New Growth "Injection" to the Greek Economy
Banking & Finance | February 2022
NEW GROWTH “INJECTION” TO THE GREEK ECONOMY

The new Development Law 4887/2022 has been published providing a “breath” of growth for the country and henceforth the basic institutional framework regarding the provisions of state aids on private investments in Greece. The objective of this state initiative is the essential contribution of the new Law to the growth of Greek economy.
The new legislative framework predicts the optimization and upgrading of business activities such as tourism, technology, agri-food and energy industry in virtue of the protection and respect towards environmental resources. Within the main targets of this institutional framework are also set the support of innovative investments, the “green” transition, and the digitalization of enterprises whereas the importance of an extrovert national identity is highlighted as well. Towards the achievement of the forementioned objectives, the provision of incentives to professionals of specific sectors is predicted, the mechanisms for the granting of state aids are defined, the investment plans for future funding are determined as well as the specific expenditure categories upon which the enterprises will receive financial aid.


The beneficiaries of the abovementioned financial aids pertinent to the development law, are the investment carriers which were established or maintain a branch in the Greek domain during the time period relevant to the initiation of the investment plan projects and which they hold the type of commercial enterprise, partnership, under establishment of under merger company, joint ventures exercising commercial activity, public and private enterprises as well as their subsidiaries and other. The enterprises which are included in the specific- indicated by Law- legal entity types, are entitled to claim the provided financial aid.


In particular, the types of financial aid, predicted by the New Law, are five and they will be granted to the sponsored enterprises either singularly or combined. Specifically, the predicted sponsorship of enterprises for the coverage of selected expenses regards the investment plan, the granting of financial aid for the leasing of new mechanical equipment, the tax exemption, the subsidization regarding the cost for creative activities which will cover the labor costs for new job positions in the enterprise and the funding of business risk and it is pertinent to the investments under the scheme of “Neo Epixeirin”. The minimum investment height is determined depending on the “nature” of the carrier. The initial amount for smaller enterprises is set at 100.000€ and can reach 1.000.000€ for large organizations. Correspondingly, the percentage of the financial aid is determined proportionally to the size of the company viz. if it regards a smaller, small, medium, or large enterprise, with smaller enterprises being entitled to claim financial aid up to 70%, as per the Regional Investments map which is anticipated to be published.


As it was mentioned above, the subsidization will concern specific selectable expenses regarding the building erection and expansion of new building facilities, the provision of new production equipment as well as auxiliary equipment, the acquisition of intangible accounting assets (software expenditure, quality systems, organizational design systems, expenditure for technology transfer), payroll for new personnel and other. The above refer to the basic aspects of an enterprise and the potential for further development is offered thus responding to the current demands regarding the environment and technology.


It is noted that the significant difference of the current Development Law lies on the fact that the amounts will not be refundable in the long term by the sponsored enterprises, as opposed to other legislative frameworks, based on which the relevant subsidizations had the form of a loan. Furthermore, the strong support of tourism constitutes indisputably a significant part of the institutional framework. Tourism is not only reinforced with percentages ranging form 30% up to 70%. Furthermore, not only is tourism reinforced even for the establishment or/and the expansion of hotel units, the modernization of hotel units and for the facilities of special tourist units but for alternative types of tourism as well, such as agrotourism facilities, wine tourism, camping and condo hotels. 


The analysis of the new institutional framework establishes clearly that the public state remains steadily next to the initiatives for development by supporting and reinforcing it in every legislative “step”. Hence, the implementation of the new investment plans is anticipated as they will provide an additional “breath” to the business and investment profile of the country.


For further information contact us at info@georgakilawfirm.com and communicate with “Georgaki &Partners Law Firm” team of experts.
 

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