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Greece Opens the Door to Foreign Capital: Inside the New FDI Incentive Scheme for EUR 10–50M Projects

27 minutes ago
3 min read

Greece just raised the bar for foreign capital. A landmark new bill tabled in Parliament by the Ministry of Development introduces a dedicated Foreign Direct Investment (FDI) incentive scheme targeting projects worth between EUR 10 million and EUR 50 million. With four distinct incentive tracks — tax exemption, fast-track licensing, state-guaranteed loans, and residence permits — the legislation signals a serious, structured bid to make Greece a regional investment hub.

Why This Bill Is Different

Unlike previous development laws that offered broad, one-size-fits-all incentives, the new FDI framework is laser-focused on productive, high-value investments. It sets a hard minimum threshold of EUR 10 million, requires at least 40% equity financing from non-domestic sources, and caps the maximum eligible cost at EUR 50 million per project. All incentives are fully aligned with EU State Aid rules under the General Block Exemption Regulation (GBER 651/2014), giving investors the legal certainty they need.

Key Developments: Four Incentive Tracks

  1. Tax Exemption: Full exemption from corporate income tax on profits, proportional to subsidised expenditure. The benefit is earmarked in a special reserve account and cannot be distributed during the 6-year post-completion compliance period.

  2. Fast-Track Licensing: Every required permit — including spatial planning approvals — must be issued within two months of submitting a complete file. If the authority fails to act, the Minister of Development steps in directly.

  3. HDB Loan Guarantee: SMEs within the scheme can access short- or long-term financing backed by the Hellenic Development Bank through the DeLFI Guarantee Fund.

  4. Residence Permits: Fast-track residency for third-country national investors and key personnel under Greece's Immigration Code (Law 5038/2023).

Eligible Sectors

The law targets sectors where Greece has untapped competitive potential: Manufacturing, AI and Applied Innovation, Biotechnology, Defence Industry and Aerospace, Supply Chain and Logistics, Healthcare Rehabilitation Centres, and Social Care. Notably, biotech and AI are listed side by side with logistics — a pragmatic acknowledgement that Greece needs to attract capital across the spectrum, from deep-tech to infrastructure.

Market and Business Perspective

For accountants and tax advisors, the key compliance challenge is the tax exemption reserve. Once activated — after certifying 50% or 65% completion — the benefit can be used over up to 15 tax years, but the reserved amount is frozen during the 6-year long-term obligation period. Distribution or capitalisation before the period ends triggers full clawback plus statutory interest. Annual compliance reporting, external auditor certification, and a 20% random sample audit regime mean that this is not a passive incentive — it demands active governance.

Why It Matters

Greece has long underperformed relative to its EU peers in attracting FDI in high-value manufacturing and tech. This bill addresses the structural barriers head-on: bureaucratic licensing delays, absence of tailored financing for foreign entrants, and lack of clarity on residence rights for executive teams. The Climate Investment Covenant provision — linking the incentive framework to sustainability targets — also positions the scheme within Europe's green industrial transition, making it eligible for enhanced EU regional aid intensities.

Key Takeaways

  • Eligible investment range: EUR 10M – EUR 50M per project

  • Maximum grant per project: EUR 20M

  • Minimum own equity (non-domestic): 40% of total cost

  • Evaluation: completed within 90 days of application

  • Annual call: once per year by Ministerial Decision

  • Post-completion obligations: 6 years of active compliance monitoring

Closing Insight

The new FDI framework is arguably the most structured investment incentive Greece has introduced in years. For businesses considering a Greek footprint, the message is clear: move early, size your equity contribution correctly, and engage advisors who understand both the domestic procedural landscape and the EU State Aid compliance requirements. The first annual call will be the critical test — and the window between now and then is exactly the right time to prepare.

Source: taxheaven.gr | Read the full article here: https://www.taxheaven.gr/news/74697/

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