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Executive Summary

Greece’s government has steadily increased its positive rhetoric regarding foreign investment since assuming power in 2015. However, the country continues to present a challenging climate for investment, both foreign and domestic. At the end of Q1 2018, public debt reached a high of 179 percent of GDP. The Greek economy ended 2017 with near 1.4 percent growth, after almost a decade of recession. Depressed demand, wage and pension cuts, and high unemployment have led to a considerable rise in the percentage of loans which are non-performing (NPLs), and have undermined the stability of the financial system. Greek banks made progress in 2017 reducing their level of non-performing exposures (NPEs), with NPEs falling to EUR 95.7 billion (43.1 percent of banks’ overall loan books) at the end of December 2017, from a target of EUR 95.9 billion (or 48.5 percent), while also showing improved collections and liquidations. Banks have committed to reduce their stock of NPEs further to EUR 81.5 billion by December 2018.

In August 2015, to prevent national bankruptcy and the country’s potential exit from the Eurozone, Greece and its EU creditors signed a third EUR 86 billion bailout agreement under the auspices of the European Stability Mechanism (ESM). Capital controls were introduced in June 2015 and, although eased considerably since then, are still in place and continue to deter growth in investment activity, both because of transactional difficulties for firms doing international business and broader negative signaling effects.

The current three-year ESM program agreement details fiscal and structural reform obligations Greece must meet in exchange for the disbursement of financing assistance to enable the government to meet its debt obligations. These reforms include enhanced and accelerated privatization of state assets, reduction in government bureaucracy, restructuring of the civil service, improvements to judicial procedures, enhanced tax collection, and new fiscal measures to close the social security system’s deficit. As of April 2018, the government has implemented most of these reforms to the satisfaction of its creditors, and the program is scheduled to conclude in August 2018.

In November 2015, as part of the initial implementation of the August 2015 ESM agreement, Greece recapitalized its four major banks for the third time in five years. Large U.S. and foreign hedge funds participated in a recapitalization of the four major Greek banks. The banking system, saddled with the largest ratio of non-performing loans in the EU, remains constrained in financing the national economy. As a result, businesses, particularly small-and-medium enterprises, still struggle to obtain domestic financing to support operations due to the inflated risk premiums in the sector. In an effort to tackle the issue, and as a requirement of the agreement with the ESM, Greece is establishing a secondary market for NPLs. To date, eleven companies have secured licenses to operate as a debt service provider: Sepal (an Alpha Bank-Aktua joint venture), FPS (a Eurobank subsidiary), Pillarstone, Independent Portfolio Management, B2Kapital, UCI Hellas, Resolute Asset Management, Thea Artemis, PQH, Qquant Master Servicer, and DV01 Asset Management. At least ten more licensees are pending approval by the Bank of Greece. A handful of other companies have submitted applications and are awaiting approval.

In previous years, concerns over economic and political stability within Greece essentially froze most new investment and caused some existing investors to scale down or withdraw entirely from the Greek market. The success in the privatization of Greece’s 14 regional airports, investment in the tourism sector, and the construction of the Trans Adriatic Pipeline (TAP) demonstrated the opportunities that have existed in Greece even during the height of the economic crisis. Greece’s return to economic growth in 2017 and projected growth in 2018 has generated new investor interest in the country. On February 8, 2018, Greece launched a new 7-year bond auction, which achieved a yield of 3.5 percent (against a starting rate of 3.75 percent), and was more than twice oversubscribed, attracting offers of around EUR 7 billion. This was the third attempt to tap international markets since summer 2017. A bond swap took place November 2017 that reached EUR 25.4 billion, and the Greek state issued a new 5-year bond in July 2017, collecting EUR 3 billion with a yield of 4.625 percent. Although Greece is tentatively returning to bond markets, Greece’s public finances continue to remain partly dependent on the country’s international creditors.

