International & Cross Border Capabilities
Prepared by Koutalidis | Law Firm Greece: Opportunities still exist for all kinds of cross-border transactions
Greece as a classic investment destination: Due to its unique geographical position, Greece has always been at the forefront of international and cross-border legal work, traditionally in its maritime and hospitality industry sectors. Greece’s accession to the EU in the early 1980s, together with its participation in most major international organisations, such as the UN and the OECD, as well as Greece’s vast network of bilateral and multilateral international agreements (including numerous bilateral investment treaties), have all helped reinforce investors’ interest in the jurisdiction throughout the years.
Leaving the crisis behind: The fallback resulting from the global economic recession left Greece severely scathed, with heavy GDP losses and reduced investor appetite for Greek projects, augmented by well-established country insolvency fears in 2015. However, through a series of large-scale EU- and IMF-imposed reforms, Greece’s economy remained resilient and was ultimately made more robust, even achieving consecutive positive growth rates from 2017 onwards. This decade-long effort has been further consolidated since mid-2019, when a new, investor-friendly and reformative government, keen on reigniting foreign investor interest in the country, was elected.
A country under reformation: Recent examples attesting to Greece’s new outlook towards attracting new sources of foreign-driven investments include the following: a new corporate governance and alternative investment funds framework was introduced in mid-2020, transposing relevant EU Directives; the commercial brands licensing system was completely overhauled; a new energy law was passed in spring 2020, significantly reducing licensing deadlines and completely digitising the licensing process; the Invest in Greece programme was recently amended, primarily in order to further simplify the licensing of strategic investments; the Greek Citizenship Code was amended, inter alia, as regards the streamlining of the naturalisation process, by reducing bureaucratic inefficiencies; the legal framework for preventing and sanctioning money laundering activities was further strengthened; and new tax incentives were introduced for foreign pensioners and fee earners willing to relocate their tax residence to Greece.
In addition to the above, the current Greek government appears intent on fully digitising the public sector governance – more than 800 public sector-related activities (e.g. issuance of certificates) can now be made solely online (via web browser or mobile app). Moreover, at the end of 2020 5G licences were awarded to all three mobile telephony operators.
These are all on top of a very heavy modernisation process that has been taking place during the last seven years – much of it with the assistance of experts of international institutions.An improving financial environment: The current foreign investor-friendly climate is also further supported by favourable financing conditions. On a macroeconomic level, the current eurozone-wide low-interest environment has reduced Greek Governmental Bond (“GGB”) yields down to unprecedented levels (when compared with previous years). This was also made possible due to the ECB’s GGB waiver, accepting GGBs as collateral in Eurosystem operations. In turn, the all-time lows of GGB yields allow Greek banking institutions and Greek corporates to issue low-yield bonds of their own, thus readily achieving their financing and capital needs.
On a side note, aside from availing themselves of the eurozone resolution framework and overall banking regulation – which both attest to their robustness – Greek banking institutions have managed to steadily purge their balance sheets from large NPL portfolios, most notably by participating in the Hercules scheme – the first ever capital markets-driven systemic solution aimed at tackling the EU-wide NPL issue. Cross-border work related to NPL portfolios sales to foreign investors is currently booming.
Reforms on dispute resolution: Aside from transaction-related reforms, Greece has also strengthened its dispute resolution framework in two main ways: first, the recent overhaul of the code of civil procedure has led, inter alia, to significantly reduced delays in the adjudication of civil cases before Greek courts. Second, litigants are now greatly encouraged to solve their disputes amicably in mediation, given that, in many civil cases, participation in mandatory mediation sessions is an admissibility requirement of later having the case heard in court. Additionally, as regards Greece’s international arbitration framework, a new modern international arbitration bill is currently being deliberated, with the latest draft proposing large-scale arbitration-friendly reforms, based on (and even going beyond) the UNCITRAL Model Law. The new law, together with the already applicable New York Convention, will undoubtedly further strengthen Greek courts’ friendly stance towards international arbitration. In addition to the new law, Greece recently formed a new modern international arbitration institute – EODID. EODID provides a complete platform for institutional international arbitral proceedings, with a modern set of rules and a roster of world-renowned international arbitration practitioners.
Cross-border transaction trends: In view of the above, it is no surprise that Greece is already facing an influx of investments in a multitude of industries. Investors seem particularly interested in real estate, in renewable energy sources and energy-related assets (such as the grid operator), in technology (such as cloud services), in NPLs and new bond issuances, in pharmaceutical hubs, etc. All in all, and despite the Covid-19 situation, the market seems to be developing rapidly.
Role of Greek firms: Against the above background, Greece has a vast array of international and a number of local law firms, capable of catering to international clients in contentious and non-contentious matters, across a variety of industry sectors.
On the non-contentious side, Greek law firms are often involved in high-value international transactions, advising on all civil, commercial, administrative and regulatory/compliance law aspects of M&A deals, privatisations, project financing, project development and licensing, cross-border antitrust cases, international insolvency proceedings, investment planning and corporate (re-)structuring, etc. This is done often in collaboration with some of the world’s largest international firms, which have a long history of productive cooperation with Greek firms.
On the contentious front, Greek law firms regularly represent international clients in institutional or ad hoc international commercial and investment treaty arbitration proceedings – primarily under the ICC, LCIA, SCC, UNCITRAL and ICSID rules – either as lead counsel or local counsel to international firms. Greek firms also represent clients in cross-border antitrust or corruption investigations, most notably by participating in dawn raids and disputing sanctions on an administrative or court level.
By: Nikos Koritsas, Evans Courakis & Dimitrios Andriopoulos