CHAPTER A (ARTICLES 1-23)

Article 5
OWN PARTICIPATION

1 The investor's own participation in subsidized productive investments or a part thereof up to 5 billion drachmas may not be less than 40% of the total investment cost in Areas B and C, 30% in Area D and 20% in Thrace. In Area A, and only in the cases of paragraph 2, article 9, the minimum own participation is 40%.

In the case of productive investments of a total cost of over 5 billion drachmas and up to a maximum of 25 billion drachmas, the percentage of minimum own participation for that part of the productive investment in excess of 5 billion drachmas is 33%. This percentage applies to all the Areas of the country, including Area A (see table below).

TABLE OF OWN PARTICIPATION

Area   (%)   Type of Investment					Size of Investment  
								(in billion dr.)
A	33 Productive investments of article 1 which 
	may be realized pursuant to the provisions of article 9.	 5 - 25
	AND THE   
	40 Special investments of article 9, par. 2, relating to the 
	sectors of energy, environment, technology etc.		up to 5

B,C	33 Productive investments of article 1			5 - 25
	40 Productive investments of article 1			up to 5
D	33 Productive investments of article 1			5 - 25 
	30 Productive investments of article 1			up to 5

THRACE  33 Productive investments of article 1		5 - 25
	    20 Productive investments of article 1		up to 5

LAND VALUE AS PART OF OWN PARTICIPATION AND CONDITIONS

For the purposes of calculating the own participation of the investor, the value of the land is taken as being that value on which the property transfer tax was levied.

REDUCED OWN PARTICIPATION

The minimum percentage of own participation of the investor with regard to investments which have been awarded an investment grant and interest rate subsidy (corresponding to an area in which these incentives are more favourable than those in the area in which the investment is realized) is equal to the percentage provided for investments in that more favourable area.
Particularly with regard to investments of instance (e) of par. 1, article 9, own participation is reduced by 5 percentage points per area.
This applies to investments by special institutions and workshops implementing rapid work reorientation programmes for persons with special needs as well as to investments in which the majority interest belongs to persons with special needs or those in which the majority of those employed are persons of this category.

2 The investorŐs own participation shall, in the case of personal enterprises making an investment of up to 60 million drachmas, also constitute equity capital and in the case of other undertakings, with the exception of co-operatives, company stock. In the case of newly-established co-operatives, their paid-up capital shall be regarded as their own participation, while for co-operatives already operating, the amount of increase of their capital or the creation of special reserves or the use of reserves other than legal reserves shall be regarded as own participation. With respect to other cases, the paid-up capital of newly established companies shall be regarded as their own participation, while for undertakings already operating, the amount of increase of their company stock, resulting from new contributions of the partners or, as the case may be, the taxed reserves, as provided under current legislation, other than legal reserves, without an increase in share or company capital being compulsory and on the condition that such reserves cannot be distributed before ten years have passed following completion of the investment, shall be considered as own participation. Such reserves shall appear in a separate account in the undertakingŐs account books. In the event that they are distributed before ten years have passed, the penalties provided in this paragraph shall be imposed accordingly. In order for the taxed (extraordinary) reserves of an undertaking to constitute own participation in an investment, the adequacy of the undertakingŐs liquidity after deduction of its available funds which are to constitute own participation must be checked at the stage of investment assessment.
Personal enterprises carrying out investments of up to 60 million drachmas which have been eligible for the provisions of the present law may retain their company form.
Decisions of the Minister of National Economy, published in the Government Gazette, may adjust the amount beyond which the investor must have a corporate form. The decision approving the investmentŐs eligibility for the provisions of the present law shall stipulate the terms and conditions governing the investorŐs own participation. Should the competent monitoring bodies referred to in article 8 ascertain that the aforesaid terms and conditions have not been fulfilled, the decision approving the investmentŐs eligibility shall be revoked and any investment grant or interest subsidy disbursed shall be returned in accordance with the provisions of the Code of Public Revenue Collection.

The percentage of own participation in an investment which has been approved by virtue of the initial act conferring eligibility cannot be reduced during the realization of the said investment.

DISBURSEMENT

3 The disbursement of a State grant for an investment shall be effected after it has been ascertained, on the basis of a report by the monitoring bodies referred to in paragraph 2, article 8, that 50% of the investorŐs minimum own participation (according to the area in which the investment is being realized) and 25% of the financing bankŐs participation (if any) has been defrayed and spent on the investment.