Table 1

Measure Year Index/Rank Website Address
TI Corruption Perceptions Index 2017 59 of 180
World Bank’s Doing Business Report “Ease of Doing Business” 2018 67 of 190
Global Innovation Index 2017 44 of 127 https://www.globalinnovation
U.S. FDI in partner country (M USD, stock positions) 2016 USD 628
World Bank GNI per capita 2016 USD 18,880

1. Openness To, and Restrictions Upon, Foreign Investment

Policies Towards Foreign Direct Investment

The Greek government continues to state its desire to increase foreign investment, though the country remains a challenging climate for investment, both foreign and domestic. Despite the most recent EUR 86 billion bailout agreement signed in August 2015 between the Greek government and its international creditors, under the auspices of the ESM, economic uncertainty remains widespread, though sentiment has been broadly improving since 2017.

Numerous additional structural reforms, undertaken as part of the country’s 2015-2018 international bailout program, aim to welcome and facilitate foreign investment, and the government has publicly messaged its dedication to attracting foreign investment. The Trans Adriatic Pipeline (TAP) is one example of the government’s commitment in this area. In November 2015, the Greek government and TAP investors agreed on measures to begin construction in 2016 for the pipeline, and construction is currently underway.

Nevertheless, many structural reforms have created greater challenges to investors and established businesses in Greece. The country has undergone one of the most significant fiscal consolidations in modern history, with broad and deep cuts to public expenditures and significant increases in labor and social security tax rates, which have offset improved labor market competitiveness achieved through significant wage devaluation. Moreover, corruption and burdensome bureaucracy continue to create barriers to market entry for new firms, permitting incumbents to maintain oligopolies in different sectors, and creating scope for arbitrary decisions and rent-seeking by public servants.

Limits on Foreign Control and Right to Private Ownership and Establishment

As a member of the EU and the European Monetary Union (the Eurozone), Greece is required to meet EU and Eurozone investment regulations. Foreign and domestic private entities have the legal right to establish and own businesses in Greece; however, the country places restrictions on foreign equity ownership higher than those imposed on average in the other 17 high-income OECD economies. The government has undertaken EU-mandated reforms in its energy sector, opening much of it up to foreign equity ownership. Restrictions exist on land purchases in border regions and on certain islands because of national security considerations. Foreign investors can buy or sell shares on the Athens Stock Exchange on the same basis as local investors.

Other Investment Policy Reviews

The government has not undergone an investment policy review by the Organization for Economic Cooperation and Development (OECD), the World Trade Organization (WTO), or United Nations Committee on Trade and Development (UNCTAD), or cooperated with any other international institution to produce a public report on the general investment climate. However, in March 2016, the OECD published an economic survey describing the state of the economy and addressing foreign direct investment concerns. The government has sought the OECD’s counsel and technical assistance to carry out select reforms from the recommendations and develop additional reforms in line with the government’s emphasis on the social welfare state.

Business Facilitation

Greece’s business registration entity, GEMI (General Commercial Register), has the basic responsibility for digitizing and automating the registration and monitoring procedures of commercial enterprises. More information about GEMI can be found at . The online business registration process is relatively clear, and although foreign companies can use it, the registration steps are currently available only in Greek. In general, a company must register with the business chamber, tax registry, social security, and local municipality. Business creation without a notary can be done for specific cases (small/personal businesses, etc.). For the establishment of larger companies, a notary is mandatory.

The country has investment promotion agencies to facilitate foreign investments. “Enterprise Greece” is the official agency of the Greek state, under the supervision of the Ministry of Economy, Development, and Tourism, charged with promoting investment in Greece, exports from Greece, and with making Greece more attractive as an international business partner. Enterprise Greece provides the full spectrum of services related to international business relationships and domestic business development for the international market. Enterprise Greece offers the complimentary services of an Investor Ombudsman for investment projects exceeding EUR 2,000,000. The Ombudsman is available to assist with specific bureaucratic obstacles, delays, disputes or other difficulties that lead to intractable differences, a deadlock, a standstill, or similar difficulties regarding the investment project.

