Microsoft is reportedly in talks to expand its operations and invest some $1 billion in Israel, Globes reported this week.
The US giant already announced plans to establish the company’s first cloud region in Israel to deliver services through a local data center. Microsoft is also planning to expand the company’s chips activity in Israel and may set up a development center in the area, according to the Globes report.
The Israeli business daily further cited a recent call between Microsoft CEO Satya Nadella and Prime Minister Benjamin Netanyahu where the planned new investments and expansion were discussed. These should total between $1 billion and $1.5 billion, according to the report.
Nadella is said to have told Netanyahu that Israel was “a very important development center for Microsoft,” amid ongoing talks between senior executives, the Prime Minister’s Office and members of the National Economic Council on the planned investment.
Microsoft benefits from a low tax rate of 6 percent on profits from its IP in Israel, a far cry from the official corporate tax of 23 percent, Globes reported. Smaller tech companies pay between 7.5 and 12 percent.
Microsoft first opened a local branch in 1989, establishing the first R&D center outside the US in the country in 1991. It operates development centers in Haifa, Tel Aviv, and Nazareth, and recently opened a 46,000 square meter campus in Herzliya.
It employs an estimated 2,000 people in Israel.
Microsoft also operates a VC fund and Microsoft for Startups programs in Israel.