Key points of the Investment Incentives Law – Greece

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Key points of the Investment Incentives Law – Greece

Key points of the Investment Incentives Law – Greece

The Investment Incentives Law provides a solid basis for all investors and aims at speeding up the approval process for approved investment projects.

This Law, 4146/2013 “Creation of a Development Friendly Environment for Strategic and Private Investments,” includes several new provisions which are introduced regarding:

A) Provision of Liquidity and Acceleration of the grant disbursement procedures:

• There is the option for 100% advance payment of the grant with a letter of guarantee increased from 50% comparing to the old directive.

• The investor may chose the preferred mix of the Investment Incentives Law benefits (tax-relief or grant) for investments up to € 50 million, to enhance the flexibility of financing for “Small” and “Medium” * investors.

• To enhance both the liquidity of companies and their viability there can be an up-front tax-relief may.

• Investors who apply for the benefits of the Law may cover the requirement for a minimum 25% own capital by using company liquefiable assets.

• There is continuous expansion of the entrepreneurship sectors of to be supported through the Law.

• There is no time limitation for the submission of investment plans. Submissions could be made throughout the year (not only in April and October as did before).

B) Enhancing Transparency and Auditing Procedures of the Investment Law:

• To speed up the immediate closure of pending controls and the payment of any pending installments, the Law dictates thet there can be interim and final audits performed by certified private institutions, such as banks and accounting firms.

• For Photovoltaic Parks approved for grants, in which the rated power differs comparing to the original proposal, with a variance smaller than 10% than the amount approved, there is no obligation for a special request for changing supplier or equipment.

• Due to the economic crisis, the investment plans that have been applied under the Investment Law from 2007 onwards and have been approved can have one more year extension for completing the project.

• The budget for large investment projects that need to be approved by the Greek Parliament is reduced to € 50 million from € 150 million.

The entire application and evaluation process of each investment proposal shall not exceed 6 months.

The Investment Incentives Law of Greece has the target to increase financial liquidity, facilitate investments and secure transparency.

There are seven Investment categories:

1. General Entrepreneurship

It concerns all enterprises irrespective of sector type.

2. Regional Cohesion

It concerns all investors with projects that address local needs or capitalize on local competitive advantages

3.  Technological Development

It focus on enterprises that invest in innovation and want to upgrade their technology infrastructure

4. Youth Entrepreneurship

The target group are investors from 20-years to 40-years old

5. Large Investment Plans

Investments with a budget of at least 50 million Euro

6. Integrated, Multi-Annual Business Plans

Companies legally formed at least five years previous to application, to implement multi-annual (2-5 year) business plans with a budget of at least two million Euro.

7. Partnerships and Networking

Partnerships and networking configurations or clusters. These clusters shall be comprised of at least five enterprises in the Region of Attica and the Thessaloniki Prefecture and of at least three enterprises in other prefectures, operating in the form of a consortium.

How the law assists the investors. The assistance referred to bellow will be aggregated for the objective of determining the total amount of aid allocated to the investment project. The benefit of the funding above is included in total aid, which may not exceed the limits defined on the Regional State Aid Map.

1. Tax relief comprising exemption from payment of income tax on pre-tax profits which come, according to tax law, from any and all of the enterprise’s activities.

2. Payment by the State of a sum of money to cover part of the subsidized expenditure of the investment

3. Can be a payment by the State of a portion of the installments paid under a leasing agreement executed to acquire new machinery and/or other equipment

4. Soft loans by ETEAN (National Fund for Entrepreneurship and Development). The amount to be covered by a bank loan may be funded by soft loans from credit institutions that cooperate with ETEAN enterprises.

Application Procedure for the Investment Incentives Law

a) Online registration at the Information System for Regional State Aid through the web pages www.mindev.gov.gr, www.ependyseis.gr, www.investingreece.gov.gr.

b) Electronic submission of required supporting documents, technical, and financial data. Applicants shall print and keep documents in their possession.

c) Submission of application form and all investment documents (including original documents) to the competent Investor Service Office (open: 09.00 am – 15.00 pm Monday to Friday). All supporting documentation submitted in paper form (hard copy) must also be submitted in electronic form.

Youth Entrepreneurship

It is the first time that young entrepreneurs from 18 to 40 years old, are supported through a special scheme within the scheme of the Investment Law and by employing the resources of National Strategic Reference Framework.

Covering costs

The Youth Entrepreneurship Scheme covers part of the operating costs and leasing costs of a new company for a five-year period, to support new entrepreneurs in their first steps and subsidizes part of the set-up costs.

Provides for additional funding with soft loans through the National Fund for Entrepreneurship and Development

It concerns small and medium-size enterprises occupying with any kind of activity, are established on 1-1-2011 or after as well as businesses which have not completed their establishment process at the time of submission.

The minimum investment required is 150.000 Euros for small enterprises and 100.000 Euros for very small enterprises.

Various types of costs are supported for the first five years following the establishment of the company:

The establishment, organization and operation of the business, any  legal services fees, administrative support and consulting services, that are directly related to the establishment of the business.

Also, interest on external financing at a rate that does not exceed the reference rate, leasing of facilities (office space, manufacturing/production space) and manufacturing/production equipment.

 Energy, water, and heating, as well as administrative expenses and taxes to the Government and the wider public sector, such as council tax

 Salaries of employees under contract, which includes social security contributions

Leasing costs of offices and/or manufacturing/production facilities

The Investment Incentives Law Brochure

More about investment incentives http://www.investingreece.gov.gr

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