The General Secretariat for Strategic and Private Investments streamlines the licensing procedure for strategic investments, aiming to make the process easier, smoother, and more attractive to investors.

Greece has adopted the following EU definition regarding micro, small, and medium size enterprises:

  • Micro Enterprises: Fewer than 10 employees and an annual turnover or balance sheet below EUR 2 million.
  • Small Enterprises: Fewer than 50 employees and an annual turnover or balance sheet below EUR 10 million.
  • Medium-Sized Enterprises: Fewer than 250 employees and annual turnover below EUR 50 million or balance sheet below EUR 43 million.

Outward Investment

The Greek government does not have any known outward investment incentive programs. Ongoing capital controls impose restrictions or additional procedures for any entity seeking to remove pre-existing large sums of cash from Greek financial institutions.

Enterprise Greece supports the international expansion of Greek companies. While no incentives are offered, Enterprise Greece has been supportive of Greek companies attending the U.S. Government’s Annual SelectUSA Investment Summit which promotes inbound investment to the United States.

2. Bilateral Investment Agreements and Taxation Treaties

Greece and the United States signed the 1954 Treaty of Friendship, Commerce, and Navigation, which provides certain investment protection, such as acquisition and protection of property and impairment of legally acquired rights or interests.

Greece has Bilateral Investment Treaties (BITs) with:

  1. Albania
  2. Algeria
  3. Argentina*
  4. Armenia
  5. Azerbaijan
  6. Bosnia and Herzegovina
  7. Bulgaria
  8. Chile
  9. China
  10. Congo*
  11. Croatia
  12. Cuba
  13. Cyprus
  14. Czech Republic
  15. Egypt
  16. Estonia
  17. Georgia
  18. Germany
  19. Hungary
  20. India
  21. Iran
  22. Jordan
  23. Kazakhstan*
  24. Korea
  25. Kuwait*
  26. Latvia
  27. Lebanon
  28. Lithuania
  29. Mexico
  30. Moldova
  31. Montenegro
  32. Morocco
  33. Poland
  34. Romania
  35. Russian Federation
  36. Serbia
  37. Slovakia
  38. Slovenia
  39. South Africa
  40. Syrian
  41. Tunisia
  42. Turkey
  43. Ukraine
  44. United Arab Emirates
  45. Uzbekistan
  46. Vietnam

*Signed, but not in force

Bilateral Taxation Treaties

Greece and the United States signed a Treaty for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income in 1950. As an EU member state, Greece does not have a bilateral Free Trade Agreement (FTA) with the United States, but is a party to all U.S.-EU agreements. Greece reached an agreement in substance on November 30, 2014 on the terms of an intergovernmental agreement with the United States to implement the Foreign Account Tax Compliance Act (FATCA), which was signed January 2017.

9. Corruption

Based on a research by Ernst & Young for calendar year 2016 (published in 2017), 81 percent of employees in Greek businesses consider that corruption is widespread in the country. Only 22 percent said they knew their business had a special hotline for denouncing corruption cases. Only two percent of Greek business employees have resigned from their post on the grounds of “unethical behavior.”

Bribery is a criminal act and the law provides severe penalties for infractions, although diligent implementation and haphazard or uneven enforcement of the law remains an issue. Historically, the problem has been most acute in the area of government procurement, as political influence and other considerations are widely believed to play a significant role in the evaluation of bids. Corruption related to the health care system and political party funding are also areas of concern, as is the fragmented anti-corruption apparatus. NGOs and other observers have expressed concern over perceived high levels of official corruption. Permanent and ad hoc government entities charged with combating corruption are understaffed and underfinanced. Various polls have indicated that 95 percent of Greeks believe corruption is a widespread problem in the country, placing Greece well above the EU average of 76 percent. Three out of five Greeks polled said they believed corruption affected their everyday lives, compared to an EU average of only 26 percent.

