Greece yesterday said it plans to launch a more favorable tax regime for large foreign investments in a bid to attract private sector funds to boost regional growth. Presenting the development law which is due to come into effect in September, Economy and Finance Minister Nikos Christodoulakis said the tax rate for new, large investments made by foreign investors would be calculated either as a proportion of the investment or projected revenues or profits. The rate would be valid for 10 years, with the investors exempted from tax audits. Caling it a tax contract between the government and investors, he said the proposed tax regime «creates certainty for investors» in terms of how much they would pay in taxes over 10 years. The size of the tax rate has yet to be determined. In a major shift from the current development law, which focuses principally on new start-ups, the proposed legislation seeks to encourage existing companies to modernize their facilities by allowing them to set up a tax-free reserve for this purpose. Companies planning to expand their operations and increase their work force at the same time will benefit from the same subsidies as new ventures. The development law also does away with a 15,000-euro cap on leasing subsidies for major manufacturing operations that create a significant number of jobs. Leasing subsidies for each newly created job are due to go up from 45,000 to 50,000 euros. New businesses focusing on high-tech will not need to create jobs to qualify for leasing subsidies. The legislation also singles out less-developed regions by channeling more funds to these areas and tourism investments by increasing subsidies for hotels undergoing renovation.