FDI restrictions and screening measures become effective in Greece

13/06/2025

On 23 May 2025, Law No. 5202/2025 (the “FDI Law”) became effective in Greece, setting out a new national framework for the screening of foreign direct investments (“FDI”), in implementation of Regulation (EU) 2019/452. The FDI Law aims to safeguard public security and public order and sets out the functioning of the national FDI screening mechanism in case of foreign investor participation in the capital of Greek entities that trigger its application.

Scope

The FDI Law applies to:

foreign direct investments made by : (i) third-country investors (i.e. non EU) or (ii) EU investors directly or indirectly controlled by a third-country individual, enterprise, or government or (iii) EU investors where a third-country individual, enterprise, or government holds at least 10% participation in the investing entity and the target enterprise belongs in any of the business industries qualified as ‘particularly sensitive’ (see below).

The FDI Law does not apply to:

portfolio investments made solely for financial investment purposes, without the intent or capacity to interfere with the management or control of the target company;

intra-group restructurings or mergers of legal entities into a single entity, provided these do not increase the shares, control, or influence of foreign investors, or grant them new rights altering effective control; and

iii. public auction proceedings that have been initiated at the date on which the FDI Law took effect.

Thresholds and calculation

The screening mechanism introduced by the Law is approval by the Interministerial Committee for the Screening of Foreign Direct Investments (the “FDI Authority”) based on the nature of the target’s activities and the investor’s level of participation:

For certain sectors considered particularly sensitive — such as infrastructure, strategic assets, technology, goods, and services in the following areas: (i) defense and national security, (ii) cybersecurity, (iii) artificial intelligence, (iv) port infrastructure, (v) critical subsea infrastructure, and (vi) tourism infrastructure in border regions — screening is triggered when participation reaches or exceeds 10%, as well as in the event of subsequent increases to 20, 25, 30, 40, 50, 60, 70, or 75% of the share capital of the target entity.
For sectors which are deemed to be less essential to national interests but still within scope of the FDI Law, such as energy, transportations, healthcare, ICT, and digital infrastructure, screening applies when participation reaches or exceeds 25%, and again at 30, 40, 50, or 75%.

In both cases, for the calculation of the above thresholds, shares and equity interests held by companies within the foreign investor’s group, by members of the foreign investor’s family or by entities or foundations controlled by such family members must be taken into account. The calculation also includes any off-balance-sheet agreements concerning the exercise of voting rights, the conclusion of public works or service contracts, or other agreements such as purchase, lease, finance lease, sale and repurchase, or cooperation arrangements which may lead to an equivalent effect.

Screening Process

Before completing the investment, the foreign investor must submit an application and supporting documentation to the FDI Authority, which conducts a thorough review and, within 30 calendar days from the date of receipt of the relevant notification, submits a recommendation to the Minister of Foreign Affairs. The Minister must decide within a further 30 calendar days from the date of receipt of the relevant recommendation whether to approve, prohibit, or approve with conditions the proposed investment.

If the foreign investor does not submit an application for screening, the Committee may initiate the relevant screening procedure ex officio, for reasons of security and public order.

The Committee also functions as the national contact point and is responsible for liaising and coordinating with the authorities of other EU Member States.

Sanctions

The FDI Law provides for monetary fines that can be imposed to the investor who fails to comply with the above requirements, of up to € 100,000 or double the investment consideration. But more importantly, the Minister of Foreign Affairs has the discretion to impose the reversal or annulment of the transaction, in case the acquiring person has failed to submit an application for the screening of a foreign direct investment or fails to comply with the conditions set by the FDI Authority for the completion of such an acquisition, as per the above analysis.

Law practitioners as well as business executives engaged in acquisitions of shareholdings in Greek companies must hereinafter always check possible steps required for the completion of the transaction and must take care to include the appropriate wording in the relevant documentation for avoiding negative repercussions for investors.