Brief Presentation New Development Law 4399/2016

Transcription

1 Brief Presentation New Development Law 4399/2016

2 a) Grant : b) Leasing Subsidy : c) Tax exemption : 1.TYPES OF AID Free provision of funds by the State for the coverage of part of the aided expenditures of the investment plan defined as expenditure rate. Coverage of part of the disbursed leasing installments for the acquisition of new machinery and other equipment by the State. It is determined as a percentage of the acquisition value of the equipment embedded in the disbursed installments. The granting of the lease cannot exceed 7 years. Tax exemption consisting of exemption from payment of income taxes on earnings before taxes, which arise according to the tax legislation, from all of business operations, minus the tax for the legal person or legal entity for profits distributed or undertaken by the partners. The amount of tax relief is calculated as a percentage of the value of the aided expenditure of the investment plan or the value of new machinery and equipment acquired under lease and constitutes an equivalent reserve. d) New employment cost subsidy Part of wage costs (article 2, par.31 GER) are covered by the State for new jobs created and associated with the investment plan and which do not receive any further State aid. e) Stabilization of income tax rate f) Financing of business risk via equity fund Stabilization of the income tax rate (tax system), according to par. 1 of Article 67 Financing of business risk via equity fund, in accordance with Article 21 of the GER, through the following structures: aa. equity or quasi-equity capital or sponsorship in order to provide investments through financing of business risk directly or indirectly to eligible enterprises, bb. loans which will provide investments through financing of business risk directly or indirectly to eligible enterprises. 2. AID SCHEMES In the present law investment plans subsidized according to schemes subjected to other legal rule of the European Union may be subject, further to prior notification and approval procedure by the European Commission. Specific issues are determined by decisions of the Minister of Economy, Development and Tourism, or of any other competent minister as well as any differences arising from the application of the EU procurement rules. Regimes Composition and Announcement The aid schemes of the new Development Law are 8 and are announced under the respective decisions of the Minister of Economy, Development and Tourism and any other competent Ministers. Moreover, there is the possibility of a parallel proclamation of aid schemes particularly for the first period of application of the law. The following table briefly describes the main characteristics and the amount per aid scheme:

3 Aid Scheme Mechanical Equipment Reinforcements General Entrepreneurship New Independent SMEs Innovation Investments for SMEs Synergies & Networking Reinforcement Incentive Tax Exemption Tax Exemption, Leasing Subsidy, New employment cost subsidy, Grant Tax Exemption, Leasing Subsidy, New employment cost subsidy, Grant Tax Exemption, Leasing Subsidy, New employment cost subsidy, Grant Tax Exemption, Leasing Subsidy, New employment cost subsidy, Grant Reinforcement Amount According to the RAM (Regional Aid Map) According to the RAM, except investment projects to be supported by a grant According to the RAM, except investment projects to be supported by a grant According to the RAM, except investment projects to be supported by a grant According to the RAM, except investment projects and the additional rates of article 11 Evaluation and Control Process Direct Evaluation Comparative Evaluation Comparative Evaluation Comparative Evaluation Comparative Evaluation Comments An administrative inspection is going to be carried out as well as an onthe-spot inspection on a 20% proposal sample Investment plans of article 12 can only receive a grant, with an aid rate amounting to 70% of the maximum RAM rate. Beneficiaries: Only new or under foundation Independent SMEs. For the grant the aid rate will be 70% of the maximum of the RAM except for projects under the article 12 which will receive 100% of the RAM rate. Beneficiaries: only SMEs for investment projects related to technology development, innovative products and under conditions. For the grant the aid rate will be 70% of the maximum of the RAM except for projects under the article 12 which will receive 100% of the RAM rate. The aid is granted only to the institutions which manage clusters (at least 4-6 business

