The Knesset has recently approved the Knowledge-Intensive Industry Encouragement Law, a groundbreaking legislation aimed at boosting the growth of the Israeli high-tech sector. This law offers attractive tax benefits to investors in Israeli high-tech companies and incentivizes acquisitions and mergers.

1. Tax Credit for Early-Stage Investments: Private investors who support startup companies in their initial phases will be eligible for a tax credit. The credit will be calculated based on the investment amount multiplied by the capital gains tax rate applicable to the investor.

2. Deferred Tax Payment for Shareholders: Shareholders who reinvest part of their proceeds from the sale of a technology company into a startup will enjoy a deferral of tax payments on capital gains generated from the sale.

3. Tax Deduction for Acquiring Companies: Large technology companies acquiring control of other technology companies will have the privilege of deducting the share purchase cost from their tax liability. This deduction will be spread over equal annual installments for a period of five years.

4. Tax Exemption for Lending Income: Income generated from lending to Israeli technology companies by foreign financial institutions will be exempt from taxation.

These benefits are strategically designed to encourage investment in companies during their early stages of research and development. By attracting seasoned strategic investors with valuable expertise, these measures will foster the growth of these companies, particularly in their crucial early stages.

Israel's Knowledge-Intensive Industry Encouragement Law offers attractive tax benefits to investors and incentivizes acquisitions, leading to increased growth and new employment opportunities in the technology industry.