Greece: Subsidized Projects In Greece – Investment Law N. 4399/2016

Last Updated: 8 November 2018
Article by Katerina Christodoulou and Dimitra Karampela

General requirements of eligibility The law introduced a variety of incentives in order to achieve economic development and attract foreign investments in Greece. The main goal of the Law is to support existing companies, create new innovative businesses and support less developed geographic areas or geographic areas with a high migratory flow. The law covers investment projects that relate to a vast majority of economic sectors.

Investment projects subject to the provisions of the Incentives Law are banned from other aid schemes, unless an exemption is expressly stated by the law. The total budget for the year 2016 is 150.000.000 euros.

The aid beneficiary may participate to the cost of the investment project either through own funds or external financing provided that at least 25% of the total investment cost does not contain any state funding or state support.

There are minimum thresholds of project values for each type of enterprise. So, if the aid beneficiary has or is going to start a large enterprise, the minimum threshold is 500.000 euros. For medium sized enterprises, the minimum threshold of investment project is 250.000 euros. For small enterprises, the amount is 150.000 euros whereas for very small enterprises, the amount is 100.000 euros. Also, for the social cooperative enterprises, the amount is 50.000 euros.

Content of investment projects and categories of the investment law- aid schemes

According to the new law, the investment projects should involve one of the following: a. creation of a new business unit, b. extension of the capacity of an already existing business unit, c. diversification of the output of a business unit into products not previously produced, d. fundamental change of the total productive procedure of an already existing unit and e. acquisition of all fixed and plant assets of a business unit that has been closed provided that the investor is not related with the seller. #

The aids available by the law differentiate depending on the investment scheme. The schemes are the following: a. General Entrepreneurship, b. New Independent SMEs (Small-Medium Enterprises-companies), c. Mechanical equipment, d. Major investments, e. Investments of an innovative character concluded SMEs, f. Clusters, g. Financial Intermediaries-Investment Fund and h. Integrated Regional and Sectoral Projects.

Types of state subsidies and financial support The law provides that there are certain number of state subsidies and they include the following:

a. Tax exemption: This type of financial support means that the participant and investor is not going to pay any taxes for the profits (after income payable on distributions to owners) earned by the total business activity under the Greek tax legislation. The amount of tax exemption shall be calculated as a percentage over the value of the aided expenditure of the investment project or the value of new machines and equipment acquired under a leasing agreement.

b. Subsidy-capital grant (government funding): Cash provided in order to cover eligible costs and expenses. This financial support can come up to 70% of the maximum aid allowed and 100% of the maximum aid allowed if the investment project is going to be executed in specific areas specified in the law ( e.g. islands of Northern Aegean with intense refugees; flows)

c. Subsidy of leasing in order to facilitate the purchase of new equipment and only if it does not exceed a 7-year period. The subsidy of leasing consists of the payment by the state of part of the rentals paid under the leasing agreement for the acquisition of new machines and other equipment. The subsidy will be calculated as a percentage on the acquisition value of the equipment.

d. Subsidy of costs regarding new employment positions: This type of subsidy cannot be provided cumulatively with other types of aid.

All types of aids aid can be provided separately or combined.

It is to be noted that the total financial aid by the State for an investment project cannot exceed the amount of 5 million euros.

Types of costs that can be subsidized eligible cost of the investment project

It is to be noted that not all expenditures and costs can be covered or be subsidized by the State under the law. The eligible costs include the following: a. Investment expenses or costs by the sale of tangible and movable goods (These expenses can relate to the construction of a new building structure, expansion or upgrade of existing building structures, by the purchase of movable goods or by the purchase or installation or upgrade of technical structures), b. the purchase of the all assets (buildings, machinery and other equipment), related to a production facility provided that a number of conditions specified in the law are met, c. investment expenses or costs related to the acquisition of intangible goods and d. payment of salaries of the business's employees.

It is to be noted however that costs for the purchase of the land in which the building structure is going to be constructed or renovated are not covered by the aids. Similarly, in the case of the purchase of an existing building structure, the value of the land not going to be covered as a cost by the State. Also, operational costs of the business and costs for the purchase of cars (up to 6 seats) or office equipment and furniture (unless they are necessary as hotel equipment) are exempted from the law.

Who can apply

Only companies that are established in Greece or they operate a branch office in Greece are qualified. More specifically, the following companies can apply: a. Sole traders, b. Commercial companies (companies under formation or under merger are also qualified provided that they have completed the publication procedure for the incorporation or the merger prior to the launch of the investment project), c. Cooperatives and social cooperatives companies, d. Joint ventures only if they have General Electronic Commercial Registry (GEMI), e. Public and municipal companies subject to certain conditions listed in the law.

Procedure

In order to participate to the tender for subsidies, the participant must submit an application as well as all related documents through the State electronic system. It seems that the whole procedure involves two mandatory steps. First, the participant must apply electronically and then he must submit his investment project and all related documents.

The evaluation of the investment project includes several steps. The steps are the following:

a. The authorities examine whether the application is complete and if all documents and information has been given by the participant.

b. The authorities then examine if the application is in accordance with the law and whether necessary equity and financing is available.

c. The third step of the evaluation is when the authorities evaluate the investment project and the reasonability of the expenses thereof that can be subsidized, as well as the viability of the investment project.

d. The last step is when the authorities rank the applications on the basis of a comparative table of all applicants. Applicants can raise objections against the ranking table. Some of the criteria of the evaluation are the following:

  • Liquidity of the investor before the investment (only with regard to existing companies)
  • Financial feasibility analysis of the investor after the investment
  • Increase of employment positions and particularly of specialized staff (if the investment creates new employment positions) § Available own funds (if financing is not opted).
  • Characteristics of the investor and the investment project (ex. exploitation of buildings that have not been used for a long time).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions