Expected Regimes

The Ministry of Development is planning the targeted creation and modification of support regimes under the Development Law to transform and strengthen the country’s production model. These regimes will contribute to the development of strategic sectors, increasing productivity and innovation. Their announcement is expected in the near future, as it depends on the availability of financial resources and the country’s fiscal capabilities.

The expected regimes are as follows:

• Expected Soon – “Manufacturing & Supply Chain” (3rd Cycle)

The program is expected to launch soon with a budget of 150.000.000€, aiming to support investment activities in these specific sectors. It will fund investment plans related to manufacturing—excluding the processing of agricultural products, which falls under a separate regime—and the supply chain sector.

This support will cover various areas of development. It will include technological upgrades, with investments in new technologies related to production and process management. There will also be support for administrative and organizational improvements to enhance management efficiency and operational structure. Additionally, the program will promote innovative development through investments in new, cutting-edge solutions that will strengthen competitiveness. It will also support outward-looking growth by encouraging exports and expanding into new markets.

This regime is among the most mature for announcement and is expected soon.

• Modified Regime: “Support for Large Investments”

This regime supports investment projects exceeding 15.000.000€, with a focus on innovative projects that utilize modern technology and have a low energy footprint. Incentives primarily include tax exemptions, partial grants, and financial leasing subsidies. Additionally, it provides fast-track licensing and site allocation for investments. According to Law 4887/2022, investment projects under this regime must have a total eligible expenditure exceeding 15.000.000€. However, projects falling under the following support regimes are excluded:

1. Agri-food, including primary production and the processing of agricultural and fishery products.
2. Support for tourism investments.
3. Alternative forms of tourism.

• New Regime: “Support for Border Regions & Thessaly”

This regime supports investments exceeding 2.000.000€ million in border regions and Thessaly, with a total budget of 150.000.000€ million. It covers areas from Epirus to Evros, Thessaly, and the North Aegean islands. The goal is to strengthen local economies through strategic investments across various sectors, including tourism, industry, and other fields that drive growth and employment. To encourage investments, the regime offers a range of incentives, including grants, tax exemptions, and fast-track licensing and site allocation. These incentives aim to attract capital and accelerate the implementation of investment projects, providing a developmental boost to regions facing isolation and the need for economic growth.

• Modified Regime: “Modern Technologies”

Merger of the Existing “Digital Transformation” and “Research & Applied Technology” Regimes.

The decision to merge these two regimes aims to finance investments in critical sectors such as Information Technology (IT), Artificial Intelligence (AI), Technology, and Biotechnology. This consolidation was deemed necessary following the successful implementation of programs such as Technology Transfer Funds, Incubators, and Business Accelerators. These initiatives have generated a significant flow of investment projects, creating opportunities for further growth and strengthening these sectors. The merger represents a strategic move to enhance innovation, support technological advancements, and unlock new opportunities for businesses and investors alike.

Key Expected Changes and Improvements

The Development Law is one of the key tools supporting entrepreneurship in Greece, boosting investments in critical sectors of the economy. Its aim is to create a favorable environment for business development by offering financial incentives and simplified procedures. A review of the law is planned for the near future, with the goal of improving its functionality and addressing issues that have arisen during its implementation.

The upcoming revision of the Development Law will focus on three main pillars:

• Simplification of Procedures with Reduced Bureaucracy and Faster Investment Approval

The new changes aim to simplify processes by reducing bureaucracy and accelerating investment approvals. The requirement for submitting a certification report from a member of the Economic Chamber will be abolished, and modifications to investment plans will only be examined if they involve substantial changes. Notifications regarding changes in the business address, shareholder structure, or company name will be submitted once before the investment certification, while changes in contact details will only require simple updates.

• Transparency and Oversight

To ensure transparency and effective oversight, a Register of Certified Auditors will be created under the Hellenic Accounting and Auditing Standards Oversight Board (ELTE). This will allow audits to be conducted by independent and accredited professionals, helping to avoid conflicts of interest.

• Abolition of Automatic Extensions

Automatic two-year extensions for investments upon completion of 50% of the project will no longer be granted. Extensions will only be provided for clearly defined reasons, including cases of force majeure. This modification is expected to also apply to unfinished projects under previous development laws that have been receiving automatic extensions up until now.

