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Enterprise Greece: An initiative to facilitate new investments

Publiziert am 10.März.2014 von Abraam Kosmidis

The primary concern for the Greek government is to put country’s economy back on track. The Officials are more than interested in finding ways not only to maintain the existing investments, but also to appeal and to support new ones. The government is making every effort to encourage its international trade collaborations and to boost even further the investment environment in Greece. Greece must surpass all the bureaucratic practices of the past which did not let the investments to rise. The present hard times demand a new flexible working environment.

In order to achieve the above goal, the government has launched some measures: it proposed the new investment law which allows businesses to start up within a day (see the article of 28 February 2014: Starting up a business in Greece within a day’). The last few months, it focuses on reviewing the existing exports procedures and processes followed by the exporting companies of the country. The exports policy reform is considered to be another major step towards the creation of a stable investment environment in Greece.

First of all, it was necessary for a National Exports Strategy to be established. In the recent past, there had been taken some few reluctant actions for creating the “National Strategy for Trading Facilitation (NSTF)” in Greece. The efforts to create a thorough exports strategy have become more intense the last two years (the crisis made clear that an extroverted exports approach is the pillar of the Greek economy – along with tourism). The Greek NSTF is based upon the examples of other countries such as England, Austria and Holland which have applied successfully similar kind of strategies.

The NSTF aims to simplify all the pre-customs and customs procedures related to the exports trading, thus reducing the time and administrative costs for the exporting companies. Export Trading becomes more favorable for investors either they come from Greece or even from abroad. More particularly, foreign investors will be interested in investing in Greece, because from now on the country’s legislative framework allows them to easily export anything produced by their investment. The initiative to form a National Exports Strategy must have taken place long time ago as Greece has a great advantage due to its geographical location and it may become the hub for the region’s international trade. The officials expect to achieve the following objectives, after the NSTF is implemented

  • Reduction of the number of days needed to export by 50% by 2015
  • Reduction of the export cost by 20% by 2015

The key presupposition to implement the National Exports Strategy is the formation of a governmental supervisory body (political level), called the “Co-ordination Committee of the National Strategy for Trading Facilitation (CCNSTF). This committee is formed with the participation of the following ministries: Ministry of Finance, Ministry of Foreign Affairs, Ministry of Development and Competiveness, and Ministry of Rural Development. The European Commission and the United Nations Economic Commission for Europe (UNECE) will be invited to hold an advisory role. The purpose of this committee is to make sure that the principles of the NSTF are followed, and to provide the necessary support and guidance to a body called the Operational Steering Committee for Trade Facilitation -OSC (operational level).

The OSC will operate under the supervision of CCNSTF and it will be set up with the participation of the above mentioned ministries as well as participants coming from the following business unions: Hellenic Federation of Enterprises, Panhellenic Exporters Association, Greek International Business Association, Exporters Association of Crete, Hellenic Company of Logistics and Greek Federation of Customs Brokers Associations.

The Committee will have to monitor and underline the progress done during the implementation of the National Strategy for Trade Facilitation. It must also coordinate and supervise all the involved parties (ministries, business unions, exporters). It can come up with suggestions to improve the efficiency of the NSTF.

In addition to the Operational Steering Committee, the Greek government decided to set up a new entity called “Enterprise Greece”. This new company will function supplementary with the OSC, in order to enhance the effort for extroverted entrepreneurship in Greece.

The responsibilities of the “Enterprise Greece” are to:

  • Support  the Greek investments in markets from abroad
  • Provide information and advice to the interested investors from abroad on the legislative framework that rules the investments in Greece.
  • Look into the markets of other countries in order to inform the business unions and investors.
  • Provide support and advice to investors who wish to export to other countries.
  • Organize promotion campaigns for goods and products produced in Greece.
  • Cooperate with international trade institutions to form a common trade policy.
  • Make suggestions regarding the improvement of the legislative framework for the exports or the investments in Greece.
  •  Cooperate with the Ministry of Foreign Affairs to organize the business visits of the President of the Hellenic Republic, the Prime Minister and the ministers to other countries.

The law bill was voted by the Greek parliament on 26 February 2014. The new entity is expected to start functioning on 1 April 2014, but its full operation will begin on 1 October 2014.

There is a strong political will to reverse the prevailing conditions that ruled the investments so far. Greece needs radical structural reforms, if it wishes to return on the road of development. There are mainly two points that the government may focus on in order to bring the country in developmental orbit: appeal new investments and improve performances of exports.

The new investment law is the first of a series of actions towards this direction. The creation of the entity “Enterprise Greece” is the second one – together with the implementation of National Strategy for Trade Facilitation. The government hopes that the NSTF and the “Enterprise Greece” will be a major tool for the boost of the economy, as they both set a stable and friendly environment for the investors – exporters. They both promote the extroverted “climate” that is cultivated in Greece.