4 depending on the geographical area) Financial Intermediaries- Holding Funds Integrated Spatial and Sectoral Projects Large Investments Loans or grants Tax Exemption, Leasing Subsidy, New employment cost subsidy, Grant Stabilization of tax rate in force during the application for submission or tax exemption, rapid licensing Specifications Expected Tax exemption up to 10% of the subsidized cost Specifications Expected Direct and Comparative Evaluation for each project case Direct Evaluation In each investment scheme the participation of at least 8 beneficiaries of Article 52 is compulsory. Large businesses are not reinforced by the grant incentive. Eligible budget: over 20m and creation of at least two jobs per 1 million euros of eligible investment cost 3. AREAS OF ACTIVITY FOR INVESTMENT PROJECTS Within the aid scheme of the Investment Law, investment projects in all sectors of the economy fall under, apart from the exceptions listed below. EXCEPTIONS The following do not fall under the provisions of the New Development Law 4399/2016: a. The steel sector as defined in point 43 of Article 2 GER by category, b. The synthetic fibers sector as defined in point 44 of Article 2 GER by category. c. The coal sector, as coal is defined in point 13 of Article 2 GER concerning state aids towards the coal industry, d. The shipbuilding sector. By a joint ministerial decision of the co-ministers launched a regime might be announced by exception in the shipbuilding sector further to a prior approval of the European Commission, e. The production, distribution and energy infrastructure sector, with reservation to case a 'of paragraph 4, f. The transportation sector (and related infrastructures), as defined in point 45 of Article 2 GER, by category.

5 Also excluded are: ü ü ü ü Firms in difficulty as defined in paragraph 18 of Article 2 GER (Article 1, paragraph 4 case c GER) Businesses, which have made a pause of the same or a similar activity within the European Economic Area during the last two years prior to the submission of the request for regional investment aid, or which at the time of submission of the request for aid, have planned to make cessation of such activity within a maximum of two (2) years after completion of the project for which they have applied for aid in the specific area (ARTICLE 13 case d GER). Companies which implement investment projects carried out on the initiative and on behalf of the State, based on a relevant work performance, concession or service contract. Investment projects of bodies for which a recovery order is pending, following a previous Commission decision, in which the aids are declared unlawful and incompatible with the Common Market. The following areas and sectors of economic activity, as determined on the basis of "National Nomenclature of Economic Activities - Activity Code Numbers 2008" of the Greek Statistical Authority, and subject to Articles 52-58, namely: -05- (Coal and lignite mining) up to -09- (Mining support activities) Collection, treatment and supply of water except for water desalination services by exclusively using RES Building Constructions Civil engineering projects Specialised construction activities Wholesale and retail trade, repair of motor vehicles and motorcycles Wholesale Retail Warehousing and support activities for transportation, without prejudice to the case b of paragraph Postal and courier activities Accommodation, without prejudice to case c of paragraph Food and beverage service activities Programming and broadcasting activities Financial service activities Insurance, re-insurance and pension funds Activities auxiliary to financial services and insurance activities Real estate management Legal and accounting activities Activities of head offices - Management consultancy activities Architectural and engineering activities - technical testing and analysis Scientific research and development Advertising and market research Veterinary activities Rental and leasing activities Employment activities Travel agency, tour operator, reservation services and related activities Security and investigation activities Services for buildings and landscape Office administrative, office support and other business support activities to enterprises Public administration and defense - compulsory social insurance Education Human health activities, except for investment plans for health and medical tourism Assistance activities with accommodation, excluding investment plans for health and medical tourism. By joint decision of the Ministers of Economy, Development and Tourism, and as appropriate of the co-ministers, the terms and conditions of subjected investment projects having the Activity Codes -86- and -87- are specified, as well as any other related issue concerning their implementation.

