Even if Greece embraced the idea of FDIs, it still struggles with certain aspects. Despite introducing reforms that should aid the process of foreign capital flow and the government’s commitment to work on creating conditions for a better FDI climate, some restrictions are still in place.
One of the positive examples is the development of the Trans Adriatic Pipeline (TAP) that attracts investors since it is aimed at establishing a gas line from Azerbaijan to South East Europe, and a part of the project will be carried out this year. Greece also tightened the leash on taxpayers by implementing stricter regulations regarding taxes. Greece is still repaying its public debt and it tries to cut budget costs where it can, but the GDP has been fluctuating in the past few years. Greece was on its way up when it suddenly entered a quick recession in 2015 that again slowed the country which caused the GDP to drop again.
Only the year before, in 2014, investors started to gain trust in Greece as it had to undergo major reforms as part of the bailout program, and things looked good, but the short 2015 recession set Greece back again.
What else is challenging and a major obstacle to FDIs in Greece is non-transparent policies and corruption issues which create further economic uncertainty and keep investors out.
Investment Policies and Reviews
What else might keep investors reserved is the fact that Greece does not cooperate with major international institutions which could make a report that would provide stats and information on the FDI aspects in Greece and attitudes towards DFIs? There is no United Nations Committee on Trade and Development or World Trade Organization Report that could offer a valid state of play and the climate.
Even if cooperation lacks, the OECD made two reports so far, one in 2013 and the other in 2016. It was more an economic survey that dealt with the investment in Greece. The OECD also issued its recommendations, and the government has recently asked the OECD for further guidelines on how to implement them. This is good news for all those who would like to start a business in Greece. Greece put a great emphasis on social welfare and wants to improve it through new reforms.
How Are FDIs Regulated?
In 2014, Greece did adopt and pass laws and regulations to facilitate FDIs, especially laws that shortened administrative procedures and thereby administrative costs, as well as other measures aimed at attracting FDI. The 2014 government also created an investment contact point to stay on top of things. The Contact Point Agency was established by merging the Foreign Trade Board and the Greek Investment Promotion Agency, which accounts to the Ministry of Economy.
The Agency shares information with the investors and also represents the investors in front of other investment companies in Greece.
How to Register a Business?
The GEMI is the registry body in Greece, and it stands for General Commercial Register which takes care of entering the company according to the law. The GEMI has also moved onto online and electronic registration which is a great facilitation. Still, even if investors can register the business from the comfort of their home, they can do so, only if they speak Greek. Registration forms are in Greek, and there are no other languages available at this point. Also, a notary public is required if the investors want to open a big company.
Right to Ownership and Limited Foreign Control
All investors have the right to own a business according to EU regulations, but Greece does not allow foreign investors to own equity in certain sectors such as arms and ammunition manufacturin or the electricity sector (which could attract more investors).