Factory (stock)
Factory (stock)iStock

The Israeli Cabinet on Sunday approved a proposal by Prime Minister Naftali Bennett and Economy and Industry Minister Orna Barbivay to reduce bureaucratic red tape on factory construction.

The plan is expected to cut the average construction time for a new factory in Israel from 4-5 years to just two years.

The first licensing and permits center of its kind in Israel will be established and reduce the time necessary for issuing permits by 50% .In the framework of its activity, the center will identify impediments and deal with them.

The time for issuing a construction permit will be reduced from two years to three months (for 30% of applications).

"This is wonderful news for the planning and construction sector in Israel. In order for the economy to grow and prosper, the state needs to allow business owners to run forward and to bother them as little as possible," Bennett said. "Entrepreneurs are the living spirit and we need to assist them, not hinder them with unnecessary and complicated procedures. For years, the state made these connections more difficult. Now we are opening the cork and taking another step for the business sector in Israel."

Minister Barbivay said the move would allow industry to compete 'fairly' and would lead to economic growth.

"Improving the business environment and reducing the regulatory burden is a national goal designed to significantly shorten timeframes in order to allow industry and the business sector to compete fairly and lead the economy to growth. I welcome the ability to convene this complex project, which is based on cooperation between the Economy and Industry Ministry, the Prime Minister's Office and the Interior Ministry."

The decision is the product of the work of the inter-ministerial committee led by the Economy and Industry Ministry and the Prime Minister's Office, together with the Planning Administration and other professional elements.

Under the current situation, building a factory in Israel takes four-to-five years due to a complicated process involving various permits from dozens of government agencies and local authorities, in addition to locating available land for industry. In the framework of the committee's activity, the difficulties facing entrepreneurs in building or upgrading factories were analyzed: Locating and allocating land, statutory planning and receiving construction permits.

The decision includes a pilot in the framework of which the first licensing and permits center of its kind will be established in northern Israel. The activity of the center is expected to reduce the time necessary for issuing construction permits for new and existing factories by 50%.

The center will employ designated personnel who will be specially allocated for the endeavor and who will include representatives of the Environmental Protection Ministry, the Fire and Rescue Authority and IDF Home Front Command in cooperation with the local committees on behalf of the Federation of Local Authorities. This is a unique model that combines all government and local authority elements in order to cooperate and work together in a manner that puts the entrepreneur at the center and saves him maximum time and effort vis-à-vis the various elements, reduces unnecessary costs, provides certainty and shortens timeframes. This unique model will also identify impediments in the process for issuing construction permits for industry and recommend solutions to the relevant elements.

An additional significant endeavor being promoted in the framework of the reform is advancing regulations for exemptions for industrial construction permits. Regulations for exemptions will shorten the time for issuing construction permits for several defined projects from two years to a mere three months, for approximately 30% of applications in industry.

The decision also includes a policy document on the detailed planning for industrial zones, which focuses on resolving widespread impediments in industrial planning in Israel, with emphasis on environmental regulation, adapting statutory planning to – inter alia – construction licensing and transportation requirements. A regular working team will also be convened to improve and oversee land, planning and construction issue for industry, to be comprised of representatives of the Economy and Industry Ministry, the Israel Land Authority and the Planning Administration.