Hotel Development Grant Applications

Entrepreneurs and property owners wishing to establish a hotel, expand an existing hotel or convert a building for hotel use may be eligible for an investment grant under the Law for Encouragement of Capital Investment and Tourism Ministry Procedures. Acceptance of the grant is not automatic: it requires adjustment to the procedure conditions, timely submission, compliance with the planning requirements and physical standards, proof of financial ability and approval of the Tourism Investment Administration.

Our legal service is designed to manage the process for the entrepreneur: from the initial feasibility check, through the route selection and facility classification, to the preparation of the application file, its submission and advising on handling with the Ministry of Tourism.

What does the legal support include?

• Preliminary eligibility examination according to the type of entrepreneur, project location, priority area map and valid procedure instructions.
• Examining the rights to land, the zoning, hotel use and the planning phase of the project.
• Classifying the facility as a hotel, hotel, suite hotel, resort village or hostel and adapting it to physical standards.
• Selecting the appropriate submission route: investment track, building permit track, final work track or conversion and return procedure.
• Concentration and preparation of corporate documents, rights, declarations, approvals and guarantees required.
• Legal coordination with the architect, engineer, accountant, economic advisor and the sponsor.
• Submitting the application, handling the requirements of completion and clarification and follow-up until a decision is made and authorised, to the extent granted.
• legal guidance after approval regarding milestones, changes in plan, reports, prevention of multiple grants and retention of the terms of the authorization letter.

How much grant can be received: 20% or 28%?

Procedure 01/2026 for the establishment and expansion of hotels establishes a basic grant at a rate of 20% of the known investment in the project. Therefore, there is no basis to present 28% as a fixed grant for each hotel. A rate of 28% can only be accepted when a supplementary track or dedicated administrative grant is applied to the project at an 8% rate, by virtue of a specific decision or procedure and subject to their conditions and budget.

The basic grant is also not necessarily calculated from the full cost of the project. The recognized investment is determined by the lower of the recognized investment ceiling, the estimate of the Ministry of Tourism engineer and the scope of the investment requested in the request. For example, if the project costs NIS 30 million but only NIS 20 million is recognized, a 20% grant will be calculated from NIS 20 million and will be NIS 4 million.

Hotel, motel or resort village the main settings

Hotel Rooms

A facility that includes at least 25 accommodation units, at least 80% of which are rooms. The balance can include studio units and suites. Public and service spaces are also required depending on the hotel level and its urban or recreational nature.

Hotel Rooms

A facility that includes between 11 and 24 accommodation units, at least 80% of which are rooms. The facilities allow the hotel a smaller and more flexible scope of public and service space.

Hotel Suites and Hotel Suites

The Suites Hotel has at least 25 units and the Suites Hotel has 11 to 24 units. In both cases at least 80% of the accommodation units are suites, and the remainder can be studio units.

Holiday Village

A facility that includes at least 25 accommodation units, most of which are attached to land, low-density construction, and combined with a supply of sports and recreation activities and public and service spaces.

Hostel

A youth hostel or backpacking hostel is tested according to the designated standards. For setting up a project or extension procedure, an additional 25 new beds are required; at the hotel, an additional 11 new rooms are required.

B&b's with small accommodation units

A facility of up to 10 units is usually defined as a rural or urban accommodation unit and not as a hotel for the purpose of the construction and expansion procedure. It should not be assumed that a guest house, villa or vacation apartment is eligible for the route simply because they are used for tourist accommodation.

Application Tracks According to Procedure 2026

• Track A Investment track: intended for an entrepreneur who holds a full building permit for the submitted project.
• Track B Construction permit track: intended for participation in the expenses of obtaining the permit. The recognized investment ceiling on the track is 8% of the total ceiling, and the grant is 20% of the recognized amount not an 8% hotel rate grant.
• Track C Final Work Track: Designed for an advanced stage project that has completed at least the construction of the skeleton. The known investment for the final works can reach up to 40% of the total investment ceiling, subject to the procedure tests.
• Restitution or conversion: Returning a hotel that is inactive for hotel use or relocating a building from another use to a hotel is examined under a separate procedure and under conditions appropriate to it.

Threshold conditions and key test points

• The applicant is a legal entity that can obtain the status of an approved enterprise under the law.
• The project is in an area that is included in the priority areas map for an attack at the relevant time.
• The applicant has appropriate land rights and the ability to operate the hotel facility for the required period.
• The planning, zoning and use are consistent with hotel activity and the physical standards of the Ministry of Tourism.
• There is financial capacity and equity at the required rate; as a rule, it is required to present an ability to raise at least 20% of the relevant investment.
• The application is supported by a business plan, investment estimate and appropriate planning, engineering and financial documents.
• No multiplication is required for those investment components from another government or public source.

Which documents should be centralised

The corporation's documents and signatures, the shareholders' documents, draft or real estate rights agreement, zoning and permit documents, architectural plans, investment estimate, business plan, financial ability approval, funding sources, statements regarding previous grants and a guarantee in the required version. The exact list varies according to the track and project.

How the treatment is conducted

1. A mapping session and a decision on whether there is initial feasibility for a grant track.
2. Real estate inspection, planning, facility classification and execution phase.
3. Building a list of integrity and division of responsibility between the entrepreneur and the professionals.
4. Edit the legal documents, control the case and submit the application.
5. Responding to clarifications and requirements and advising on towards the management decision and the authorisation letter.
6. Control of the milestones and entrepreneur commitments after approval.

Procedure Status 2026

The usual deadline for submitting applications under Procedure 01/2026 was June 15, 2026 at 12:00 and has passed. The procedure includes a limited mechanism for the application submitted after the deadline, which may allow for an examination of the date of investment recognition if it met the conditions, but requires renewal and completion of the application within the framework of the subsequent procedure and does not guarantee approval or budget. Before making an investment, the current status and the possibility of recognizing it must be checked.

Official sources

• Procedure 01/2026 Assistance in the establishment and expansion of hotels
• The physical devices for planning and classification of tourist storage facilities
• Ministry of Tourism service to apply for an initial investment plan

The information is general and as of the date of the update. The provisions of the law, the order, the priority area map, the procedure and the authorisation writing that are binding on the date of submission are increased. There is no commitment to receive a grant, and each project requires individual legal, planning and economic examination.