All-out investment push

New bill offers businesses massive subsidies, full tax exemption

In an effort to boost foreign investment and stoke up Greece's economy, the government unveiled an extensive and ambitious development program yesterday, offering a wide range of tax breaks and subsidies.

«We are giving special emphasis to quality, tourism, services and the less-developed regions of our country. We have pulled out every stop to help economic development and regional convergence,» said Economy and Finance Minister Giorgos Alogoskoufis, adding that 500 million euros from public and EU funds would be invested in the scheme next year. He presented the draft bill alongside Development Minister Dimitris Sioufas, who called the plan «robust and aggressive.»

The program aims to make incentives available to a wider range of companies and entrepreneurs involved in a broader category of business activities than before. These include the building of theme parks, desalination units, distribution centers and truck depots.

Businesses involved in these activities, and more established ones, will be able to benefit from subsidies of up to 55 percent on their investment costs and a complete tax exemption. They will also have the option of applying for up to half the wage costs of their new employees to be covered by grants. These measures will vary according to the region invested in, with the aim of attracting entrepreneurs to more remote areas of Greece.

The government has repeatedly stated that it wants to transform Greece into a year-round tourist destination and, under the proposed scheme, is trying its hardest to achieve this. It has given special status to companies building four- or five-star hotel complexes and converting traditional or listed buildings into hotels. These businesses will be able to claim greater concessions.

Another key element of the development program is the reduction of red tape involved in the application process for subsidies and tax breaks. The draft law proposes that businesses be able to submit their plans throughout the year, as opposed to the current September 15 deadline. Independent evaluators, not just civil servants, will be allowed to examine proposals and the assessment process will be reduced to two months from three.

The bill is due to be submitted to Parliament next week and is expected to be voted on by the end of the year.