New Investment Law 3908/2011
The objective of the New Investment Law is to promote economic development in the country by creating regimes, strengthen investments, which improved entrepreneurship, technological development, business
competitiveness and regional cohesion that promote the green economy, the effective operation of infrastructure availability and the utilization of human resources in the country.
Types of Incentives
The projects that fall under the New Investment Law provide the following types of incentives
· Tax Exceptions on Profits. It must be marked that the tax exemptions incentive constitutes an income tax exemption on profits before taxes as
determined on the basis of tax legislation of the entire business enterprise.
· Targeted Capital Subsidizations, that constitutes the donation from the State funds to cover part of costs of the assisted project and is
determined as a percentage of them.
· Leasing Subsidy that constitutes the financial coverage from the State of the overwhelmed doses of financing hire that is contracted for the
acquisition of new mechanical and remaining equipment and is determined as percentage on this value of acquisition that is included in the overwhelmed doses. The subsidy of financing hire cannot exceed the seven
The above investment projects can be financed with low cost loans from financial institutions cooperate with the National Fund for Entrepreneurship and Development (ETEAN). In this case the benefit from this
funding included in total aid, which may not exceed the limit of the regional aid map.
The above incentives may be awarded individually or in combination.
Eligible Investment Projects
The eligible investment projects are falling into two categories, General Investment Projects and Special Investment Projects.
The General Investment Projects are divided into:
· General Business, for which the tax exception is provided in conjunction with low interest loans from ETEAN.
· Technological Development, which includes investment projects technological modernization of enterprises with the use of technological and organizational innovations, such as systems assurance and
quality control, certification, technology, energy saving projects and research and development and use of specialized scientific and research potential. These investment projects provided the aid of a grant or leasing
subsidy by 80% for existing businesses or 90% for new and the rest filled with tax exception and low interest loans from ETEAN.
· Regional Cohesion, which includes investment projects in productive activities that build local competitive advantages, local needs and address regional problems in an environmentally sustainable
technological applications, introducing energy saving technologies and use of water resources and contributing to environmentally friendly reconstruction, rehabilitation and development areas economic activity. These
investment projects get a grant or leasing subsidy of 70% for existing businesses and 80% for new businesses and the rest filled with exemptions.
The Special Investment Projects are divided into:
· Youth Entrepreneurship. In this category is included the investment projects submitted for the establishment and operation of small and very small
enterprises where at least 50% of the capital is held by individuals under 40 years old who exclusively manage the company.
· Major Investment Projects. This category includes investment projects of at least fifty million euro (50. 000.000). These major projects can receive
one or a combination of all the incentives, on the condition that the capital grant or the leasing subsidy does not exceed 60% of the entire subsidy provided.
· Integrated Long Term Business Projects. This category includes long term (2-5 years) integrated plans for businesses which have been in operation for
at least five years. The business projects must be for a minimum total amount of euro two million (2.000.000) that includes technological, administrational, organizational and business modernization development
costs. Tax exception is provided for this category of investment projects.
· Synergy and Networking. This category includes investment plans submitted by synergy and networking schemes aiming to implement
programs. Such programs must either develop competitive business advantages, or best utilize infrastructure created with the aid of national and European financing, or contribute to the adaptation of specific
and geographically defined productive activities and services towards a modern financial and technological environment.
The New Investment Law excludes investments such as in steel, coal, synthetic fibers, public enterprises and also problematic enterprises as well as specific business sectors such as construction of buildings,
legal and accounting services, production of electrical power from photovoltaic systems, advertising, offshore organizations and agencies.
Additionally, investment projects which still fall under the provisions of the new investment law include those for the establishment, expansion or modernization of three star hotel units or hotel units which are
upgraded to at least three stars. The law also covers investment projects regarding the modernization of hotel units before the expiration of six years from the commencement of operation of the hotel unit or from
the date of issuance of a decision regarding an integrated investment for modernization of the hotel unit. Furthermore, investments in the health tourism sector also still fall under the provisions of the new
Expenses which qualify for the incentives provided by the new law for qualifying investments refer to tangible and intangible assets as well as to Research and Development projects and programs.
