GREECE: An Introduction to Corporate/Commercial

Economic Conditions, Investment Trends and Developments

The Greek economy maintained its development dynamic during 2022, despite inflation pressure and negative consequences from the Russian invasion in Ukraine. Greece is being transformed to an investment and entrepreneurship-friendly environment, seeing the biggest improvement amongst 81 countries over the last three years according to the Economist Intelligence Unit.

Reforms in key areas have been the spearhead of this effort, including the digitisation and digital transformation of the state, employment, public administration, justice, tax (administration, compliance, policy and evasion fight) and energy. Two key efforts deserve to be highlighted: the constant and rapid digitisation of the public sector has significantly improved the environment in which entrepreneurs and legal advisors operate; and a boost in the number of digital transactions with the public administration marks a shift in the battle against bureaucracy. In parallel, a decrease in labour and capital taxes, combined with the establishment of special tax regimes to attract non-tax residents, has strengthened existing investments incentives.

This structural improvement is already being rewarded, as foreign direct investment into Greece is expected to meet historic records for both foreign direct investment in Greece and exports, and investments are expected to be increased at a high rate during the next three years, supported by banks' liquidity and available EU funding. There have already been more than 100 investments under the Greece 2.0 National and Recovery Plan, and EUR19 billion grants and EUR13 billion loans are expected during the period from 2021 to 2026.

A number of flagship investments stand out, including Microsoft data centres, AWS local zones, Google data centre regions, Pfizer digital and services hubs, the Ellinikon project, Orfium digital rights music management, the Volkswagen “Smart & Sustainable Island” project in Astypalaia island, the Viva Wallet acquisition by J.P. Morgan (Greece’s most widely reported unicorn) and the Instashop acquisition (the largest Greek start-up deal). These are paired with a number of important privatisations, as well as public-private partnerships.

In addition, venture capital and private equity financing are at a quite mature stage. A new ecosystem of start-ups has been developed and is being systematically supported, together with SMEs, by the State. Indicatively, the Hellenic Development Bank of Investments has consistently invested to funds supporting, among others, start-ups and SMEs, innovation and the green economy, whereas the Hellenic Development Bank has been very active in applying innovative financial instruments, delivered by financial institutions to SMEs.

At the same time, Greece places particular emphasis on achieving sustainable development and is committed to implementing the 2030 Agenda for Sustainable Development and its 17 Sustainable Development Goals (SDGs). There has already been a significant increase in enterprises that submit ESG data, according to the Athens Exchange ESG indicator.

New Development Law 

Law 4887/2022 was passed in February 2022 and entitled "Development Law – Greece Strong Development". It aims to accelerate new investment projects by introducing more efficient procedures for their evaluation, while offering more targeted incentives. To this end, the law provides for much shorter evaluation and approval periods, and grants incentives for specific activities and sectors rather than horizontally, as per previous regimes.

The law introduces 13 thematic aid schemes, each focusing on specific sectors of the economy, that support new entrepreneurship, highly skilled employment, extroversion, digital and technological transformation, innovation and green energy. Furthermore, the law aims 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. Each scheme will have an annual budget of EUR150 million, to be distributed on a region/type of incentive basis.

Beneficiaries are entities (commercial companies, agriculture producer co-operatives, joint ventures, companies in establishment or merger procedures, public and municipal companies, and personal companies under certain conditions) that are established or maintain a branch in Greece at the investment plan commencement date.

Each beneficiary may participate in the cost of the investment project (by equity or external financing), provided that at least 25% of the total investment cost does not contain any State aid, public support or subsidy. Incentives include tax exemptions, direct grants, leasing subsidies, subsidies for costs incurred to create employment, and risk financing. Eligibility thresholds are defined by the beneficiary’s size. Medium and large enterprises may receive incentives of tax exemption, leasing subsidy and employment subsidy, while small and micro enterprises may receive all types of incentives.

The new law defines the level of aid according to the regional or national importance of the project, as well as the maximum amount of aid. The total amount of aid per investment plan submitted may not exceed EUR10 million. The aid granted to each single enterprise may not exceed a cumulative EUR20 million, or EUR30 million for a group of enterprises.

Competition Law Modernisation 

Law 4886/2022 was passed on January 2022 and transposed Directive (EU) 2019/1 of the European Parliament and of the Council of 11 December 2018, introducing both procedural and substantive amendments to the Greek Competition Law (Law 3959/2011).

The main amendments relate to the introduction of a new type of infringement (namely the invitation to collude and price signalling between competitors) and the extension of the Hellenic Competition Committee’s (HCC) powers concerning the imposition of and immunity from fines, and its information collection powers in the context of its newly established authority to undertake “mapping exercises” and the increased scope of the settlement procedure, the leniency programme, the non-enforcement letter and the modernisation of the methods used to investigate commercial conduct, introducing advanced investigating tools as algorithmic methods.

Furthermore, with respect to merger control, a significant innovation is the possibility for conditional clearance in Phase I, which allows the parties to offer remedies within 20 days from their notification to address any concerns raised by the HCC relating to the transaction’s competitive impact. This was possible only during a Phase II investigation under the previous regime.

Changes in the Greek Civil Code 

Law 4967/2022 has been in application since September 2022 and integrates into Greek law both (EU) Directive 2019/770 relating to contracts for the supply of digital content and services and (EU) Directive 2019/771 relating to contracts for the sale of goods; it also amends several provisions of the Greek Civil Code and Law 2251/1994 on Consumers’ Protection.

Article 513 et seq of the Greek Civil Code was amended to include the sale of goods with digital elements, and to regulate these transactions in a uniform manner, regardless of the status of the contracting parties as traders or consumers.

The new provisions of the Greek Civil Code also introduce the concept of “conformity” of the goods to the provisions of the contract, as well as subjective and objective conditions for the good to be perceived as “conforming”. Consequently, the new article provides not only for the warranty liability of the seller, but also an obligation to deliver an asset that complies with the provisions of the contract. If the seller’s liability is established, the buyer is entitled to: demand restoration of the good; reduce the price; withdraw from the contract; demand compensation for the damage not covered by the exercise of the foregoing rights; or ask for compensation for non-performance of the contract instead of the above-mentioned rights.