Starting up a business in Greece within a day

Publiziert am 28.Februar.2014 von Abraam Kosmidis

On Monday, 17th February 2014, the Greek Minister of Development, Mr Xatzidakis, gave a press-conference, where he presented a draft of a new investment law which will change radically the methodology followed in order to start up a new business in Greece. It aims to reduce the time required to begin a new business up to a single day. It will allow all businesses to operate without any severe public sector interference and simplifies the required procedure to get a start-up license.

This law is considered to be one of the most important laws that the Greek government has issued, during the last 18 months, that’s why it was so important for the Greek Prime minister, Mr Samaras to be present and attend this specific press-conference. He said that this law is a very significant weapon, used to boost the Greek Economy and to reduce the “monster” of bureaucracy.
What the investment law will include

The final format of the law will not be finalized prior to its voting process by the Greek parliament, by the end of April. However, the basic core of this new law is as follows:

  •  The law is applicable to every business sector.
  • An entrepreneur wishing to begin a business in Greece, he/she can fill in an application in the web-portal (which will be created soon enough), where he/she can upload all the necessary documentation. In most cases – for example such as general shopping stores, the entrepreneur will get the license to start operating his business within a day. In addition there are some other cases regarding businesses with environmental impact (e.g chemical industries, mines) where a license is required. The public authorities will provide for this license, before the businessmen apply on the web. The law will ensure that the steps required in order to obtain the license will be narrowed from 21 (steps required so far) to 7.
  • The procedure followed so far, demanded that the public authorities had to check over plenty of paper documentation before providing any operation license. From now on, this control will be done by some credited auditors – either belonging to the public or the private sector. It will take place during the operational lifetime of businesses. This means that the control of businesses will be more efficient and effective. The results of these controls will be upon the actual facts and data arising throughout the operational lifetime of a business.
  • The law will define that strict penalties will be imposed to any entrepreneur who is found (during the audits) to be law offender. The penalty may reach up to the level of three million Euros, or it may even mean that the business may close permanently.
  • The web-portal will allow everyone who wishes to start-up a business, not only to apply for an operation license, but furthermore, it will allow the businessmen to follow up the progress of their application. The ultimate target is to provide most of the operation licenses within a single day.
  • The law aims to simplify the procedure to establish and operate a Business Park. The public authorities will no longer interfere during the licensing process. The law aims that the Business Parks operate in a more organized and steady environment. The law encourages the establishment of new Business Parks and facilitates the operation of the existing ones.


The benefits of the investment law:

The Greek government aims to achieve some great advantages when this law is in force:

ü  The numbers of steps required to obtain an operation license will be reduced up to 60%. So far, the entrepreneur was obliged to collect documentation such as health and fire safety regulations as well as studies on environmental impacts. Many and different public authorities were involved to provide all these papers. They now become obsolete. The procedure only requires the entrepreneur to fill in an application.

ü  This automatically leads to reduction of bureaucratic constraint that the public authorities had to deal with. Since the interference between the entrepreneur and the public authorities is minimized, then the corruption phenomena are eliminated.

ü  The entrepreneur becomes more responsible to provide true data regarding the operation of his/her business. He /she is aware of the fact that any fake data may cause the business to shut down. He/she also feels that all the actions that the entrepreneur is responsible for will benefit his/her own business.

ü  Until now, there were not any clear and objective standards which would thoroughly describe the business licensing process. Every case for licensing a business was examined as separate case and not under the ‘umbrella’ of specific standards. As a result, there was a chance of misinterpretation of the law, unjustified time delays and eventually corruption seemed to be the only solution.

ü  The Greek business licensing procedure will conform to the EU and international practices, creating a business friendly environment in Greece.

More importantly, the long –term benefit of the application of this investment law, will be the enhancement of the business environment in the country. The government hopes that this law will create a safe business working framework that will appeal in the near future investors from abroad to invest in Greece.

The business world of Greece and from abroad is expecting this new law to be quickly enacted. It took several months of preparation and the cooperation of several ministries (such as the Ministry of Internal Affairs, the Ministry of Public Order, Ministry of Tourism, Ministry of Environment, etc), but the results are very hopeful. The entrepreneurship in Greece changes from its foundation. A new era for investments in Greece  begins.

Mergers and Acquisitions in Greece

Publiziert am 16.September.2013 von Abraam Kosmidis

Mergers and acquisitions are one way that companies looking to expand internationally can break into overseas markets. Greece welcomes investment from overseas companies and has lawyers ready to help and advise interested parties on how to carry out a merger or acquisition in this country.

