New Development: Approval of plans in 60 days

By George Lampiris

The new development law seeks to bring a significant acceleration in the approval of investment plans from the 670 days that were two years ago to the 60 days that it aims to be after its enactment. In fact, if the audit of the file by the state is not completed within 45 days, it is transferred to a certified auditor, who undertakes in 10 days to send his assessment to speed up the process. The fee of the certified auditor during the evaluation of the file will be paid by the state, while for the control of the program the certified will be paid by the investor. Clarifications on the bill were given by the Deputy Minister of Development, Nikos Papathanasis, in the context of an information meeting held by Eurobank.

Now, at the completion of the business plan, only one declaratory act is made with the contribution of a certified auditor for investment amounts over 700,000 euros, while the investment plans sent to the regions are reduced as amounts over 1 million euros are directed to the General Directorate of Private Investments their approval within 60 days.

The aim of the new Development is to strengthen the region and not the big urban centers such as Athens and Thessaloniki, correcting the decrease in per capita income, which occurred during the ten-year economic crisis.

Investment programs are excluded from the Development, if expenses have been made before the submission of the grant application

A key parameter provided by the development is that the costs incurred by any investor before submitting his application for the investment plan to the information system will not be calculated. A basic rule of thumb is that a business plan is implemented because it receives support through Development. Therefore, if someone has started to spend before submitting his application, his program is out of order. No expense should be incurred prior to submission.

Practically a company submits the application to the information system and then can start the costs. However, because the approval process will be – as expected – faster, there will probably be entrepreneurs waiting for the 60-day approval to start, compared to one and a half to two years earlier. The aim of the bill under adoption is to solve the delays that existed in the regions in combination with acceleration provisions that have been included in the recently passed law on Strategic Investments and are coming to facilitate the investment landscape.

In terms of investment amounts for small businesses the investment should be at least 250,000 euros, for medium at least 500,000 euros and for large at least 1 million euros. All the above cases can be combined with the Recovery Fund. Private participation can also be on loan, as long as this loan does not involve state aid. This basically means that if there is an investment of 1 million euros in the pipeline and someone takes out a loan of 400,000 from the Recovery Fund, the difference between the almost zero interest rate and the reference interest rate is calculated as state aid. That is, if someone receives 50% (500,000 of the 1 million euros of the investment) in the project and it is a large grant, they will receive it as a tax exemption. If he borrows, the calculation of the state aid will be deducted from the tax exemption. Thus, if the interest rate is at 200,000, this amount will be deducted from the 500,000 so one can get the 300,000 with tax exemption and the rest from the difference between the zero interest rate and the reference interest rate.

In terms of increases in grant rates relative to pre-existing data, for large companies that received a 30% grant now the rate can reach 50% and concerns entities with more than 250 employees and a turnover of more than 73 million. euro. The medium company from 10% can reach 60% subsidy of the amount and as such is considered every business entity with over 10 million euros turnover and more than 50 employees. For the small business, the percentage of the subsidy will increase from 50% to 70% as long as it has a turnover of more than 2 million euros and less than 50 employees.

Complementary actions are also eligible for a grant

There are also complementary actions that require an initial business plan. This practically means that one can implement an environmental improvement in his business or an action of research and development or staff training, where the process of submitting a grant application is no different from the process of submitting an initial investment plan. However, a large company doing energy upgrade or training should present a corresponding plan of the dynamics it maintains as a company.

What applies to groups developing new activities

Tax exemptions are provided for medium and large companies. For business groups, if the activity of the small business is not related to the core business of the group, a group is entitled to a grant, but if it is related, the activity of that business is integrated into the group. For example, if there is a large microelectronics company that wants to be active in agri-food, it can develop the second activity, receiving a grant because it is not related to its main activity. There is also a case based on the shareholding to subsidize the small activity and not to be integrated in the group activity.

Also, the individual interested party can receive a grant in combination with a financial lease as well as through the Recovery Fund or with a private loan from the banking system. In any case, participation in the Recovery Fund is also compatible with participation in the Development Law.

The new development has a more thematic focus, creating 13 regimes so that the state can highlight areas of entrepreneurship that it considers effective for the economy.

The areas are:

– Digital and technological transformation of enterprises

– Research and applied innovation

– Green transition and Environmental Business Upgrade

– New Business

– Fair Development Transition

Agri-food – Primary Production and Processing of Agricultural Products Fisheries

– Strengthening tourism investments

Manufacturing – supply chain

– Business extroversion

– Entrepreneurship 360o

– Alternative forms of tourism

European value chains

– Large investments