B-2 visa application.
BAL Analysis: Indian national businesspersons may take advantage of the longer validity visas immediately. They are reminded that productive work of any kind is prohibited on the B-2 visas and would require a work visa. Prohibited activities include, for example, supplying products, providing services or serving as the company’s permanent representative in Israel.
What is the change? Israel has moved to provide new immigration incentives for high-tech companies bringing foreign experts to Israel.
What does the change mean? Companies that are recognized as “Hi-Tech Companies” by Israel’s Innovation Authority will be eligible to sponsor workers on a type of B-1 work visa called a High Tech Visa, or HIT Visa. The visas will initially be valid for one year and will be processed in six working days. Spouses of HIT visa holders will be eligible for general work authorization for the duration of the principle visa holder’s stay.
Background: The changes took effect under a set of regulations recently published by Israel’s Ministry of Interior.
Under the regulations, nationals of visa-waived countries working for hi-tech companies will be eligible for HIT visas, which will be processed in six business days. Visa applicants will be eligible to enter Israel immediately once their application is approved. The visa must then be processed in the employee’s passport at the Ministry of Interior within two business days of the employee’s entrance into the country. Authorities will review any previous stays in Israel in order to ensure compliance with all of the country’s immigration laws. The visas will be valid for one year, extendable for an additional five years and three months. Sponsoring companies seeking this route must pay the foreign employee at least 19,604 shekels (about US$5,570) gross per month, which is double the average salary in Israel.
The regulations also call for providing employment authorization to spouses of HIT visa holders. Spouses of HIT visa holders will be eligible for EAS visas if the HIT visa holder will be working in Israel for more than 90 days. Spousal visa duration will be tied to the principle visa holder’s work authorization and will allow spouses to work for any employer in Israel. There are no prevailing wage requirements for EAS visa holders. Applicants and their spouses will be required to be physically present at the Ministry of Interior for visa processing. It is anticipated that EAS visas will also be available to qualifying domestic partners, but this is not yet clear from the regulations.
BAL Analysis: While the steps are positive developments for high-tech companies in Israel, the new regulations are still unclear on some points, mainly in relation to spousal visa applications. BAL also continues to seek information about how companies can qualify as high-tech. BAL will provide more information to clients as it becomes available.
What is the change? Israel has increased its minimum prevailing wage requirement for foreign experts from 19,086 shekels to 19,604 shekels (about US$5,735) gross per month for 2018.
What does the change mean? The increase affects B-1 foreign experts, but does not affect foreign workers on short-term authorization permits or STEP visas.
Background: Israeli officials recently announced the new prevailing wage for foreign experts. Employers may include the following when calculating employee wages: gross salary, unconditional per diem payments, unconditional monthly relocation compensation, unconditional monthly international travel allowances, unconditional monthly bonuses and other unconditional monthly payments. Bonuses or other payments that are conditional on job performance or other factors cannot be included. Foreign nationals working in Israel under short-term authorization permits or STEP visas are covered under the minimum salary levels announced earlier in January.
BAL Analysis: Companies are required to meet the new 2018 prevailing wages for B-1 foreign experts immediately and should identify affected employees and adjust salaries accordingly.
What is the change? According to Israeli press reports, the Ministry of Interior is planning several changes to improve and speed work-permit processing for foreign workers in the high-tech industry.
What does the change mean? Among the changes, a streamlined online application process will be introduced for high-tech companies that are preapproved by the Innovation Authority. Additionally, the ministry will ease other rules for the high-tech sector, such as allowing work authorization for domestic partners of high-tech experts and allowing up to 500 foreign students to work without meeting prevailing-wage requirements.
BAL Analysis: The steps are positive developments for high-tech companies in Israel. BAL will update clients when more details are announced.
Copyright © 2017 Berry Appleman & Leiden LLP. All rights reserved. Reprinting or digital redistribution to the public is permitted only with the express written permission of Berry Appleman & Leiden LLP. For inquiries please contact copyright@bal.com.
What is the change? Israel raised its 2018 minimum gross monthly salary from 5,000 Israeli new shekels (about US$1,450) to 5,300 shekels, effective Jan. 1.