6 -88- Social work activities without accommodation Creative activities, arts and entertainment Libraries, archives, museums and other cultural activities, without prejudice to paragraph 3. Exceptionally supported are: a (library services), b (museum activities) Gambling and betting Sports activities and amusement and recreation activities, without prejudice to subcase zz of case c of paragraph Organizational activities Computer and personal or household items repair Other activities of personal services, without prejudice to subcase zz of case c of paragraph Household activities as employers of domestic personnel Private households activities, concerning the production of non-distinct goods and services for own use Offshore organizations and agencies activities. Excluded and therefore reinforced are the investments concerning: a. The energy production, distribution and infrastructure, aa. small Hydro-Power Stations of an installed power of 15 MW, according to Article 41 GER and the law 3468/2006 (Α 129), as applied, bb. energy cogeneration units of high efficiency by RES according to the Article 40 GER, cc. hybrid RES plants in Non-Interconnected Islands (NII) with a guaranteed power up to 5 MW, according to the Article 41 GER, dd. heating and cooling production from renewable energy sources in accordance with Article 41 GER ee. energy-efficient district heating and cooling systems, according to the law 4342/2015 (A143) and the Article 46 GER, ff. sustainable production of biofuels which are not based on edible plants and are not subject to an obligation of supply or blending, in accordance with Article 41 GER, as well as conversion of existing biofuel plants, which are based on edible plants into sustainable biofuel production units, which are not based on edible plants and are not subject to supply or blending obligations under Article 41 GER. b. The storage sector and support activities towards transportation, the following sectors are exceptionally supported: aa [Marinas services (marinas)], bb (Waterways operation services) and, cc [Transportation services with supply chain management to third parties (logistics)] c. In the tourism sector the following investment categories are supported: aa. establishment or extension of hotel units of at least three (3) stars, bb. comprehensive modernization of hotel units belonging to or being upgraded to a category of at least three (3) stars, after a five year period has elapsed from the beginning of operations of the unit, or from the date of completion of the previous investment concerning an integrated modernization of the unit, cc. expansion and modernization of integrated hotel facilities that have ceased operations, provided that during the ceasing time there has not been a change of usage of the building and that through the expansion or modernization of an integrated form, they become upgraded to a category of at least three (3) stars, dd. establishment, expansion and modernization of an integrated form for Touristic Organized Camps (camping), which belong to or are upgraded to a category of at least three (3) stars, ee. establishment and modernization of an integrated for of hotel units within designated traditional or listed buildings, which belong or are upgraded to a category of at least two (2) stars, ff. complex tourist accommodations, as defined by the law 4276/2014 (A 155), except for the part thereof relating to the to-be transferred or to long-term lease buildings and facilities and provided that they are submitted as a single investment plan under the provisions of the Articles 65 to 69, ff. Special Tourism Infrastructures {convention centers, golf courses, tourist ports, ski resorts, theme parks, spa tourism facilities [thermal spa care units, thermal spa tourism centers, thermalism tourism spa centers, thalassotherapy centers, spas], sport coaching tourism centers, mountain refuges, car racing motorways}, as defined by the law 4276/2014 (A 155)

7 gg. agritourism facilities or wine tourism facilities, when an investment plan is submitted by business clusters, hh. establishment of new youth hostels, if the beneficiaries are those referred to in subparagraphs c and d of paragraph 1 of Article MAIN CONDITIONS FOR ADMISSION Legal status of investment institutions Under aid scheme of the law, subjected are the firms established or having a branch in Greek Territory at the time of commencement of the investment project while having one of the following forms: - Sole Proprietorship - Commercial Company - Cooperative - Social Cooperative Enterprises under Law 4019 / 2011 (A'216), Agricultural Cooperatives. Producer Groups, Rural Partnerships under Law. 4384/2016 (A ' 78). - Under establishment or merging companies, with the obligation to have completed disclosure procedures before beginning operations on the investment project, - Enterprises operating under consortium form provided they are registered in the General Commercial Registry Books, - Public and municipal companies and their subsidiaries, provided that: aa. They have not been assigned to serve the public purpose bb. They have not been assigned by the state with their exclusive service supply cc. Their operations through public funds is not assisted, for the maintenance period of the long term liabilities of Article 21 Entities whose investment plans are subject to the provisions of the present must, in addition to the requirements of Article, keep from the time of beginning of operations of the project, a double-entry accounting system (category C books) or a single-entry accounting system (B class books) for investment projects whose eligible costs do not exceed the amount of three hundred thousand (300,000) euros, as well as separate account monitoring of sizes related to the project implementations and the terms of the qualification decision. In notice decisions additional accounting books and other claims may be set, with which the investment project institutions with a single-entry accounting system (category B books) must comply with, as well as cases in which the investment project institutions must keep a double-entry accounting system (category C books) before submission of the qualification application. Enterprises whose investment projects of worth over five hundred thousand (500,000.00) euros qualify for aid under the present law, are obliged to operate in a commercial company or cooperative form, or to take this legal form before they begin any operations on the investment project. Content of investment projects Investment projects should relate to:

