Development Law 4399/16 – the main financial tool of companies


Development law 4399/16, as passed by the Greek Parliament, concerns the whole range of private investments that will be implemented under establishment, new and existing companies in eligible sectors of economic activity.

The investment plans should have the character of an initial investment, ie:
• Creating a new unit.
• Expansion of capacity of an existing unit.
• Differentiation of production of products / services that have not been produced in it.
• Fundamental change of the entire production process of an existing unit
• Acquisition of assets of a unit that has ceased to operate.

• Entrepreneurship status of Very Small & Small Enterprises
It includes investments that are supported in the form of a grant and with 100% of the support of each region for investments of special categories (Agri-food, Information & Communication Technologies, employment growth, extroversion, innovation, cooperatives, installation in industrial areas, border areas, etc.) . In other cases, the aid is set at 70% of the pre-determined percentage of each area. It is also possible to increase the tax exemption which consists in the exemption from income tax on pre-tax profits, and / or leasing for up to 7 years, while it is possible to subsidize the cost of employment created as an individual form of aid. . The aid can not exceed 3 million Euros.
• General entrepreneurship regime.
Includes investments in the creation of a new or expansion of an existing unit in the sectors of manufacturing, tourism and services using the grant tax exemption for special categories of aid up to 70% of the rate of aid and leasing (individually or in combination) or subsidy of salary costs (individually). The aid per investment cannot exceed 5 million Euros.
• Mechanism for the reinforcement of mechanical equipment.
It includes investments in new mechanical equipment only with the use of tax exemptions or leasing.

The aid intensity for micro and small enterprises amounts to 55% of the total eligible budget in Eastern Macedonia & Thrace, Central Macedonia, Thessaly, Epirus, Western Greece, Peloponnese and North Aegean, to 45% in Western Macedonia, Ionian Islands, Crete, Central Greece, 40% in the South Aegean and 30% in Attica, while for investment projects implemented in West Attica & Piraeus the percentages are increased to 40%. For medium-sized enterprises the above percentages are reduced by 10% respectively and for large ones by 20%.

The minimum amount of investment in Koin.S.Ep. and cooperatives is set at 50,000 Euros, the very small ones at 100,000 Euros, the small ones at 150,000 Euros, the medium ones at 250,000 Euros and the large companies at 500,000 Euros. The own participation may come from own funds or external financing provided that 25% of the investment does not contain state aid.

The eligible cost categories are as follows:
A. Regional Aid Expenditure
• Construction, expansion, modernization of buildings, special and auxiliary facilities, landscaping and constructions to ensure accessibility for people with disabilities.
These costs may not exceed 45% of the total eligible regional aid costs, 60% for tourism projects, 70% for logistics investments and 80% for investment projects implemented in listed buildings.
• Purchase of buildings and machinery of a production unit that has ceased operation and this purchase is made by the non-vendor investment entity, unless it is a small business, acquired either by a family member or by an employee of the original owner.
• Purchase and installation of computer systems – other computer equipment, software and office automation.
• Purchase and installation of new modern production machinery and other equipment, including special installations and means of transport within the unit.
• Leases of new machinery and other equipment for which the use is acquired, provided that the lease agreement stipulates that the equipment will become the property of the lessee at the end of the contract.• Quality assurance and control systems, certifications, procurement and installation of software and business organization systems.
• Technology transfer through the purchase of intellectual property rights, licenses, patents, know-how and non-proprietary technical knowledge.

B. Expenditure outside Regional Aid
• Advisory services for investment projects of young micro and small enterprises (at the date of submission of the application has not passed seven years from the date of their establishment), up to 5% of regional aid costs and up to 50,000 Euros and costs for technical and financial monitoring and coordination of the investment plan, support for required loans and support in obtaining a loan and disbursement of state aid.
Also included are costs of organizing the administration, reorganizing the individual functions, redesigning the business processes and costs of market research and conducting studies to promote products or services directly related to the investment plan.

• Start-up costs for small – very small enterprises to be established, such as legal services and administrative support and consulting services that are directly related to the establishment of the company, initial organization of the unit, expansion, costs of drawing up / publishing articles of association, promotion, elaboration of techniques , commercial and organizational studies, costs of research, legal services and consulting, up to 10% of regional aid costs and at the same time up to 100,000 Euros.

The implementation of the expenses starts after the submission of the application for inclusion.
For investments over 500,000 Euros, the institutions are obliged to operate in a corporate form until the disbursement of the first installment of the aid.
Investment plans over 300,000 euros, companies are required to keep bibliographic books (DG Category).
The deadline for electronic submission of applications for entrepreneurship schemes for micro and small enterprises and general entrepreneurship is set at 30.07.2021, while for the mechanical equipment aid scheme, at 30.09.2021.

Strengthen your business, utilizing the Development Law 4399/16, with the experience and efficiency of PRIORITY. Find out about the active financial tools by sending an e-mail to Mr. Fanis Skliris, Sales Account Manager, [email protected]