New Business – Development Law 4887/2022

The programme

The purpose of this scheme is to support young entrepreneurs active in specific sectors of the economy and to cover the costs of setting up companies and carrying out research activities, as well as the costs of implementing initial investments.

Investment projects for activities which fall within primary production, primary production, the processing of agricultural products , in fishing , research and applied innovation, research and digital and technological transformation , in manufacturing and supply chain , and are to be implemented by Micro and Small Enterprises in the process of being set up, in the corporate capital of which only natural persons participate who:
a) have no previous participation in companies, with the exception of holding shares of companies listed on the Athens Stock Exchange (AEX),
b) have no previous business activity and c) meet the income criteria specified in the relevant notices.

Who it concerns

The scheme applies to investment projects for activities which fall within the scope of primary production, agro-processing, fisheries, research and applied innovation, digital and technological transformation, manufacturing and the supply chain, to be implemented by Micro and Small Enterprises in the process of being set up, in the corporate capital of which only natural persons participate who:
a) have no previous participation in companies, with the exception of holding shares of companies listed on the Athens Stock Exchange (AEX),
b) have no previous business activity and c) meet the income criteria specified in the relevant notices.

Investment projects must have the integrated character of an initial investment.

Initial investment:

• The investment in tangible and intangible assets in connection with the creation of a new business establishment, the expansion of the capacity of an existing business establishment, the diversification of the production of a business establishment into products that have never been produced in it, or the fundamental change of the entire production process of an existing business establishment.
• The acquisition of assets belonging to a business establishment that has closed or would have closed had it not been purchased and which is purchased by an investor unrelated to the seller and excludes a simple acquisition of the shares of a business.

In the present scheme δύναται να υπάγονται και επενδυτικά σχέδια που δεν πληρούν την προϋπόθεση του ολοκληρωμένου χαρακτήρα αρχικής επένδυσης εφόσον αυτά περιλαμβάνουν δαπάνες, οι οποίες εντάσσονται στις εξής κατηγορίες δαπανών:
a. aid expenditure on access to finance for SMEs
b. investment aid expenditure for SMEs
c. spending on research, development and innovation,
d. expenditure on environmental protection,
e. expenditure on vocational training,
f. expenditure on consultancy services for SMEs
G. innovation expenditure in SMEs
H. start-up costs for newly established small and micro enterprises
I. expenditure on energy efficiency measures
J. expenditure on recycling and reuse of waste
K. costs for high-efficiency cogeneration from Renewable Energy Sources (RES) and the production of energy from Renewable Energy Sources
L. the costs of remediation of contaminated sites
 

Επιλέξιμες επιχειρήσεις

Eligible are companies that are established or have a branch in Greek territory at the time of commencement of the investment project and have one of the following forms:

• trading company,
• cooperative,
• Social Cooperative Enterprises (SPs) of 4430/2016 (A 2015)), Agricultural Cooperatives (AC), Producer Groups (POs), Agricultural Corporate Partnerships (ACPs) of Law 4384/2016 (A 78),
• companies being formed or merged, with the obligation to have completed the disclosure procedures before the start of work on the investment project,
• joint ventures engaged in commercial activity
• public and municipal enterprises and their subsidiaries, provided that:
  • they are not entrusted with the service of a public purpose,
  • they are not exclusively entrusted by the State with the provision of services,
  • δεν επιχορηγείται η λειτουργία τους με δημόσιους πόρους για το διάστημα τήρησης των
    μακροχρόνιων υποχρεώσεων του άρθρου 22.

Μη επιλέξιμες επιχειρήσεις

The following are not eligible and are excluded from aid under this scheme:

• undertakings which are subject to pending aid recovery proceedings at the time of the submission of the investment project application (Deggendorf principle),
• firms in difficulty, as defined in paragraph 18 of Article 2 of the General Tax Code (Article 1(4)(c) of the General Tax Code),
• enterprises which, during the two (2) years preceding the submission of the application for aid, have relocated to the business premises where the initial investment in respect of which aid is requested will take place or have not undertaken not to do so within a period of two (2) years after the completion of the initial investment for which aid is requested,
• enterprises implementing investment projects carried out on the initiative and on behalf of the State, on the basis of a relevant contract for the execution of a project, concession or provision of services.

Program budget

The entity's participation in the total eligible costs of the investment project may be made either through own funds or external financing, provided that twenty-five percent (25%) of it does not contain any state aid, public support or benefit (Article 14(14) G.A.K.).

The same participation can also consist of external funding. The alternative ways to cover equity are:

• Increase in share or company capital from new cash contributions
• Capitalization of existing taxable reserves and retained earnings
• Use of existing taxable reserves and retained earnings
• Asset disposal
• Bank loan

Amount of subsidy

The minimum eligible investment project size for the inclusion of investment projects in the present aid scheme is defined on the basis of the size of the entity, i.e:

• major enterprises, in the amount of one million (1.000.000) euros
• Medium enterprises, in the amount of  five hundred thousand (500.000) euros
• small enterprises, in the amount of  two hundred and fifty thousand (250.000) euros
• very small enterprises, in the amount of one hundred thousand (100.000) euros
• for the Social Cooperative Enterprises (JVs) of Law 4430/2016 (A'205), as well as the Agricultural Cooperatives (AC), the Producer Groups (POs) and the Agricultural Corporate Partnerships (ACPs) of Law. 4384/2016 (A' 78) in the amount of fifty thousand (50,000) euros.