8 the creation of a new unit the expansion of the existing plant capacity production diversification of a unit for products or services which have not been produced ever by it, provided that the eligible costs are higher than twice (200%) the book value of assets used again, as recorded in the financial year preceding the project s qualification application a fundamental change in the overall production process of an existing unit, provided that the eligible expenditures exceed the depreciation during the three previous fiscal years of the assets related to the activity, which is to be modernized acquisition of all assets owned by a business establishment which has been closed and is bought by an investor who is not related to the seller and excluding the simple acquisition of a company's shares. Investment projects under the present aid arrangements should ensure the necessary conditions in order to avoid discrimination against vulnerable groups, particularly regarding accessibility to infrastructures, services and goods. Beginning of implementation of investment projects Beginning of operations is the first time point between either the start of construction work on the investment or the first legally binding commitment to order equipment or other undertaking which consists the investment to be irreversible. The purchase of land and preparatory work, such as obtaining permits and feasibility studies are not considered to be beginning of operations. For acquisitions, the beginning of operations, is considered to be the time of acquisition of the assets directly associated with the acquired facility (Article 2 point 23 GER). The beginning of operations of the project before submitting the qualification application will result in the rejection of the entire project. Own contribution of the investor The participation of the institution in the project s cost can be obtained either through own funds or by external financing, provided that the twenty-five percent (25%) of the total investment cost does not contain any state aid, public support or provision (Article 14 paragraph. 14 GER). Profits Clause In order for the subordinate enterprises to qualify to receive aid under the forms of granting and leasing subsidy, they must have shown profits at least for one fiscal year during the last seven (7) years prior to the fiscal year of the qualification application. The abovementioned condition is not applicable in case of Social Cooperative Enterprises Agricultural Cooperatives, Producer Groups, Rural Partnerships and companies created within the last seven (7) years prior to the submission of the qualification application. 5. TIME FOR SUBMISSION OF APPLICATIONS FOR ADMISSION The deadline of submission of applications is determined by proclamation of every regime and is estimated at two months - time by the proclamation of each regime.

9 6. REINFORCED EXPENDITURES Investment projects are reinforced for the following expenditures: a. For tangible assets a. The construction, expansion and modernization of building facilities and special and auxiliary facilities of buildings and structures, in order to ensure accessibility for people with disabilities, as well as landscaping. These costs cannot cumulatively exceed 45% of the total regional aid eligible expenditures. This rate stands at 60% for the corresponding costs of investment projects of cases c of paragraph 4 of Article 7 (tourism investment projects) and at 70% for the corresponding costs of investment projects under sub cc of case b of paragraph 4 (3PL logistics). The above rate stands at 80% for investment projects implemented in buildings, which are labeled as listed. b. The purchase of all existing fixed assets (buildings, machinery and other equipment), or also part of the assets of a production concerning the assisted SMEs, which are directly associated with a production unit, provided that the following conditions are cumulatively applied: aa. this unit has ceased its operation, bb. the purchase is made by the investment entity which is not related to the seller, cc. transaction is carried out under normal market conditions, dd. machinery and other equipment cannot be older than seven (7) years from the date of their first purchase. In cases where assets have previously received grants or have been subsidized through development laws or other aid schemes, they are excluded from the eligible costs of the subjected project. c. The purchase and installation of new machinery and other equipment, including technical installations and transportation vehicles, moving within the area of the subsumed unit. d. The payments under the lease of new modern machinery and other equipment whose use is obtained, and provided that the leasing contract provides that the equipment will revert to the ownership of the lessee at the end of the contract. e. Modernization costs of special facilities (not related to buildings) and mechanical installations. b. For intangible assets: α. transfer of technology through the acquisition of patent rights, licenses, patents, know-how or unpatented technical knowledge; b. quality control and assurance systems, certification, procurement and installation of software and business organization systems. The above described expenses must cumulatively meet the following conditions: aa. be used exclusively in the establishment receiving the aid and remain connected with the project for which the aid is granted for at least five (5) years or three (3) years in the case of SMEs, bb. be included in the depreciable assets of the business, to which the aid is granted, cc. be purchased under market conditions from third parties not connected to the buyer. For large companies, eligible costs of intangible assets may not exceed 50% of the total regional aid eligible expenditures For SMEs the maximum rate stands at 75%. In case eligible costs are calculated based on the estimated wage costs of new jobs resulting from the implementations of the investment project, the following conditions must be cumulatively, met: a. The investment project involves a net increase in the number of workers impressed in Annual Working Units (AWU) in the business establishment and respectively in the company, compared to the AWUs of the previous twelve months from the date of submission of the qualification application,

