Development Law 4887/2022

Support for Tourism Investment

The new Development Law (L.4887/2022) was published, which replaces the current development law (L.4399/2016). The aim of the Ministry of Development and Investments with the approval of the new Development Law is to strengthen the economic development of our country by providing incentives to specific activities and sectors

To achieve this goal, the new Development Law 2022 provides for the acceleration and simplification of the evaluation, approval and control procedures of the submitted investment plans, as well as the provision of higher aid rates.

Funding Key Points

Date of opening/closing of applications

1st CYCLE: 5 September 2022 – 5 December 2022
2nd CYCLE: Pending the publication of the notice

Content of the Investment Plan

  • Creating a new unit.
  • Expansion of the capacity of an existing plant.
  • Diversification of the production of a plant.
  • Fundamental change of the entire production process of an existing plant.

Beneficiaries

  • Commercial Companies
  • Cooperatives
  • Social Cooperative Enterprise, Agricultural Cooperative, Producer Groups, Agricultural Corporate Partnerships
  • Joint ventures engaged in commercial activity,
  • Public and municipal enterprises and their subsidiaries under certain conditions.

Budget

  • 1,000,000 euro for large companies,
  • 500,000 euro for medium-sized enterprises,
  • 250,000 euro for small businesses,
  • 100,000 euro for very small businesses,
  • 50,000 euro for Social Cooperative Enterprises, as well as Agricultural Cooperatives, Urban Cooperatives, Producer Groups, and Agricultural Corporate Partnerships.

Underlying investment projects

Eligible sectors of economic activity are:

  • The tourism sector

Specifically:

    • Establishment or expansion of hotel units of at least four (4) stars,
    • 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 they are upgraded to a category of at least three (3) stars,
    • expansion and/or 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 affiliation, provided that during the period of interruption there has been no change of use of the building and that, through the expansion or modernization of the integrated form, they are upgraded to a category of at least four (4) stars
    • establishment, expansion and/or modernisation of a comprehensive form of Organised Campsites, which belong to or are upgraded to a category of at least three (3) stars,
    • the establishment and/or modernisation of integrated hotel units within designated traditional or listed buildings, which belong to or are upgraded to a category of at least three (3) stars,
    • establishment, expansion and/or modernisation of complex tourist accommodation, as defined in Law  4276/2014 (A’ 155), belonging to or upgraded to a category of at least four (4) stars, which are submitted as a single investment project, not including buildings and facilities to be transferred or leased,
  • establishment or modernisation of non-main tourist accommodation (subject to conditions) 
  • establishment, expansion and/or modernization of condo hotels, as defined in Law  4276/2014, belonging to or upgraded to a category of at least four (4) stars and provided that the transfer or long-term lease of such assisted parts takes place after the end of the fulfilment of the long-term obligations of the investing entity,

Eligible expenditure

Eligible expenditure outside the scope of Regional Aid

Tangible assets

  • Construction, extension and modernisation of buildings, as well as special and auxiliary facilities of buildings, and for structures to ensure accessibility for disabled persons and persons with disabilities, as well as landscaping. Such expenditure may not exceed in total sixty percent (60%) of the total regional expenditure supported. The above rate is eighty percent (80%) for investment projects implemented in buildings that are classified as listed for preservation.
  • The purchase of all or part of existing fixed assets, such as buildings, machinery and other equipment of a business establishment, subject to the following conditions, which must be cumulative:
  • the business establishment closed at least two (2) years before the date of submission of the application for affiliation,
  • the purchase is made by the operator of the investment project, who is not related to the seller of the business establishment referred to in point (i), except in the case of a small enterprise acquired by an employee of the original owner, who is not related to the owner(s) of the closed establishment up to the third degree (in the case of a legal person, the owner is understood to be a natural person holding a share/shares in the company/share capital) and the employment relationship has lasted for at least two years
  • the relevant transaction is carried out under normal market conditions. The cost of assets which have previously been subsidised or supported by development laws or other aid schemes prior to their purchase shall be deducted from this eligible expenditure.
  • The purchase and installation of new modern machinery and other equipment, including technical installations and means of transport that move within the premises of the integrated unit.
  • Lease rentals of new modern machinery and other equipment, the use of which is acquired, provided that the leasing contract stipulates that the equipment becomes the property of the lessee at the end of the contract.
  • Modernisation of special installations other than buildings and mechanical installations

Intangible assets

  • Technology transfer, purchase of intellectual property rights, licences, patents, know-how and unpatented technical knowledge.
  • Quality assurance systems, certifications, supply and installation of software and business organisation systems.

