Development Law

Strengthening tourism investments – Development Law 4887/2022

Investment amount to qualify
>150.000.000

Subsidy
15%-75%

Deadline
2023-10-13

The programme

The aim of the scheme Support for tourism investments is to grant aid to a wide range of tourism investments, mainly concerning the creation, expansion and modernisation of integrated tourist accommodation in the whole of the Territory, with the aim of upgrading the quality of the tourist product.

Provision is made for aid for the creation, expansion and modernisation of integrated tourist accommodation and campsites (Camping) in the whole territory in order to improve the quality of the tourist product.

Who it concerns

The covered investment projects concern:
α) establishment or expansion of hotel units of at least four (4) stars,
b) modernisation of integrated hotel units belonging to or upgraded to a category of at least three (3) stars, after five years from the date of opening of the unit or from the date of completion of the previous investment in the modernisation of the integrated form of the unit, as well as the modernisation of non-main tourist accommodation, provided that it is upgraded to a category of at least three (3) stars,
γ) expansion and modernization of integrated hotel units that have ceased operation for at least two (2) years prior to the date of submission of the application for inclusion, provided that there has been no change of use of the building during the period of interruption and that, through the extension or modernisation of an integrated form, the building is upgraded to a category of at least four (4) stars,
(d) the establishment, expansion and modernisation of an integrated form of organised tourist camps (camping), which belong to or are upgraded to a category at least three (3) stars,
e) establishment and modernisation of integrated hotel units within designated traditional or listed buildings, belonging to or upgraded to a category at least three (3) stars,
f) establishment, expansion and modernisation of complex tourist accommodation, as defined in Law No. 4276/2014 (A' 155), which submitted as single plans, not including buildings and premises to be transferred or leased on a long-term basis,
ζ) the establishment and modernisation of non-main tourist accommodation, provided that,
(g) bear a distinctive title "hospitality hostel",
(gb) the following are implemented within traditional settlements in one of the following areas:
i) mountainous areas, according to the classification of EL.STAT., except the municipal units that form part of the urban complex of Athens,
(ii) areas located in a distance of up to thirty (30) kilometres from the border,
iii) islands with a population of less than three thousand one hundred (3,100) inhabitants,
(g) be classified into category of five (5) keys, in accordance with Commission Decision No. 12868/2018 (V' 3119) decision of the Minister of Tourism and
(gd) maintain minimum number of twenty (20) rooms to let,
η) establishment, expansion and modernization of condo hotels, as defined in Law No. 4276/2014, provided that the transfer or long-term lease of the assisted parts of such parts takes place after the expiry of the long-term commitments of the investing entity, without prejudice to para. (g) of par. 3 of Article 25 hereof.

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

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 in the two (2) years preceding the submission of the application for aid:
- have relocated the business establishment in which the initial investment for which aid is requested is to be carried out, or
- refuse to commit not to relocate the above business establishment for a period of two (2) years after the completion of the initial investment,
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.

highlight
With this notice, in the same Municipal Unit there is one (1) investment project per entity including its affiliated enterprises.

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.

highlight
With this notice, in the same Municipal Unit there is one (1) investment project per entity including its affiliated enterprises.

Types of aid

Tax exemption (exemption from payment of income tax on the pre-tax profits realised, which arise under the relevant tax legislation, from all the activities of the company, minus the tax of the legal person or legal entity on the profits distributed or assumed by the partners)
The investing entity may use the entire amount of the tax exemption aid to which it is entitled within fifteen (15) tax years from the year in which the right to use the benefit is established
Subsidy, which consists in the free provision by the State of a sum of money to cover part of the supported costs of the investment project and is determined as a percentage of these costs
Leasing subsidy, which consists in the coverage by the State of part of the leasing instalments paid for the acquisition of new machinery and other equipment. The leasing subsidy (leasing) may not exceed seven (7) years
The subsidy will be paid every six months and after each instalment of the rent is paid by the investing company
Subsidization of the cost of employment created

Aid rates

For medium and large enterprises the aid includes all the above incentives except the grant.

The aid rates for the eligible costs of the initial investment will be granted on the basis of the intensity ceilings of the Regional Aid Map as follows:

a. For micro and small enterprises, the aid rates for all types of incentives other than grants are granted at the maximum rate laid down in the Regional Aid Map.

The grant incentive is awarded at eighty percent (80%) of the Regional Aid Charter ceiling.

Increased rate of subsidy (up to the maximum rate (100%) of the Regional Aid Charter except for the following. d' granted at ninety percent (90%)) shall be granted for investment projects which are implemented in the following areas:

Mountainous areas, according to the classification of EL.STAT., except the municipal units that form part of the urban complex of Athens,
areas located up to thirty (30) kilometres from the border,
islands with a population of less than three thousand one hundred (3,100) inhabitants,
buildings classified as listed,
areas affected by natural disasters, in accordance with a decision of the Governmental State Relief Committee

b. For medium and large enterprises the aid rates for all types of incentives other than grants shall be granted at eighty percent (80%) of the ceiling of the Regional Aid Map.

Increased rate of subsidy (up to the maximum rate (100%) of the Regional Aid Charter except for the following. d' granted at ninety percent (90%)) shall be granted for investment projects which are implemented in the following areas:

Mountainous areas, according to the classification of EL.STAT., except the municipal units that form part of the urban complex of Athens,
areas located up to thirty (30) kilometres from the border,
islands with a population of less than three thousand one hundred (3,100) inhabitants,
buildings classified as listed,
areas affected by natural disasters, in accordance with a decision of the Governmental State Relief Committee

Special remarks

For the North Aegean Region the maximum aid rate is set for large enterprises at 55%, for medium-sized enterprises at 65% and for small and micro enterprises at 75%. These rates are considered for the time being to be the maximum limits of the Regional Aid Map.
For investment projects implemented in the Delignification Zones, which according to Law. 4759/2020 are the Regional Units of Florina and Kozani and the Municipality of Megalopolis, the aid rates are the maximum of the Regional Aid Charter, depending on the size of the enterprise
For investment projects implemented in the Regional Units of Kastoria and Grevena and the Municipalities of Tripoli, Oichalia and Gortynia, the grant rate for small and micro enterprises is set at 90% and for medium and large enterprises the tax exemption rate is set at 90% of the maximum limit of the Regional Aid Charter.

Restrictions

The total amount of aid per submitted investment project can reach up to EUR 3.000.000
The cumulative amount of aid granted to each undertaking, including aid to cooperating or associated enterprises , may not exceed 20 cm. 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 Regulation; 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 by this may receive aid for eligible expenditure of regional character for initial investment, either alone or in combination with non-regional aid under the other parts of the GAC and other European Union Regulations.

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)
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
Expenses for media participation in trade fairs
Aid for disadvantaged workers