10 b. filling all jobs within three (3) years from the date of completion and beginning of the investment's production function, c. each job created through the investment will be maintained in the specific region for at least five (5) years for large and medium-sized enterprises and for three (3) years for small businesses, from the date of its first filling. Investment Expenditurea Outside the General Exemption Regulation (G.E.R.) 1. Investment costs for consultancy services to SMEs (Article 18 GER). These costs relate to studies and consultancy fees for investment projects of small and medium enterprises and cannot be subject to continuous or periodic activity nor relate to the usual operating expenditures of the business. 2. Start-up costs (Article 22 GER) for under establishment small and micro enterprises. 3. Innovation costs for SMEs (Article 28 GER), as specified below: a. expenditures for acquisition, validation and protection of patents and other intangible assets, b. highly qualified staff payroll, which is engaged in development and innovation activities, detached for a specified period of time by a research and knowledge dissemination agency or by a large company, in new positions which have been created for this purpose in the company and does not replace other staff, c. costs of consultancy and support services for innovation. 4. Expenditure for procedural and organizational innovation for SMEs (Article 29 GER), as specified below: α. personnel costs, b. costs concerning instruments, equipment, buildings and land, for as long as needed, and provided that they are used for the project, c. costs for knowledge and patents bought or obtained under license from external sources in compliance with the principle of equidistance, d. additional overheads and other operating expenses, including costs of materials, supplies and similar products which are necessary for the implementation of the project. Expenditures for collaborative innovation clusters (business innovation clusters - innovation clusters) (Article 27, paragraphs 7 and 8 GER): a) for investment reinforcements, the investment expenditures in intangible and tangible assets for the creation or enhancement of collaborative innovation clusters and b) for operation reinforcements, staff costs and administrative expenses (including overhead) concerning: aa) coordination of the cluster to facilitate cooperation, exchange of information and provision or disposal of specialized and customized business support services, bb) promotion of the cluster in order to increase the participation of new companies or organizations, as well as to increase the promotion of the cluster, γγ) the management of installations of the cluster, the organization of training programs, workshops and conferences to support knowledge sharing, networking and international cooperation. Operational aids for the operation of collaborative innovation clusters (business innovation clusters - innovation clusters) can be given for a period not exceeding ten (10) years.

11 Expenditures on energy efficiency measures (Article 38 GER). Eligible costs are the extra investment costs necessary in order to achieve the highest level of energy efficiency. Expenditures not directly associated with a higher energy efficiency level do not constitute eligible costs. No aid is granted if improvements are made in order to ensure compliance of companies with EU standards, which are already approved, even if they have not yet entered into force. Investment expenditures for high-efficiency cogeneration from RES (Article 40 GER). Investment aid is granted only to a newly installed or renovated production capacity. Eligible costs are the extra investment costs in equipment installation needs in order for the unit to function as high-efficiency cogeneration unit, compared to conventional electricity production or heating of the same capacity, or the extra investment costs for upgrading the performance, if the existing plant has already achieved a high performance level. In the case of power plants of over 1MW, eligible costs are only those corresponding to heat production which is utilized for heating processes or spaces. Expenditures for energy production from renewable sources (Article 41 GER). For self-production of electricity and / or heat / cold production from RES for own use, for investment projects concerning electricity production from small hydro, for investment project concerning heat / cooling generation from renewable sources, as well as investment projects concerning sustainable biofuels production which are not based on edible plants and are not subject to supply and blending obligations, eligible are the extra investment costs necessary for the promotion of energy generation from renewable sources, as long as they are granted to new installations only. Specifically, for RES Hybrid Plants projects in MSV, eligible are storage system costs, as long as they are granted to new installations only. Expenditures not directly associated with a higher level of environmental protection are not eligible. Costs for installation of efficient district heating and cooling (Article 46 GER). Eligible costs for the plant are the extra costs necessary for the construction, extension and renovation of one or more thermal power plants, so that they can provide efficient district heating and cooling, as provided for in Article 3 of Law / 2015 (A143), compared to a conventional plant. The investment constitutes an integral part of the efficient district heating and cooling energy system. Eligible expenditures for the distribution network are the investment costs. Costs for the remediation of contaminated sites (Article 45 GER). Eligible are the expenses necessary for restoration work, reduced by the increased value of the land. In the case of the rehabilitation of contaminated sites, all costs incurred by a firm while rehabilitating the area can be considered eligible investments, whether or not it is possible to record these costs on its balance sheet as assets. Non-Eligible Expenses Non-Eligible are the expenses concerning : the operating costs of the investment, the purchase of passenger vehicles of up to six (6) seats, the purchase of furniture and office furnishings, except if they are part of hotel equipment, the purchase of plots, land and land parcels. In case of building facilities purchase, the proportion of the expense relating to the value of the land on which they are constructed, cannot be reinforced, the contribution to the share capital value of machinery and other fixed assets, the construction or expansion of buildings on land not owned by the investment entity, unless it has been granted by the Government sector or by a general Government sector organization or rented for this purpose for at least fifteen (15) years from the release date of the qualification decision and has been legally transcribed.