In the event that, for the realization of the investment, no borrowed funds have been used, the State grant shall be disbursed in accordance with the above, after 50% of the investorŐs minimum own participation, according to the area in which the investment is being carried out, and 25% of the remaining sum beyond the compulsory minimum participation has been defrayed and spent on the investment project.

More specifically: a. The grant for investments up to 500 million drachmas (or irrespective of amount in the case of investments realized in Thrace) shall be disbursed in three phases as follows:
–part of the investment grant, equal to 60%, will be disbursed during the realization of the investment in instalments to be determined in the decision of approval and in such a way that it is spent simultaneously with the remaining amount of own participation and loan.
–part of the grant, equal to 20%, will be disbursed following certification of investment completion and the issuing of the relevant decision verifying investment completion.
–the remaining 20% will be disbursed following certification of commencement of the productive operation of the investment and the issuing of the relevant decision verifying commencement of its productive operation.
In the event that the commencement of productive operation is not certified simultaneously with the completion of the investment, productive operation may commence at the latest within one year from the issuing of the decision verifying completion of the investment.
This period of time may not be extended, and after its expiry the decision of approval will be revoked ipso jure and any grant disbursed will be returned.
The commencement of productive operation is certified following an on-the-spot check by the monitoring bodies of article 8, and provided at least half the permanent jobs (stipulated in the decision of approval) have been created and purchases of raw materials and sales of products or services have been carried out to an extent which substantiates the operation of the unit.

b. The grant for investments of over 500 million drachmas shall be disbursed in three phases as follows:
–part of the investment grant, equal to 40%, will be disbursed during the realization of the investment in instalments to be determined in the decision of approval and in such a way that it is spent simultaneously with the remaining amount of own participation and loan.
–part of the grant, equal to 40%, will be disbursed following certification of investment completion and the issuing of the relevant decision verifying investment completion.
–the remaining 20% will be disbursed following certification of commencement of the productive operation of the investment and the issuing of the relevant decision verifying commencement of its productive operation, in accordance with that set out above.
The period allowed for the performance of the investment works shall be stipulated in the decision of approval.
The disbursement of each instalment of the grant, except the first and the last, may be effected provided a letter of guarantee issued by a recognized bank is submitted to the Private Investments Department or the appropriate Regional Department.
The content of the letter of guarantee shall be determined by decisions of the Minister of National Economy.

4 With respect to price checks, the advisory committees may, during the process of approval, submit data to the Price Control Board concerning the value of machinery and equipment to be imported.
The Price Control Board may ask the investor, the supplying company or third parties for any additional data and information which the Board may deem necessary in order to verify the value of the aforesaid equipment for price control purposes. For the purpose of checking the cost of other fixed assets of the investment, the advisory committees will use all types of substantiating data such as norms to calculate the cost of building and other construction work, provided by the Technical Chamber of Greece, which will be revised at least every six months and will take into consideration the nature and type of building construction in question. If it is found by any means whatsoever that the investor has overstated the cost of the investment, his application seeking eligibility for the benefits of this law shall be rejected or any approval already granted shall be revoked by decision of the Minister of National Economy. Regional organs of the Price Control Board may be set up by decision of the Minister of National Economy published in the Government Gazette.

COMMENCEMENT OF INVESTMENT

5 a. Investments under this law may commence following the submission of the relevant application and the required supporting documents to the competent service stipulated in paragraph 6a of article 6.
Expenses for investment works incurred prior to this date are not taken into account in calculating the cost of the investment, nor are they considered part of the investorŐs own participation.

b. The commencement of an investment prior to publication of the decision making it eligible for the benefits of this law shall be on the sole responsibility of the investor and shall not bind the advisory committee as to its judgement nor the Administration as to its decision whether to make the investment eligible for the benefits of this law.

c. Preliminary soil works (earthmoving, fencing), preliminary soil surveys in the case of mining undertakings, the cost of having the building permit issued and of feasibility studies, the contracting and drawing of a loan, the opening of credit and ordering of machinery, mechanical and other equipment shall not constitute Ôcommencement of investmentŐ and may be undertaken prior to submission of the relevant application.

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