The most important provisions are the following:
· Construction, expansion and modernization of buildings, of special and auxiliary facilities and the cost of landscaping. These costs may not exceed 40% of the
subsidized cost of the investment project.
· The purchase and installation of new modern machinery and equipment.
· New leasing rentals of brand new and modern machinery and other equipment whose use is acquired, if the lease includes an obligation to purchase these at the end of
· Intangible assets, such as spending quality assurance and quality control, certification, supply and installation of low interestware and system organization of the
business spending on technology transfer through the purchase of intellectual property, licensing, patents, know-how or unpatented technical knowledge etc. Intangible assets must be depreciable assets used
exclusively in the assisted investment to remain at the premises for at least five years and the cost does not exceed 50% of the subsidized cost of the project.
The amount of subsidy provided to each investment project depends on the size of the qualifying enterprise (investment vehicle) and on the prefecture where the investment plan is implemented. In any case
the subsidy must not exceed 50% of the qualifying cost of the investment plan. On this basis, Greece is divided into three zones based on the level of development of each prefecture.
· Subsidies provided in zone A (prefecture Attica and Viotia) vary from 15% to 25% of the investment depending on the size of the enterprise,
· Subsidies provided in zone B (prefectures with a gross national product exceeding 75% of the country’s average) vary from 30% to 40% of the investment depending on the
size of the enterprise,
· Subsidies provided in zone C (prefectures with a gross national product less than 75% of the country’s average) vary from 40% to 45% of the investment depending on the
size of the enterprise.
Finally, the highest percentages are provided for investment projects implemented in islands and remote areas up to a threshold of 50% of the qualifying investment cost.
Conditions for qualification of the investment plans and evaluation criteria
The New Investment Law has the following characteristics:
· Applications for the participation of investment projects in the new subsidies regime are filed in the months of April and October and at any time for Major
· The beginning of the implementation of the project is made after the publication in the Official Gazette of the applying decision. The beginning of the
implementation of the project before publication in the Official Gazette of the decision to join in, can be done with the sole responsibility of the investor, after the qualification application to the competent authorities to
evidence that the requested assistance is an incentive for an investment project. The beginning of the implementation of the project before the submission of these applications leads to the rejection of the entire project.
· Enterprises which can qualify for the new regime of subsidies, must be established in Greece and have the form of either a sole trader, a commercial
entity/partnership or co-operative and must maintain double entry accounting books or an income and expenses book (category B of the Code of Books and Records).
· The percentage of the investor’s own participation which was provided for by the old investment scheme of Law 3299/2004 is maintained, i.e. 25% of the
subsidized expenses or of the investment cost in case the owner of the investment receives the subsidy of cash grant or the subsidy of tax exeption respectively.
· The minimum amount of the investment is set at EUR 1 million for large enterprises, EUR 500 000 for medium-size enterprises, EUR 300 000 for small
enterprises and EUR 200 000 for very small enterprises.
Especially for investment projects of General Business, the minimum amount of the investment is determined as half of the above mentioned respective amounts.
Terms of payment of the subsidies
The manner in which payment of the cash grants and the leasing subsidies is made as well as the possibility to grant an advance and the assignment of the subsidy is determined by a Presidential Decree which is
to be issued following the proposal of the Minister of Economy, Competitiveness and Shipping.
A new manner in benefiting from the tax exception is provided as follows:
The enterprise may benefit from the tax exception incentive commencing from the financial period in which the decision of completion and initiation of the productive function of the investment is issued.
During this financial period, the highest amount of tax exception provided should not exceed one third (1/3) of the approved amount of the tax exception.
During the following accounting period the highest amount of tax exception, including the tax exception of the first financial period, cannot exceed two thirds (2/3) of the approved amount of tax exception.
The balance of the approved tax exception is used by new enterprises within 10 financial periods and by existing enterprises within eight financial periods, following the financial period within which the decision of
completion and initiation of the productive function of the investment plan was issued.
The tax exception subsidy is retained in a tax free reserve and is recorded in a special account in the enterprise’s books. It is formed based on the “tax” on the net profits declared in the enterprise’s
initial tax return which was timely submitted.
New Investment Law N3908/2011