Benefits of mergers

As a business expansion technique, mergers and acquisitions (M&A) can offer companies a number of advantages:

  • The company acquires or joins with an existing business that already has its own skilled and experienced staff and therefore boosts the acquiring company’s knowledge base.
  • It increases the acquiring company’s customer base and provides easy access to a new market.
  • The new company may have new technologies or patented products that the acquiring company might not be able to access other than through a merger or acquisition.
  • The target company often conducts the same type of business as the acquiring company, and so the acquisition or merger can help to reduce competition and increase the company’s market share.

Consulting with local lawyers is essential

However, although mergers and acquisitions can be an effective way of expanding a business, they are not to be entered into lightly. They can be very complex legal arrangements with many potential pitfalls or roadblocks to catch out an unprepared company, particularly if they involve overseas companies. Problems that could potentially arise and may need specialist legal advice to resolve include:

  • What to do with existing staff of the acquired company? There may be a duplication of roles as a result of the merger or acquisition and as a result some staff may become surplus to requirements. However there are European laws, such as the Transfer of Undertakings (Protection of Employment) Directive, that govern how staff in this situation must be treated.
  • Failure to fully understand and comply with the different rules governing business operations in a foreign country.
  • Failure to fully research the economic viability of the target company, including all its assets and liabilities.

The rules governing the merger will depend on the countries involved. Any company considering a merger or acquisition with a company based in Greece is strongly advised to seek professional advice from local lawyers. It can be difficult for any company to try and do business in an overseas market – they need to understand and adapt to local rules and customs, and also be able to identify the right entry strategy into the country. Law firm Kosmidis & Partners has lawyers who are fully experienced in all aspects of Greek merger and acquisition law and will be able to guide any overseas company through the process.

Positive signs for mergers and acquisitions

As with many countries, merger and acquisition activity in Greece has been subdued over the past few years as a result of the global economic downturn. However, recent improvements in the global economy have led to increased confidence amongst businesses, and as a result they are more willing to consider the possibility of mergers again.

Recent figures from business advisors EY have revealed that 87% of companies now consider the global economy to be either stable or improving. The figures also show that 51% believe the global economy to be improving outright – more than twice the 22% that reported the same in October last year.

In addition, this rising confidence has led to many global companies now believing that M&A activity will increase over the next 12 months – as many as 72% expect to see an increase in the volume of global deals over the next year.

However, EY also found that this increased confidence has yet to translate into action. Its survey found that although 52% of major companies cite growth as a priority, only 29% say they expected to actually make an acquisition over the next year.

Despite this lack of planned action, many companies acknowledge that now is probably a good time to conduct a merger or acquisition. EY found that 39% of companies believe there to be quality acquisition opportunities currently available, which is an increase over the 30% that believed the same six months ago. In addition, 50% report feeling more confident about the volume of merger opportunities available, compared to 37% six months ago.

The fact that there is a growing number and higher quality of merger and acquisition opportunities leads EY to suggest that now is a good time to conduct a deal, and that companies that are the first to act will reap the rewards.

“There are signs of improvement but caution remains,” explained Pip McCrostie, EY’s Global Vice-Chair, Transaction Advisory Services. “While almost three quarters of corporates expect deal activity in the market to increase over the next year, far fewer have an intention to buy. This could actually create a first mover advantage opportunity for those willing to take action and secure assets ahead of the competition.”

Greece as a M&A destination

For companies already based within the European Union (EU) or the European Economic Area (EEA), Greece offers an ideal destination for international merger activity, as companies will be able to take advantage of the preferential trade conditions that exist between EU and EEA countries. Laws already exist to facilitate cross border operations between EU countries, including rules relating to the transfer and employment of workers, debt recovery and dispute resolution.

Professional services provider KPMG has also found positive economic signs regarding M&A. Its latest global M&A predictor found that confidence amongst the world’s largest companies was 14% higher than it was at the same time last year.

“The evidence from the top 1,000 companies is that while confidence is fragile, it is there, and this is reflected in average (as opposed to total) deal values, which continue to increase.” commented Tom Franks, Global Head of Corporate Finance at KPMG.

Although the surveys conducted by the business advisory firms were focused on the larger global corporations, the favorable market conditions are equally applicable to smaller and medium size businesses.

Mergers can be particularly beneficial for these companies, as they are less likely to already have an international presence. M&A can offer a potential solution for firms that are keen to take advantage of a wider international customer base but have not yet been able to find the right way to break into the cross border market.

If your company is ready to take advantage of the current favorable conditions for mergers and acquisitions, then contact Kosmidis & Partners today and let our lawyers advise you on the appropriate requirements of Greek law.