Types of aid

• Subsidy
• Venture capital financing through an equity fund and takes the following forms:
  • equity, or quasi-equity, or investment sponsorship for the provision of investment financing
    business risk, directly or indirectly, to eligible enterprises,
  • loans for the provision of risk finance investments, directly or indirectly, to eligible enterprises

 
Aid rates for eligible costs of initial investment shall be granted at one hundred percent (100%) of the rate in the Regional Aid Map.
 

Restrictions

• The total amount of aid per submitted investment project can reach up to EUR 5.000.000
• The aid granted to each body, including aid to cooperating or associated enterprises may not exceed a cumulative total of 20 million euro. euros for an individual enterprise, and 30 million. euros for all related and cooperating undertakings, subject to the restrictions laid down in Article 4 of the General Tax Code.
• For investment projects that do not meet the condition of being an integrated initial investment project, the aid granted may not exceed the amount of one million (EUR 1 000 000).

 
These restrictions shall apply to investment projects subject to the provisions of this and for a period of three (3) years from the date of the entity's application for inclusion of its investment project.

Expenses subsidized

 
The investment projects covered herein may receive aid for eligible costs:

• Regional in nature for initial investment, either independently or in combination with non-regional aid from the other sections of the G.A.K. and other European Union Regulations or
• exclusively non-regional from the other sections of the GAC and other European Union Regulations, to the schemes provided for in Part B.

Regional investment aid

Regional aid is granted in accordance with the Regional Aid Charter for:

• Initial investment:
  • The investment in tangible and intangible assets in connection with the creation of a new business establishment, the expansion of the capacity of an existing business establishment, the diversification of the production of a business establishment into products that have never been produced in it, or the fundamental change of the entire production process of an existing business establishment.
  • The acquisition of assets belonging to a business establishment that has closed or would have closed had it not been purchased and which is purchased by an investor unrelated to the seller and excludes a simple acquisition of the shares of a business.
• Initial investment for new economic activity:
  • The investment in tangible and intangible assets related to the creation of a new business establishment, or the diversification of the business establishment's activity, provided that the new activity is not the same or similar to that previously carried out in the establishment.
  • The acquisition of the assets belonging to a closed business establishment which is purchased by an investor unrelated to the seller, provided that the new activity to be carried on using the acquired assets is not the same or similar to that practiced in the business establishment prior to the purchase.

Eligible expenditure for regional aid

Tangible assets

• Construction, expansion, modernization of building facilities and special and auxiliary building facilities and the shaping of the surrounding area. Aggregate may not exceed 45% of the total eligible costs.

  For investment projects in the tourism sector, the rate is set at 60% for building costs, for investments in the logistics sector in 70% also for the building costs of these investment projects, while for investment projects for plant production in greenhouses the rate is 60%. Finally, for buildings that are classified as listed buildings, this coefficient amounts to 80%.

• Purchase of all or part of the existing fixed assets, such as buildings, machinery and other business establishment equipment, under the following conditions, which must be cumulative:
  • the business establishment is closed,
  • the purchase is made by the entity of the investment plan, which is not related to the seller of the business establishment of approx. i unless it is a small business, which is acquired by an employee of the original owner,
  • the relevant transaction is carried out under normal market conditions. The cost of assets which have previously been granted or subsidized through development laws or other aid schemes prior to their purchase shall be deducted from such eligible expenditure.
• Purchase and installation of new modern machinery and other equipment, technical installations and means of transport that move within the area of ​​the integrated unit
• Leases for financial leasing of new modern machinery and other equipment
• Modernization of special non-building facilities and mechanical facilities

Intangible assets

• Transfer of technology, purchase of intellectual property rights, licenses, patents, know-how and unproprietary know-how
• Quality assurance systems, certifications, software supply and installation and business organization systems

 
For large enterprises, the aided expenditure on intangible assets may not exceed thirty percent (30%) of the total aided regional aid expenditure. For SMEs the maximum percentage is fifty percent (50%).

Wage cost

The wage costs of new jobs created as a result of the implementation of the investment plan are subsidized, calculated for a period of two (2) years from the creation of each position.

Conditions for wage cost support

1. Mandatory a net increase in the number of Annual Work Units (AWUs) compared to the AWUs of the previous 12 months from the date of submission of the application for membership
2. The filling of jobs should be within 3 years from the date of completion and start of production operation
3. Each job created through the investment is maintained in the assisted establishment concerned for a period of at least five (5) years for large enterprises, at least four (4) years for medium-sized enterprises and at least three (3) years for small enterprises, from the date of first occupation.

Eligible expenditure other than regional aid:

• Consultancy fees for SMEs
  Only for new small and medium-sized enterprises and up to €50,000 (up to 5% of total eligible costs)
• Start-up costs for newly created & incipient small and micro enterprises
  They concern start-up costs, such as legal and accounting services, organisational studies, etc.
  They are eligible for up to 20% of the supported costs up to a maximum of 200.000 euro
  For innovative small and micro enterprises the thresholds are doubled
• Expenses for research and development projects (expenses for personnel, buildings, instruments, equipment, etc.)
• Innovation expenditure for SMEs
  They concern a budget of up to 20% of the total supported costs and up to 200.000 EUR
• Expenditures for the protection of the environment
• Investment costs for energy efficiency measures
• Investment costs for co-production of high efficiency energy from RES
• Expenditures for energy production from RES
• Costs for installing efficient district heating and district cooling systems
• Costs for remediation of contaminated sites
• Costs for waste recycling and reuse
• Vocational training expenses

Important dates

Expected

Necessary supporting documents for submission

Expected

Useful files

18/01/2022

Draft Law "Development Law - Greece Strong Development"

02/02/2022
Map of Regional Aid

04/02/2022
Development Law 4887/2022

22/07/2022
Special areas with increased aid rates