The Israel Innovation Authority (the “IIA”) has released long-awaited directives which allow the licensing of IIA-funded technology outside of Israel. The IIA was set up in January 2017 to replace the Office of the Chief Scientist of the Israeli Ministry of Economics and to administer government grants extended to Israeli companies under the Law for the Encouragement of Research and Development in Industry – 1984.  Previously, the existing law only allowed the full transfer of ownership to foreign entities rather than licensing. This will allow Israeli companies to partially monetize their intellectual property, while continuing to be the owners of the same, will still being eligible for further grants to further develop the same technological platform for other applications.  All such transactions (licensing and sale) are subject to the prior approval of the IIA’ s research committee and trigger repayment of the grants plus penalties calculated on the basis of various formulas. While previously payments to the IIA were due in one lump sum upon the transfer of ownership in the technology, the new directives allow for repayment pro rata to installments received from the licensee, subject to various limitations.