A new institutional framework for attracting and more effectively utilizing Foreign Direct Investments is being established by the Ministry of Development, with an emphasis on productive investments of high added value. The bill provides for tax and financial incentives, faster licensing and specific terms for the implementation and monitoring of investment plans.
1. What changes with the new bill for Foreign Direct Investments?
The bill of the Ministry of Development introduces a special institutional framework for the establishment of an Incentives Regime for Foreign Direct Investments. The aim is to create a coherent, clear and comprehensive system for investment plans financed by non-domestic capital and linked to specific qualitative development goals.
The targeting is not limited to the simple inflow of foreign capital into the Greek economy. The new framework seeks to direct this capital into investments with a full implementation and operation cycle, which can create added value, strengthen the country's productive base, productivity and competitiveness and contribute to the diffusion of technology, the outward orientation of production, the creation of new, quality and better-paid jobs.
2. In which sectors will investments be able to be directed?
The Regime is oriented toward activities of high development value and sectors linked to the country's productive transformation.
The potential categories of investments include manufacturing and industrial production, research, applied innovation and artificial intelligence, industrialized primary production, biotechnology, the defense industry and aeronautics. They also include the supply chain and storage, as well as investments in recovery and rehabilitation centers and centers providing nursing home services.
The selection of these specific sectors reflects the direction of the Regime toward investments that can create a substantial development footprint, added value and multiplier benefits for the economy, employment and competitiveness.
3. What is the amount of investments that can be included in the Regime and what are the aid limits?
The bill sets a specific range for the size of investment plans that can be included. The eligible cost of each investment plan must range from 10 million euros to 50 million euros.
At the same time, upper limits are provided for the aid granted. The total amount of aid may not exceed 20 million euros per investment plan.
In addition, cumulative limits are set for aid granted to partner and linked enterprises. For partner enterprises the limit amounts to 20 million euros, while for linked enterprises to 50 million euros.
With these provisions, the aim is the proportional allocation of available public resources and the support of investments of substantial development importance.
4. What are the main incentives provided by the new Regime?
The bill provides for four main categories of incentives:
First, a tax exemption is provided.
Second, a fast-track licensing incentive is provided, with the issuance of approvals and permits within two months from the submission of complete files.
Third, the possibility is provided for the provision of loans guaranteed by the Hellenic Development Bank S.A. for investment plans of small and medium-sized enterprises.
Fourth, facilitation is provided for the granting of residence permits for the implementation of the investment plan and the operation of the investment, as provided for in the Migration Code.
Thus, the incentives are not limited to tax support, but also cover licensing, financing and the facilitation of the establishment or stay of investors and specialized personnel from third countries.
5. How will the annual call of the Regime operate?
The Foreign Direct Investments Regime will be announced once annually by decision of the Minister of Development.
The annual call is not merely an invitation for the submission of applications. It constitutes the basic regulatory tool for the implementation of the Regime, as through it critical issues are specified, such as the intensities and maximum amounts of aid, deadlines, eligibility conditions, the required supporting documents and every other necessary procedural detail.
In this way, the system gains flexibility and can adapt to the prevailing economic conditions and the development priorities of each period, without requiring a new legislative intervention each time.
6. Which expenses can be supported and what restrictions are imposed?
Eligible regional aid expenses are oriented mainly toward investment expenses on tangible assets. These include the construction, expansion and modernization of building facilities, special and auxiliary installations, constructions to ensure accessibility and the landscaping of the surrounding area.
At the same time, the bill introduces quantitative restrictions on building expenses, providing that they may not exceed a specific percentage of the total supported expenses of a regional nature. An increased limit is provided for investment plans implemented in the supply chain sector.
This specific approach aims to direct public aid mainly toward productive investments and technological modernization and to avoid excessive financing of building works that are not directly linked to increasing productive capacity or competitiveness.
7. Which expenses are not eligible?
The bill provides for specific categories of non-eligible expenses. Among these are the operating expenses of the investment, the purchase of furniture and office equipment, as well as other expenses that are not directly linked to the realization of a productive investment.
The logic of the regulation is clear: the Regime is not intended for financing the ordinary operation of a business. It aims to support investments that create lasting productive value, increase competitiveness and contribute to the country's development course.
In other words, the support is linked to the realization of the investment and not to covering the business's ordinary operating needs.
8. How much private financing is required for the realization of the investment?
The cost of the investment must be covered at a rate of at least 40% either by own funds or by external financing. In addition, at least 25% of the eligible expenses must be covered through own resources or external financing that does not contain elements of state aid.
This provision means that public support functions as a real investment incentive and not as a mechanism for the full substitution of private financing by public resources. In this way, the support is linked to actual financial participation in the investment plan and the credibility of the plans included in the Regime is strengthened.
9. How will investment plans be evaluated, monitored and audited?
The proposed arrangements are directed toward the full digitization of procedures, with the aim of legal certainty and transparency at every stage.
The establishment of an Evaluation Committee is provided for as a collective body, which decides on inclusion applications within 90 days. The members of the Committee come from the General Secretariat for Private Investments of the Ministry of Development.
The audit is not limited to the completion of the investment. It is also carried out during implementation, so that progress and compliance with the inclusion terms are monitored.
At the same time, the possibility is provided for certification of implementation at a rate of 50% or 65%, so that the right to begin using the benefit may be established before full completion, provided that a substantial part of the physical and financial object has been implemented. Audits are distinguished into regular and extraordinary.
10. When is the investment considered completed and what happens if it is not completed?
For the certification of the completion of the investment and the start of productive operation, the submission of a relevant certification application electronically is required, no later than within four months from the expiry of the completion deadline.
Completion is not determined only formally. In other words, the implementation of the physical and financial object of the investment is not sufficient. The start of productive operation is also required, that is, the actual activation of the business activity for which the investment plan was approved.
If the entity does not submit the certification application on time together with the required supporting documents, the investment is considered not completed and the inclusion decision is automatically revoked, without requiring further administrative action.
With this regulation, the support is linked to the actual completion and operation of the investment and it is ensured that public resources are directed to projects that are implemented and actually put into productive operation.