Law 5202/2025 («the Law»), through the incorporation of Regulation (EU) 2019/452, introduces a national framework for the screening of Foreign Direct Investments («FDIs»). The Law establishes a national mechanism for the assessment and control of investments taking place within Greek territory or potentially having cross-border effects. Additionally, it sets the criteria for subjecting FDIs to screening, the procedures for submission and evaluation of applications, and the competent screening authorities. It also provides for the imposition of risk mitigating measures, prohibition or reversal of investments, and administrative sanctions for non-compliance.
Definitions
- A foreign investor is defined as any natural person or an undertaking of a third country intending to make or having made an FDI, according to Article 2(1) of Regulation (EU) 2019/452 establishing a framework for the screening of FDIs into the Union.
- If an investor from an EU Member State is directly or indirectly controlled by a third country, that investment is also subject to screening.
- A target company is defined as an undertaking established or to be established under Greek law (or otherwise governed by it), in which an FDI or a joint venture with the participation of a foreign investor is or will be made.
- Foreign Direct Investment is defined as an investment of any kind by a foreign investor aiming to establish or to maintain lasting and direct links between the foreign investor and the entrepreneur to whom or the undertaking to which the capital is made available in order to carry on an economic activity in Greece, including investments which enable effective participation in the management or control of a company carrying out an economic activity.
Screening Mechanism
- An FDI in Greece is subject to screening for security or public order reasons if:
(a) It is made by a third country foreign investor and concerns a target company active in sensitive or particularly sensitive sectors.
(b) It is made by an EU-based investor controlled (directly or indirectly) by a third country entity (natural person, undertaking, or government).
(c) An EU-based investor includes a third country entity holding at least 10% of the capital, and the investment concerns particularly sensitive sectors (defined in the Annex of L. 5202/2025).
- An FDI carried out in other Member States of the European Union is subject to assessment for reasons of security or public order, in accordance with Article 11 of the Law.
The sensitive sectors include infrastructure, assets, goods, or services that are essential in the fields of energy, transport, health, information and communication technologies, or digital infrastructure, when the participation in the target company reaches at least 25%. Screening is repeated in the event of an increase in participation to 30%, 40%, 50%, and 75%.
The particularly sensitive sectors include defense and national security, cybersecurity, artificial intelligence, port infrastructure, critical underwater infrastructure, and tourism infrastructure in border areas, when the participation in the target undertaking reaches at least 10%. Screening is repeated in the event of an increase in participation in the target company to 20%, 25%, 30%, 40%, 50%, 60%, 70%, and 75%.
Note: The participation of interest encompasses not only shares held directly by the foreign investor but also those held by undertakings within the investor’s group, family members, or family-controlled organizations or institutions.
Note: Apart from investing through the acquisition of shares or company parts, the Greek FDI also captures agreements relating to (i) the exercise of voting rights; (ii) the entry into a public works or services contract; and (iii) the entry into other type of investment agreements such as (asset) purchase, lease, financial lease, sale and lease back or cooperation agreements.
Excluded investments
- Τhe acquisition of corporate securities intended exclusively for financial investments, without the intention of influencing the management or control of the business (portfolio investments).
- Intra-group restructurings or mergers, provided that the shares held by foreign investors do not increase or the transaction does not entail an increase in the participation of a foreign investor in the management or control of the target company.
- Pending bidding procedures where a binding offer has already been submitted, and contracts for the exploitation of assets that have not been executed as of 23 May, 2025.
Competent authorities
The competent authorities for the screening are the Interministerial Committee for the Screening of Foreign Direct Investments («ICSFDI – Δ.Ε.Ε.Α.Ξ.Ε.») and the Minister of Foreign Affairs. The B1 Directorate of the Ministry of Foreign Affairs acts as the coordinator of the screening process.
Screening and Approval Procedure
The procedure for submitting an FDI for approval includes the following stages, in accordance with Articles 7 and 8 of the Law:
- The foreign investor must submit an application and all required documentation (dossier) to the B1 Directorate before completing the investment.
- Within five (5) days of receiving the application, the B1 Directorate confirms whether the investment falls under the law’s scope and verifies whether the dossier submitted by the investor is formally. In the event of deficiencies or errors, the investor is requested to rectify or supplement the documentation accordingly.
- Within ten (10) days from the initial submission or the rectification of the dossier, the Directorate forwards the file to the ICSFDI President and prepares the meeting.
- The ICSFDI has, within thirty (30) days, to either exempt the investment from the screening procedure or initiate an in-depth review.
- In the event that an in-depth review is launched, the Directorate notifies the European Commission and other Member States, by providing the information of the investment, as per Regulation (EU) 2019/452.
- The ICSFDI may request supplementary information or documents from the investor and summon them for a hearing, as well as seek additional information from third parties, without being subject to confidentiality restrictions, except for legal professional privilege.
- Within thirty (30) days from the commencement of the in-depth review, with the possibility of a thirty (30) day extension, the ICSFDI submits to the Minister of Foreign Affairs a recommendation to allow, prohibit, or subject the foreign investment to conditions or mitigating measures.
- The Minister of Foreign Affairs decides within thirty (30) days from the ICSFDI’s recommendation. If no decision is issued within sixty (60) days, the foreign investment is deemed allowed.
If the target company is in, or about to enter, a state of insolvency, the above deadlines shall be shortened in half. In exceptional cases, the ICSFDI may recommend the imposition of mitigating measures or the prohibition of a foreign investment without conducting an in-depth review.
The ICSFDI may also ex officio the screening procedure for an FDI that falls within the scope of the Law, if the investor fails to submit an application for its screening. In such cases, the provisions regarding the consequences of non-compliance and administrative sanctions apply. Special procedures are provided for monitoring the implementation of imposed conditions or measures.
Penalties and Administrative Sanctions for Non Compliance
If the Minister of Foreign Affairs issues a decision prohibiting or imposing conditions on an FDI, the related transactions are deemed automatically void. Reversal of the transaction or compliance within a specified deadline may be requested.
In cases of failure to submit an application for the screening of a foreign direct investment, omission to provide supporting documents, or submission of false information, may lead to mitigating measures or prohibition of the investment. In such cases, administrative sanctions may be additionally imposed, ranging from 5,000 to 100,000 Euros.
If the investment is implemented despite its prohibition, or in cases of non-compliance with mitigating measures or failure to reverse the investment, sanctions may amount to up to twice the value of the investment.