What does the change mean? The increase directly affects the salaries of foreign employees on SEA/STEP visas who must be paid the minimum gross monthly salary. Foreign employees working on a B-1 work permit must be paid twice the average salary (to be announced later this month).
Background: In addition to the increase in the minimum gross monthly salary, the government announced it will not change the minimum mandatory pension payments of 6 percent for employees. The employer contribution will remain at 6.5 percent. The government also announced that processing fees for 2018 will be slightly higher than 2017. The new government fee for a B-1 work visa will be 9,675 shekels (not including fees paid to the Ministry of the Interior’s Work Permit Unit).
BAL Analysis: Companies should plan for the new salary minimums for SEA/STEP visas for 2018.
What is the change? Israel has launched a new program that will allow foreign entrepreneurs to obtain Innovation Visas.
What does the change mean? Interested foreign entrepreneurs may now apply for visas by submitting applications to one of 12 organizations – called “landing pads” – which will host successful applicants and help them get started on their projects. Those who are able to successfully launch a company in Israel could then become eligible to obtain extended work authorization at the end of the initial period.
Background: The program, called the Israeli Innovation Visa (IV) program, is being piloted for a three-year period. The application process will work as follows:
Entrepreneurs who create companies and receive support for extended work authorization from the Innovation Authority will be able to seek expert visas valid for up to five years and three months in total.
BAL Analysis: The program is designed not only to provide qualifying foreign entrepreneurs a relocation path to Israel, but also guidance as they navigate the country’s high-tech sector. The program is being piloted for three years, and Israeli officials hope it will help cement the country’s reputation as a top destination for foreign entrepreneurs interested in technical innovation.
What is the change? Israel’s parliament, the Knesset, approved a law last week to allow Jewish heritage immigrants (Olim) to obtain passports immediately upon arrival in Israel.
What does the change mean? Effective immediately, Olim coming to Israel under the Law of Return will be able to obtain passports immediately upon arrival. Previously, Olim had to reside in Israel for a year before they could be issued a passport.
Background: The Law of Return allows for all Jewish heritage immigrants to reside and apply for citizenship in Israel, regardless of their nationality. Until recently, however, this group of immigrants had to make Israel their primary place of residence and had to reside in the country for at least a year before they could obtain passports. The Knesset gave final approval last week to legislation allowing Olim to apply for and obtain passports immediately upon arriving in Israel, even if it is not their primary country of residence.
BAL Analysis: The change will make foreign travel from Israel easier for newly arrived Olim and will be particularly helpful to those who still have family or business interests abroad.
What is the change? Israel has published new regulations on work visas for foreign nationals working on large- or medium-scale projects that require specific technological or mechanical expertise.
What does the change mean? The new regulations were written to streamline processing and to establish a means for determining what types of projects require foreign nationals with specific technological or mechanical expertise who would not otherwise qualify for work visas. The new regulations allow for the waiver of a key salary requirement to enable companies to bring such workers, mostly blue-collar skilled employees, to Israel. Few details were released, however, on what projects will qualify.
Background: The application process for the work visas described have some similarities with the process for obtaining a regular B-1 work visa. Employers will be required to submit separate written applications for each foreign employee. Applications should include a project description and an explanation of the employee’s expertise, skills and knowledge.
Israeli companies contracting with foreign companies to complete a project must also provide copies of the contracts they have with their foreign partners.
The normal requirement that companies pay foreign workers double the average Israeli salary will be waived for workers coming to Israel via this route. Employers will be required, however, to meet other employment standards and conditions, including providing an employment contract, adequate housing and medical insurance, among other requirements. Foreign nationals must be directly employed by the foreign employer and cannot be third-party employees or freelancers.
BAL Analysis: While the new program offers the potential to help Israeli companies in need of project-related technological or mechanical expertise, some key details remain unavailable at this point and it may prove difficult for private sector company projects to qualify for this visa route. Those interested in the program should contact BAL at least eight months ahead of a project’s start date to allow for BAL to determine if this option will be available and to allow for adequate planning and time for visa processing.