Greece is deploying incentives of up to 20 million euros per investment plan to attract foreign capital to new production units, with emphasis on industry, artificial intelligence, biotechnology, and defense. The new regime covers the creation or expansion of facilities and the diversification of production, while excluding the simple acquisition of shares.
According to a draft law, the public consultation for which was completed during the past week, an “initial investment” may be considered the creation of a new establishment, the expansion of the capacity of an existing establishment, the diversification of production, or a fundamental change in the overall production process. The simple acquisition of shares in a business is not considered an initial investment.
The new framework comes at a time when investments have strengthened, but what remains critical for the Greek economy is the conversion of this momentum into an enhancement of productivity.
This is precisely the point on which the rating agencies are also focusing. The Moody’s records the moderate increase in productivity amid the structural challenges of the Greek economy, although it finds that the growth model is becoming more investment-centric and more supportive of productivity.
At the same time, it notes that private investments accounted for almost two thirds of the 5-percentage-point increase in the investment-to-GDP ratio since 2020. Similarly, Scope points out that, despite the significant acceleration of investments, further evidence is required that they will lead to sustainable gains, strengthen the productive capacity of the economy, and increase the potential growth rate.
Investments from 10 to 50 million euros
Based on the draft law, the eligible cost of investment plans cannot be lower than 10 million euros nor higher than 50 million euros. The total amount of aid per investment plan cannot exceed 20 million euros.
The aid to each entity, including cooperating or affiliated businesses, cannot cumulatively exceed 20 million euros for an individual business and 50 million euros for the total of cooperating or affiliated businesses, over a period of three years.
The regime includes investment plans in sectors such as manufacturing and industrial production, research, applied innovation and artificial intelligence, industrialized primary production, biotechnology, the defense industry and aeronautics, logistics, as well as specific health and social welfare activities.
The eligible expenses include expenses for building facilities, the purchase and installation of new machinery and equipment, as well as intangible assets, such as technology, operating licenses, patents, know-how, and software.
Not eligible, among other things, are operating expenses, office furniture and utensils, passenger cars with up to six seats, and the purchase of plots, land parcels, and agricultural plots.
The incentives and the timetable
The draft law provides for tax exemption, acceleration of the licensing process, the possibility of financing through loans guaranteed by the Hellenic Development Bank, and facilitations for the granting of residence permits linked to the implementation and operation of the investment.
Each entity participates in the cost of the investment plan with own, non-domestic capital or external financing. Own capital must amount to at least 40% of the total cost. At least 25% of the eligible expenses must be covered through own resources or external financing that does not contain elements of state aid.
The required licenses or approvals for the execution of works, the installation, or the operation of the investment, including spatial planning permits, are expected to be issued within two months from the submission of a complete file. If the prescribed deadline passes, the draft law provides, under specific conditions, for the possibility of transferring the relevant competence to the Minister of Development.
The minister may issue or reject the license with justification within one additional month, provided that the competences of other ministries are not affected. In the event that supplementary information is requested from the investor, the time required for its submission is not counted in the two-month deadline.
As regards the evaluation of the investment plan, it begins from the date of submission of the application for inclusion. The Evaluation Committee must submit its report within 90 days. The evaluation and inclusion in the regime do not replace the Foreign Direct Investment screening under Law 5202/2025. For investment plans falling within the scope of that specific law, the issuance of the inclusion decision is subject to the completion of the relevant procedure.
The call decision may specify the evaluation criteria and methodology, the required supporting documents, the scoring indicators and their weighting, as well as the minimum score required for the inclusion of an investment plan. An evaluation guide for investment plans is also provided, with the control methods, standard costs, and relevant instructions.
For the audit of investment plans, provision is made, among other things, for the possibility of using a certified auditor-accountant or audit firm selected by the investment entity. Through the relevant report, the implementation of 50% or 65% of the investment project, as well as the completion and start of productive operation, may be certified.