12 7. REINFORCEMENT PERCENTAGES INVESTMENT LOCATION COMPANY SIZE REGION LARGE MEDIUM SMALL EL11 EAST MACEDONIA AND THRACE 35% 45% 55% EL12 CENTRAL MACEDONIA 35% 45% 55% EL14 THESSALY 35% 45% 55% EL 21 EPIRUS 35% 45% 55% EL 23 WESTERN GREECE 35% 45% 55% EL 25 PELOPONNESE EL 41 NORTH AEGEAN 35% 45% 55% 35% 45% 55% EL13 WESTERN MACEDONIA 25% 35% 45% EL 22 IONIAN ISLANDS 25% 35% 45% EL 43 CRETE 25% 35% 45% EL 24 CENTRAL GREECE 25% 35% 45% EL30 ATTICA 20% 30% 40% EL42 SOUTH AEGEAN 20% 30% 40% Table 1: Aid rates from in accordance with the Regional Aid Map to be approved Important Note: The rates of the existing Map, Source: aid / cases / / pdf will be readjusted from up to 15 percentage points and the qualification applications submitted from the entry into force of the schemes of Law 4399/2016 will enter retroactively into force, based on the above rates. The reinforcement rates, which are presented in Table 1 are determined according to the size of the investment entity, the location of the project installation and the aid scheme under which the investment entity is requesting reinforcement. Article 12 of the new Development Law establishes the Special Reinforcement Categories. a. extroverts: SMEs, which increased their outreach, meaning the value of their exports to their turnover, whether at an average rate of at least 10% over the last three years preceding the year of application of the investment project for submission, or at an average rate less than 5% in the last three years preceding the year of application of the investment project for submission if their exports take up more than 70% of their turnover on the third year preceding the year of application of the investment project for submission, b. innovative: SMEs, whose research and development costs have exceeded the10% of their total operating expenses for at least one (1) year from the last three before submission of the qualification application to the provisions hereof, c. independent SMEs, which, after the entry into force of the law, carry on with a merging procedure, either by absorption or by creation of a new company, expressly excluding acquisition d. companies that have increased their employment: SMEs that increased their employment (on the basis of Annual Work Units) at least by 10% over the last three years prior to the request for the investment plan to fall under the provisions of the present law, e. cooperatives, Social Cooperative Enterprises of law 4019/2011 (A'216), Agricultural Cooperatives, Producer Groups, Rural Partnerships of law 4384/2016 ( A'78) f. companies whose investment projects are implemented in one of the sectors of Technology, Information, Communication (ICT) and agri-foods, as their principal activity sector g. companies that achieve high added value, as determined by ELSTAT at the time of proclamation of the decision notice in relation to the average of their industry, h. companies whose subjected investment plan is implemented in Industrial and Business Zones, Business

