Israel Says Foreign Tech Workers Won’t Dilute Jewish Majority

  • Plan to ease limits on skilled workers to boost investment
  • Israel, Ireland vying for tax revenue from patent registration

Israel can admit highly-skilled foreign workers to address a labor shortage in the tech industry without diluting its Jewish majority, said Shai Babad, director general of the country’s Finance Ministry.

The government is looking to ease restrictions on some foreign professionals as it prepares to slash corporate taxes for large tech companies that register intellectual property in Israel, Babad said Friday in an interview at Bloomberg headquarters in New York.

The tax reform, which will be included in the 2017-2018 budget, signals new priorities for Israel as it competes with countries such as Ireland that have lured multinationals with deep tax cuts. The Finance Ministry is also retooling restrictions on highly-skilled foreign workers so it will have the flexibility to negotiate with companies that want to invest in Israel and can’t find enough skilled workers in the local market, Babad said.

No Demographic Effect

“We’re not talking about changing a policy where you’re going to have 100,000, or 200,000 foreign workers coming into Israel,” he said. “But if we’ll have several or more thousand highly-qualified engineers that will be really productive, we don’t see how that’s going to affect the demographics.”

Israel’s vibrant tech scene, which earned it the nickname the “startup nation,” has stagnated in recent years in part because of a shortage of skilled labor. Still, the idea of bringing in foreign workers has made little headway in a country where any sign of diluting a Jewish majority is politically explosive.

The government will work with individual companies to develop “tailor-made” deals to bring in foreign talent, Babad said. Allowances could be made for both foreign and Israeli companies.