For Large enterprises, eligible expenditure on intangible assets cannot exceed 30% of total eligible expenditure and for SMEs 50%.

Salary costs (independent expenditure)

  • The wage costs of the new jobs created as a result of the realization of the investment project are calculated for two (2) years from the creation of each job. The above salary costs are eligible expenditure only on their own and not in combination with points (a) and/or (b) and only if an initial investment is carried out.

 

Eligible expenditure outside the scope of Regional Aid

  • Expenditure on consultancy services relating to investment projects for new small and medium-sized enterprises, which may not be the subject of a continuous or periodic activity nor relate to the enterprise’s usual operating expenditure. A new enterprise is considered to be a newly established enterprise which has not completed a financial year at the time of applying for the scheme.

For consultancy services to SMEs, the aid rate is set at fifty percent (50%) thereof and these costs are supported up to a maximum of five percent (5%) of the total supported regional aid costs and up to the amount of fifty thousand (50,000.00) euros.

  • Expenditure on vocational training. Eligible costs are those relating to the upgrading of qualifications or retraining of workers.

For vocational training, the aid rate of the expenditure is set at fifty percent (50%) of this amount. Under certain conditions the above percentage may be increased. Such expenditure shall be eligible for aid up to a maximum of ten percent (10%) of the total eligible regional aid costs.

  • Expenditure on SME participation in trade fairs. 

For the participation of SMEs in trade fairs the aid rate does not exceed fifty percent (50%) of the eligible costs and the costs are supported up to a maximum of ten percent (10%) of the total eligible regional aid costs.

Other information

Financing scheme for investment projects

Each entity contributes to the cost of the investment project either with its own funds or with external financing (or a combination of both).

Loan pre-approval must be submitted electronically through the Information System  for Development Law no later than 45 days after the application deadline.

 

Types of aid

  • Grant.
  • Subsidy for financial leases.
  • Subsidy of the cost of the employment created.
  • Tax exemption.

 

Regional aid rates and levels

For micro and small enterprises, the aid rates for all types of incentives other than grants are granted at the maximum rate of the Regional Aid Map. The grant incentive is awarded at eighty percent (80%) of the Regional Aid Charter ceiling, unless the place of investment is included in the List of Special Areas published by the Ministry (100%) or the investment property is listed (90%).

For medium-sized and large enterprises, the aid rates for all types of incentives, except the grant, are granted at eighty percent (80%) of the maximum ceiling of the Regional Aid Map, unless the place of investment is included in the List of Special Areas published by the Ministry (100%) or the investment property is listed as a conservation area (90%). The grant incentive is granted only to medium-sized enterprises and only in the Regional Units of Thrace. 

Maximum amounts of aid to be granted

The total amount of aid per investment project submitted by micro and small enterprises may not exceed €3,000,000 for all types of aid.

For medium-sized and large enterprises the amount of aid cannot exceed:

  • three million euro (€3,000,000) for aid for leasing subsidies or subsidies for the cost of the employment created, as well as the grant in the case of par. 4 of Article 9 (aid for medium-sized enterprises in the Regional Units of Thrace) and 
  • five million euro (€5 million) to support the tax exemption. 

The possibility of combining the aids is provided for.

The aid granted to each body, including aid to cooperating or associated enterprises, may not exceed a cumulative total of €20,000,000 for an individual enterprise and €30,000,000 for all the cooperating enterprises in proportion to their participation or associated enterprises.

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