The provisions of Law 89/1967 as amended by the recent development law allow companies established in Greece of Law 89/1967 to provide services to Greek companies with which they belong to the same group.
This means in practice, that international groups having such offices in Greece and providing services to other companies in the group, will now be able to do business in Greece as well.
Key Benefits of Companies of Law 89/1967:
(a) their taxable profits accrue as a fixed percentage of their expenses
(b) the profit margin of their intra-group transactions is approved in advance by the Ministry of Development
(c) their foreign staff shall be taxable only for income derived in Greece
(d) aid for the costs of new staff, the costs of installing information and communication systems, and aid for the recruitment of disadvantaged workers and persons with disabilities
This law is one of the most widely available tools for attracting foreign investment in Greece, as it allows foreign and domestic groups to set up in Greece an organized “Administrative Services Center”, in accordance with the standards of overseas Shared Services Centers.
The operation of such a Center in Greece consists of providing administrative support (eg research and development, quality control, advertising, accounting support, consulting services) to the headquarters or businesses of the same group abroad.
The Ministry of Development is considering adding other support services (eg supply chain supervision, legal support, logistics, etc.) to the already permitted categories, to make the status of Greek Administrative Services Center even more functional and directly competitive with their foreign counterparts.
Eligible for support costs are the wage costs over a maximum period of twelve (12) months of the employee recruitment, who:
Recruitment should serve the new activity and lead to an increase in the number of employees of the enterprise concerned in relation to the average of the 12 months.
The aid consists of a subsidy of wage costs by providing a sum of money to cover part of it and the aid rate is 50% of eligible expenses paid. The company may not receive for the same workers any other aid on the salary costs of the period of the first twelve (12) months from the recruitment of each.
The company may receive aid for up to 100 employees and gross earnings are eligible for aid expenditure, for a period of up to twelve (12) months from the hiring of each employee, and up to the amount corresponding to gross salary, maximum of 2,000 euros per month.
The aid is granted for programs organized by the legal person for the training of staff in relation to the new activity. No aid shall be granted for training undertaken by companies to comply with the required national training standards.
The following costs of vocational training programs are eligible for aid, up to the total amount of 500,000 euros:
The aid consists of subsidizing the costs of the training program by providing a sum of money to cover part of it and the aid rate is 50% of the eligible costs.
Expenses eligible for aid are:
The aid intensity is up to fifty percent (50%) of the eligible costs.
The aid consists of a subsidy on wage costs and subsidize the cost of purchasing the hardware and software by providing funds to cover part of them and the aid rate is 50% of the eligible costs which may not exceed in total 400.000 €.
The aid granted in this category, summed with other aid granted by the State, cannot exceed two hundred thousand (200.000) euros over a period of three (3) financial years.
This category of aid is granted to companies falling within the scope of this Law for the purpose of providing research and development services. The aided part of the research and development project shall completely fall within one of the following categories as they are defined in the above Regulation: industrial research, experimental development, feasibility studies.
The research and development expenditure eligible for aid relates to a specific category of research and development and is as follows:
The aid intensity of the eligible costs shall be up