13 Parks excluding Business Parks of Intermediate Organizational Grade, Technological Parks and Innovative Activities Pocket Hosts and which are not related to modernization or expansion of existing structures of the reinforced business, i. enterprises whose investment project is implemented in specific areas, as indicated in the relevant Appendix. A region is characterized as specific if it satisfies at least one of the following criteria: aa. mountainous region, according to the categorization of ELSTAT., outside the Municipal Sections that are part of the urban complex of Athens, bb. border area, ie areas within thirty (30) kilometers from the border, and the islands of the North Aegean Region, the island of Samothrace, Evros Prefecture and the Dodecanese Prefecture, cc. island region, ie the islands with a population of less than three thousand one hundred (3,100) residents and dd. areas which present population reduction, as this results along the years of the two most recent censuses (2001 and 2011), and it only concerns a decrease of the resident population of more than 30% j. enterprises whose investment project is implemented in areas with particularly high refugee and migration flows and in particular: Agathonisi, Kalymnos, Kastelorizo, Kos, Leros, Lesvos, Samos, Symi, Chios. By joint decision of the Ministers of Economy, Development and Tourism and of Internal Affairs, the above areas can be redefined depending on migration flows. Moreover: The maximum reinforcement intensities for regional investments (maximum approved regional aids) are defined by C (2014) 2642 / Regional Aid Map. The respective current Regional Aid Maps are posted on the relevant development law website. The maximum reinforcement intensities for large enterprises, which are listed in the Regional Aid Map, are increased by 10% for medium enterprises and by 20% for small and micro enterprises without prejudice to paragraph 2 of Article 67. The reported to SMEs increased reinforcement intensities of the Regional Aid Map do not apply to investment projects with eligible expenses in excess of fifty million (50,000,000) euros. The above mentioned limitation also applies, to the outside of regional reinforcements eligible expenditures of Article 9. For investment projects with eligible expenditures in excess of fifty million (50,000,000) euros (large investment projects), the maximum reinforcement amount is determined as follows: aa. for the portion of the expenditure up to fifty million (50,000,000) Euros, one hundred percent (100%) of the maximum allowable regional aid in the region concerned is provided, with the exception of the increased aid intensity for SMEs (maximum regional limit), bb. for the portion of the expenditure in excess of fifty million (50,000,000) euros and up to one hundred million (100,000,000) euros, fifty percent (50%) of the maximum regional limit is provided, cc. for the portion of expenditure in excess of one hundred million (100,000,000) euros no reinforcement rate is provided. The total reinforcement amount per submitted investment plan may not exceed the amount of five million (5,000,000) euros, without prejudice to Article 67. The supplied for each body reinforcements, including aid in partner or associates may not cumulatively exceed ten million (10,000,000) euros for individual enterprises and twenty million (20,000,000) euros for all cooperating or associated companies, without prejudice to the limitations of Article 4 GER.

14 BUSINESS CATEGORY DEFINITION* INVESTMENT PLAN MINIMUM AMOUNT LARGE It employs more than 250 people. Its annual turnover exceeds 50,000, euros and its annual balance sheet exceeds 43,000, Euros ,00 MEDIUM SMALL MICRO It employs fewer than 250 employees. Its annual turnover is less than EUR 50,000,000.00, and its annual balance sheet is less than EUR 43,000, It fulfills the criterion of independence. * It employs fewer than 50 employees. Its annual turnover as well as its annual balance sheet is less than EUR 10,000, It fulfills the criterion of independence. It employs from 0 to 10 employees. Its annual turnover as well as its annual balance sheet is less than EUR 2,000, It fulfills the criterion of independence , , ,00 For Social Cooperative Enterprises of Law 4019 / 2011 (A'216) as well as for Agricultural Cooperatives, Producer Groups and Rural Partnerships of the Law 4384 / 2016 (A 78) at the amount of fifty thousand euros (50.000). * Another company is not participating in it, which could be a SME or not (according to its definition) at a rate that exceeds 25% of share capital. In any other case, an examination of the associated - cooperating business data is required. 8. COMPLETION OF INVESTMENT PROJECTS AND LAW DEADLINES The project is completed with the implementation of the physical and financial object and with the beginning of functional operations of the investment, as long as it serves the primary productive operation objectives and the integrated nature of the investment, within the deadline determined in the qualification decision, which may not exceed 3 years from the date of publication of the said decision. The completion and beginning of operations, is certified with the issue of a relevant decision by the competent Institutions as they are defined in Article 14 of the Law. The date in the qualification decision may be extended once, up to two years maximum, provided that the following conditions are cumulatively met: aa. Electronic submission of the relevant request should take place before the end of the integration period, as it is initially defined in the qualification decision, bb. implementation of 50% of the physical and financial object.

