Greece is introducing a new framework of incentives for Foreign Direct Investment (FDI), with Law 5338/2026 seeking to shift the focus from simply attracting foreign capital towards creating investments with a clear productive, technological and developmental impact.
The philosophy underpinning the new framework is that foreign investment should not be viewed merely as a capital inflow, but as a tool for strengthening the productive base, developing new technologies, fostering innovation, increasing business scale, creating specialized jobs and enhancing the competitiveness of the Greek economy.
This means that the key question for an investor is no longer simply, “What incentives does Greece offer?”, but also, “Where and how should the investment be structured to optimize its overall economic outcome?”
The framework applies to investment projects financed with non-domestic capital and directed towards specific sectors of strategic interest. These include manufacturing and industrial production, research and applied innovation, artificial intelligence, industrialized primary production, biotechnology, defense and aerospace, logistics and warehousing, as well as healthcare and social care activities.
Eligible beneficiaries may include new businesses established in Greece or existing foreign companies establishing a new branch in the country. Their shareholders or members may include foreign investors or foreign legal entities.
Tax, licensing, finance and residence ίσως The Incentives: Taxation, Accelerated Licensing, Financing & Residence Permits”.
The incentive framework is built around four key categories:
- Tax Exemption: Exemption from income tax on realized pre-tax profits from the full range of business activities all business activities, through the creation of an equivalent tax-exempt reserve.
- Accelerated Licensing: The required licenses or approvals, including planning and environmental approvals, are issued within two months of the submission of a complete application file dossier to the General Directorate for Development Laws and FDI.
- Guaranteed Loans: SMEs may obtain short- or long-term loans guaranteed by the Hellenic Development Bank S.A., through the DeLFI Guarantee Fund or another relevant instrument.
- Residence Permit Facilitation: Residence permits may be granted to third-country nationals, including investors and specialized personnel, in accordance with the Immigration Code.
Investment size and location ίσως “Investment Size: From €10 Million to €50 Million” ή “Geography Becomes Part of the Business Plan”
The new framework targets investments of significant scale. Eligible costs must be at least €10 million and no more than €50 million, while, specifically for research, applied innovation, artificial intelligence and biotechnology, the minimum threshold is set at €5 million.
The level of regional aid is linked to the Regional Aid Map. Maximum aid intensities are defined for large enterprises and are increased by 10 percentage points for medium-sized enterprises and by 20 percentage points for small and very small enterprises, where the relevant rules apply.
Therefore, location selection is no longer simply a matter of real estate or operating costs. It becomes a key parameter of the project’s financial structure.
An investment can generate a different overall economic outcome depending on the region in which it is located. Differences in aid intensity may affect the amount of the investor’s own contribution required, the cost of capital and the return on investment. For this reason, location selection should be based on a comprehensive model for assessing the economics of alternative locations.
An investor should consider the following factors together:
- The intensity of available state aid.
- Access to markets and suppliers.
- Connectivity to ports, road and rail networks.
- The availability and cost of land or facilities.
- Energy costs and power availability.
- Labour costs and workforce availability.
- Access to specialized talent.
- The presence of a network of suppliers and business partners.
- Licensing timelines.
- Proximity to universities, research centers and technological infrastructure.
- The overall productivity of the facility.
In other words, the optimal location is not necessarily the one offering the highest aid intensity. It is the location where the combined effect of incentives, productivity, accessibility, costs and implementation speed generates the highest long-term return.
Financing and evaluation ίσως “Financing Requires Genuine Investment Commitment” ή “ Evaluation Shifts from ‘How Much You Invest’ to ‘What You Create’
The financing structure of the framework reinforces this approach. The investor must contribute to eligible costs through its own funds originating outside Greece or external financing, while equity must account for at least 40% of total costs. At least 25% of eligible costs must be financed through the investor’s own funds originating outside Greece or external financing, in either case free of any state aid.
For the investor, therefore, the financing structure must be designed from the outset rather than after the project has been approved.
Importantly, the assessment is not limited to checking eligible expenditure.
The framework provides for an assessment of the investment’s viability, the financial performance and funding capacity of the applicant, the performance of the investment plan, the jobs created—with particular emphasis on specialized personnel—as well as the utilization of buildings.
For a foreign group, therefore, a strong investment case should not present only capital expenditure (CAPEX) and revenue projections. It should demonstrate the investment’s contribution to productivity, technology, employment, internationalization and regional development.
From location to business model ίσως “The Key Takeaway: Investment Should Be Designed from Location to Business Model”
For a €20 million investment, for example, knowing the applicable aid intensity is not enough. An investor must also understand the costs of land, energy, transporting raw materials and accessing the required workforce, as well as the time required for licensing. Only then can the true cost of establishing the operation and the actual return on capital be calculated.
Greece, therefore, is no longer competing solely through an “incentive package”. It is competing as an investment destination—and this shifts the focus of the discussion from the size of the subsidy to the quality of the investment.
The real test of the new framework will be whether it can transform Greece’s geographic position, productive capacity, infrastructure, human capital and financing instruments into a coherent and compelling investment proposition.
