Greece’s new, omnibus development law aims to speed up and streamline new investment projects, while offering more targeted incentives for extroversion, innovation, digital transformation and green energy.

Under the law, introduced to Parliament this month, more efficient procedures will be implemented to evaluate new projects within 30 to 45 days. Εqually important, incentives will be grouped under 13 state aid schemes defined by investment category to make disbursement more effective than under prior development laws

The new law specifies the types, content and method of payment of state aid, such as tax exemptions, direct grants, leasing subsidies, employment subsidies and risk financing. It also defines the level of state aid according to the regional or national importance of the project, as well as the maximum amount of aid.

Further, the law identifies the sources of funding for the various forms of state assistance, such as whether the incentives are drawn from national resources or European structural and investment funds.

DEVELOPMENT LAW

The new Development Law 4887/2022, introduces for the first time 13 thematic schemes of state aid and provides different types of incentives for private investments in various sectors of business activity.

In combination with the Regional Aid Map 2022-2027 - in force since 01.01.2022 - which provides increased state-aid percentages for the majority of the country’s regions, the new Development Law aims to increase private investments, to support new entrepreneurship, to strengthen less favoured regions of the country and regions included in the Just Transition Plan, and to improve competitiveness in sectors with a high added value.

Development Law is one of the main available tools the Ministry of Development and Investments deploys to design and implement the incentives policy in order to achieve an integrated and systematic intervention in all industries and sectors of the economy, with obvious benefits for the economic sector, in regional convergence, as well as in social cohesion, along with other available sources of funding (NSRF 2021-2027, Recovery Fund, etc.).

The purpose of enactment of the new Development Law, is to promote the digital and technological transformation of companies, the green transition, the creation of economies of scale, the support of innovative investments, as well as of those which seek the introduction of new technologies of "Industry 4.0", robotics and artificial intelligence. Investments in tourism, processing and agri-food sector are reinforced and also special provisions are included related to the strengthening of the regions of the Just Transition Plan.

In particular, 13 topical schemes are established:

1. Digital and technological business transformation
2. Green transition - Environmental Upgrade for businesses
3. New Entrepreneurship, with the primary objective of supporting young entrepreneurs, to help them proceed with the design and implementation of investment initiatives in various economy sectors
4. Just Transition Plan
5. Research and applied innovation
6. Agri-food - primary production and processing of agricultural products - fisheries
7. Processing - Supply chain
8. Business extroversion
9. Enhancement of tourism investments
10. Alternative forms of tourism
11. Major investments, providing specific treatment for investment projects that significantly affect local economies, as well as the rise of economic sectoral indicators in general
12. European value chains (EVCs)
13. Entrepreneurship 360°.

The schemes will be launched through open calls for investors, while in some cases the partnership of jointly competent policy-making institutions, such as e.g. the Ministry of Rural Development, the Ministry of Environment, the Ministry of Tourism, the Research and Technology sector of the Ministry of Development and Investments will be required. Their implementation will be carried out by the General Directorate of Private Investments of the Ministry of Development and Investments, as well as by the Ministry of Interior (Sector of Macedonia and Thrace) and by the 13 Regional Directorates for specific state-aid schemes.

Each scheme will have an annual budget of 150,000,000 euros, which will be distributed by region and by type of incentive (capital incentives and tax exemptions).

INCENTIVES

The incentives granted are:

1. Tax exemptions
2. Cash Grants
3. Leasing subsidies
4. Subsidy for employment

State-Αid schemes primarily provide that the medium and large enterprises may receive the incentives of tax exemption, leasing subsidy and employment subsidy, while the small and very small enterprises may receive all types of state-aid incentives, including cash grants.

ΧΑΡΤΗΣ ΠΕΡΙΦΕΡΕΙΑΚΩΝ ΕΝΙΣΧΥΣΕΩΝ

Applications for inclusion in the state aid schemes incorporated by the provisions of the Development Law 4887/2022 for the granting of incentives are submitted as follows:

• Investment projects up to onemillion euros (1,000,000€), that are implemented within the boundaries of each region, are submitted before the Directorates of Development Planning (DDP) of the Regions of the Country.

• Investment projects exceeding onemillion euros (1,000,000€) and up to three million euros (1,000,001 € - 3,000,000 €), that are implemented in the Regions of Western and Central Macedonia and Eastern Macedonia- Thrace, are submitted before the Directorate of Private Investments of the Ministry of Interior (Sector Macedonia-Thrace).

• All other investment projects are submitted before the General Directorate of Private Investments of the General Secretariat for Private Investments and Public-Private Partnerships (PPPs) of the Ministry of Development and Investments.