New Conditions and Evaluation Criteria

• For investments in industry and manufacturing, failure to meet employment-related obligations will no longer result in full disqualification of the project. Instead, specific penalties will be imposed.
• Applications for inclusion will be submitted to entities designated by each call for proposals, and new investment programs will be centrally managed by the Ministry of Development, rather than by regional authorities.
• The incentive for covering labor costs will be abolished. This intervention comes after instances where labor-intensive businesses, having received relevant support, later halted their investments.
• Emphasis will be placed on the sustainability of investments, with businesses contributing more equity capital receiving higher scores, as this indicates a stronger commitment to the project.
• The creation of jobs will carry greater weight in special support regimes (such as those for border region manufacturing).
• ESG (Environmental, Social, and Governance) criteria will be introduced for all investment plans.
• Each business will be allowed to submit only one investment plan per cycle of the support regime.

The implementation of all these changes depends on the completion of the new information system, which will manage the process of receiving, evaluating, modifying, and completing investment plans. Its operation is expected to be completed by March, ensuring the effective application of the revised Development Law.

Eligible Businesses & Participation Conditions

Businesses and organizations that are established or have a branch in Greece at the start of implementing their investment plan are eligible for inclusion in the Development Law support regimes. Specifically, eligible entities include:

• Commercial companies (SA, LLC, PCC, GP, LP)
• Cooperatives and collective forms of entrepreneurship, such as:
• Social Cooperative Enterprises
• Agricultural Cooperatives
• Producer Groups and Producer Organizations
• Urban Cooperatives
• Agricultural Corporate Partnerships
• Companies in the process of establishment or merger, provided they complete the publicity procedures before starting the investment project.
• Consortia engaged in commercial activities.
• Public and municipal enterprises and their subsidiaries, provided that:
• They do not serve exclusively public purposes.
• They are not exclusively assigned state services.
• Their operation is not subsidized by public funds during the long-term obligations under Article 22.
• Individual enterprises, limited to the regime “Agri-food – Primary Production and Processing of Agricultural Products – Fisheries and Aquaculture”, with a maximum eligible investment cost of 200.000€.

Type and Amount of Support

The intensity of the support is determined based on the regional aid map and is as follows:

Implementation Duration

The duration of the implementation of investment plans depends on the aid scheme under which they are included. Generally, the completion deadline for an investment plan is up to three (3) years from the date of issuance of the approval decision.

Eligible Expenses and Character of Initial Investment

The Development Law requires that investment plans have the character of “Initial Investment,” meaning that all expenses should contribute to new or substantially upgraded business activities. This means that a business can be supported if it meets one of the following conditions:

• Creation of a new unit
• Expansion of the capacity of an existing unit
• Diversification of production into new products or services
• Fundamental change in the production process

Investment Expenses in Tangible Fixed Assets

These refer to the construction, upgrading, and procurement of fixed assets for the supported business:

• Buildings & Infrastructure: Construction, expansion, or modernization of building facilities and special auxiliary installations. Adjustments for people with disabilities and improvements to the surrounding area. These expenses cannot exceed 45% of the total eligible expenses (with exceptions for listed buildings, greenhouses, etc.).
• Purchase of Existing Fixed Assets: Includes buildings, machinery, and equipment under certain conditions. The business that owns them has ceased operations. There is no relationship between the buyer and the seller. The purchase is made on market terms and without prior subsidy.
• Equipment & Machinery: Purchase and installation of new, modern equipment, including machinery, technical installations, and transport vehicles that operate within the business.
• Financial Leasing: Financial leasing of equipment, provided that the equipment will be transferred to the lessee’s ownership after the contract ends.
• Modernization of Special Installations & Mechanical Equipment: Expenses for upgrading specialized installations that are not related to buildings.

Investment Expenses in Intangible Assets

These relate to the development of innovation and the upgrading of business processes:

• Technology Transfer: Purchase of know-how, patents, intellectual property rights, exploitation licenses, etc.
• Digital & Organizational Modernization
• Quality certifications, software procurement, and business management systems.

Submission and Evaluation of Funding Applications

Detailed information will be available in the announcements when they are published.

For further details on Development Law, other available funding opportunities, or any support related to the planning and implementation of your investment projects, please do not hesitate to contact us at 231 0 552000 or 210 9580000, or via email at [email protected].