The Ministry of Justice prosecutes cases of bribery and corruption. In cases where politicians are involved, the Greek parliament can conduct investigations and/or lift parliamentary immunity to allow a special court action to proceed against the politician. A December 2014 law does not allow high ranking officials, including the prime minister, ministers, alternate, and deputy ministers, parliament deputies, European Parliament deputies, general and special secretaries, regional governors and vice governors, and mayors and deputy mayors to benefit from more lenient sentences in cases involving official bribes.

On March 19, 2015, the government passed Law 4320, which provides for the establishment of a General Secretariat for Combatting Corruption under the authority of a new Minister of State. Under Article 12 of the Law, this entity drafts a national anti-corruption strategy, with an emphasis on coordination between anti-corruption bodies within various ministries and agencies, including the Economic Police, the Financial and Economic Crime Unit (SDOE), the Ministries’ Internal Control Units, and the Health and Welfare Services Inspection Body. Based on Law 4320, two major anti-corruption bodies, the Inspectors-Controllers Body for Public Administration (SEEDD) and the Inspectors-Controllers Body for Public Works (SEDE), were moved under the jurisdiction of the General Secretariat for Combatting Corruption. A Minister of State for combatting corruption was appointed to the cabinet following the January 2015 elections and given oversight of government efforts to combat corruption and economic crimes. The minister drafted coordinated plans of action and monitored their implementation, and was given operational control of the Economic Crime division of the Hellenic Police, the SDOE, ministries’ internal control units, and the Health and Welfare Services’ inspection body. Following the September 2015 national elections, the cabinet post of Minister of State for combatting corruption was abolished, and those duties were assigned to a new alternate minister for combatting corruption in the Ministry of Justice, Transparency, and Human Rights.

Legislation passed on May 11, 2015 provides a wider range of disciplinary sanctions against state employees accused of misconduct or breach of duty, while eliminating the immediate suspension of an accused employee prior to the completion of legal proceedings. If found guilty, offenders could be deprived of wages for up to 12 months and forced to relinquish their right to regain a senior post for a period of one to five years. Certain offenders could also be fined from EUR 3,000 to EUR 100,000. The law requires income and asset disclosure by appointed and elected officials, including nonpublic sector employees, such as journalists and heads of state-funded NGOs. Several different agencies are mandated to monitor and verify disclosures, including the General Inspectorate for Public Administration, the police internal affairs bureau, the Piraeus appeals prosecutor, and an independent permanent parliamentary committee. Declarations are made publicly available. The law provides for administrative and criminal sanctions for noncompliance. Penalties range from two to ten years’ imprisonment and fines from EUR 10,000 to EUR 1 million.

UN Anticorruption Convention, OECD Convention on Combatting Bribery

Greece is a signatory to the UN Anticorruption Convention, which it signed on December 10, 2003, and ratified September 17, 2008. As a signatory of the OECD Convention on Combating Bribery of Foreign Government Officials and all relevant EU-mandated anti-corruption agreements, the Greek government is committed in principle to penalizing those who commit bribery in Greece or abroad. The OECD Convention has been in effect since 1999. Greek accession to other relevant conventions or treaties:

  • Council of Europe Civil Law Convention on Corruption: Signed June 8, 2000. Ratified February 21, 2002. Entry into force: November 1, 2003.
  • Council of Europe Criminal Law Convention on Corruption: Signed January 27, 1999. Ratified July 10, 2007. Entry into force: November 1, 2007.
  • United Nations Convention against Transnational Organized Crime: Signed on December 13, 2000. Ratified January 11, 2011.

Resources to Report Corruption

Government Agency
Organization: The Inspectors-Controllers Body for Public Administration
Address: 60 Sygrou Avenue, 11742, Athens
Telephone number: +30-213-215-8800
Email address:

Watchdog Organization
Organization: Transparency International Greece
Address: 4 Thetidos Street, 115 28, Athens
Telephone number: +30-210-722-4940
Email address:

Investment Climate Statements
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