A new framework of incentives for attracting direct foreign investments is being introduced by the government during the summer, so that from September onwards there will be an attractive “package” for foreign entrepreneurs, investors and fund managers. The bill by Development Minister Takis Theodorikakos, expected to go to public consultation in mid-June, establishes a comprehensive mechanism to boost direct foreign investments in key sectors of the Greek economy. The key point is tax exemptions instead of “traditional” subsidies, while the government guarantees that the evaluation process will be the fastest in Europe, setting expectations quite high.
Key changes for attracting foreign capital – The 4 types of incentives
Specifically, according to exclusive information, the new incentive scheme concerns new, direct, foreign investments from 10 to 50 million euros, with maximum aid per company at 10,000,000 euros and maximum aid for a group of connected companies over three years at 50,000,000 euros. The types of incentives will be mainly four:
- Tax exemption: Income tax exemption on profits for up to 15 tax years and up to half of the approved amount annually. The right is established at 50% or 65% of investment implementation.
- Fast licensing: Every license/approval within 2 months. Coordination will be done through the General Directorate of Development Laws and Direct Foreign Investments of the Development Ministry, while if the deadline passes, authority automatically transfers to the Development Minister.
- Loans guaranteed by the Hellenic Development Bank: For small and medium-sized enterprises for short-term or long-term loans through the Guarantee Fund “Development Law Financial Instrument Guarantee Fund (DeLFI GF)”, a new financial instrument created by the Hellenic Development Bank. The General Block Exemption Regulation limits are always observed, the European Union regulation that determines which state aids can be given to businesses without requiring prior approval from the Commission.
- Residence permits for third country nationals: Possibility of granting residence permits to investors and executives, in application of Article 97 of the Immigration Code. The inclusion decision constitutes evidence without further investment evaluation.
The purpose of the new law, which has been under development for months by Mr. Theodorikakos’s team and General Secretary for Private Investments Stellina Siarapi, is multifold. The government aims with the new, more friendly framework to achieve capital leverage, digital and technological transformation of businesses and support for innovative investments and new technologies. Also, strengthening employment of specialized personnel and, simultaneously, strengthening less favored areas, with the ultimate goal of regional convergence. Eligible sectors will be the following: Manufacturing and industrial production. Research, applied innovation and Artificial Intelligence. Industrialized primary production and biotechnology. Defense industry and aerospace. Supply chain – logistics. Health sector – Rehabilitation and recovery centers – elderly care.
Problematic companies will be excluded from receiving the new incentives, those with violations of labor or insurance legislation, as well as companies that refuse the commitment of non-relocation (two years after investment completion). Eligible expenses will be those made for building facilities, for purchasing fixed assets of closed installation (only small and medium enterprises), for new machinery and equipment and for financial leasing rents. Additionally, for intangible assets and specifically for technology transfer, patents, know-how, as well as for software and quality systems (up to 30% for large enterprises and up to 50% for small and medium ones). Mr. Theodorikakos presented the planning and rationale behind it in detail at the last Cabinet meeting, emphasizing that “the goal of all the work we do is to attract investments, bring jobs to Greece, reduce unemployment even more and, simultaneously, ensure that the jobs coming are better and bring back Greek scientific talent, young people who left during the crisis years”
Evaluation & inclusion procedure
Step 01
Application submission
Electronic via PS-An + 1‰ fee
Article 23
Step 02
Evaluation
Immediate evaluation in 90 days + posting on “Transparency”
Article 26
Step 03
Inclusion decision
Within 30 days of positive result
Article 27
Step 04
Implementation, control
Auditor or GDANAXE staff – 25%/50%/65% + Emergency
Article 28
Step 05
Completion
Within 3 years – Production start certification + final aid amount
Article 30
Published in Parapolitika newspaper