15 The forecasted in the decision of submission deadline of completion of the investment plan, may also be extended for reasons of force majeure for a period equal to that of the suspension or delay, provided that the possibility of completing the project within the new deadline will be documented. For the validation of the beginning of operational function of the investment, documentation of the unit's operations is required, especially concerning the sale of products or services and the issuance of all legalization permits. 9. REINFORCEMENT PAYMENT The payment of the reinforcement may be either one-off with the issue of the completion decision and beginning of operation of the investment project or gradually and as long as the conditions mentioned in the following points are met: Capital Subsidy a. Amounting to fifty percent (50%) of the approved grant, may - further to a relevant inquiry- may be paid to the beneficiary after the certification by the responsible monitoring organization of the implementation of the 50% of the total cost of the project. b. The remaining amount of the grant or its whole in case of non-application of the regulation of case a', shall be paid further to the issue of the completion decision and commissioning of the investment. c. The amounts of the subsidy are not deducted from the value of the investment costs in order to determine the taxable profits. d. Assignment: The subsidy is paid directly through electronic payment to a bank account of the investment project entity and may not be assigned to third parties. Exceptionally, it is possible to assign the claim to the amount of the grant to banking institutions in order for them to provide short-term loans of an equal amount of cash to that of the grant, used for the investment project. In these cases the payment of the grant is made directly to the Bank with which the asset transfer contract has been signed, as long as each time an amount of cash of this short term loan has been withdrawn, which is at least equivalent to the paid grant proportion. Leasing Subsidy a. The commencement of payment of the leasing subsidy may take place after the certification by the relevant monitor installation at the unit of all the leased equipment, according to the leasing contract. b. The subsidy is paid every six months and after each payment of the rent installments on behalf of the investor. The amount payable is calculated on the equipment acquisition value, which is included in the paid installments in accordance with the approved aid rates and with the limitation of not exceeding the payment of sixty percent (60%) of the approved amount until the decision of completion and the beginning of productive operations of the investment project. c. The in advance payoff by the investment entity is possible, only for the last twelve (12) months of the lease contract, as approved by the relevant department. d. The amounts of the leasing subsidy are not deducted from the value of the investment costs in order to determine the taxable profits.

16 Tax Exemption a. The right to begin using the utility incentive of tax exemption is based on the certification of implementation of 50% of the cost of the project by the competent control body. The entity can utilize the whole of the entitled reinforcement of tax exemption within fifteen (15) fiscal years from the fiscal year of entitlement of the benefit of use with the following restrictions applying cumulatively: aa. the entitled aid will not exceed, annually, the twenty percent (20%) of the total amount of the approved tax exemption, except in the case of its incomplete exploitation in previous fiscal years due to lack of adequate profits. In this case, any remaining amount of reinforcement from previous fiscal years is added to the above calculated maximum annual amount of entitled reinforcement, bb. the entitled reinforcement cannot exceed the fifty percent (50%) of the total approved amount of the tax exemption, until the fiscal year of issue of the completion decision and beginning of operational function of the investment. b. The amount of authorized payment of the tax exemption for the part of the project's equipment acquired under finance leases is determined for each fiscal year as a percentage of the portion of the purchase price of the equipment, which is included in the installments paid by the end of the fiscal year. c. The yearly spent amount of the tax exemption appears in a specific reserve and a corresponding account in the books of the company, formed from income tax which was not paid because of the provided tax exemption. d. By joint decision of the Ministers of Economy, Development and Tourism and Finance the way of calculating the amount of tax exemption for each fiscal year is defined as well as any documents required for the use of the tax benefit, the content of the Tax Exemption Report (TER) of the case l of paragraph 3 of Article 21 and any related issues concerning the implementation of the provisions of this paragraph. New employment cost subsidy a. The starting point of the new employment cost subsidy can take place after the certification by the competent inspection body of the creation of associated with the investment project jobs. b. The subsidy is paid every six months and after each payment of wage costs on the part of the investor, with the limitation of not exceeding the payment of sixty percent (60%) of the approved amount until the issue of the completion decision and the beginning of productive operation of the investment. 10. STAMP DUTY For the submission of investment projects, with the exception of large investment projects of Articles of the New Investment Law a fee set to the 0,005 of the eligible amount of the investment project, is required. In any case, the above mentioned amount may not be less than three hundred (300) euros and higher than five thousand (5,000) euros. For large investments of Articles a fee set to 0,001 of the eligible amount of the investment project is required. In any case, that amount may not exceed fifty thousand (50,000) euros. The above mentioned amounts may be readjusted by joint decision of the Minister of Economy, Development and Tourism and Finance.

17 11. SUBMISSION OF INVESTMENT PROJECTS The submission Entity of each project varies depending on the type of project, the installation and, in some cases, the total investment amount. ü ü ü Investment projects of an eligible amount up to three million (3,000,000) Euros, implemented within the boundaries of each Region, submitted in Development Planning Directorates of Regions of the Country. Especially for the Region of South Aegean applications of investment projects implemented in the Regional Unit of Dodecanese are submitted to the Development Planning Directory of Dodecanese, eligible investment projects worth over three million (3,000,000) Euros, implemented in the regions of Western and Central Macedonia and Eastern Macedonia and Thrace, are submitted to the Directorial Department for Regional Development Policy of the Ministry of Interior Affairs and Administrative Reconstruction (former Macedonia and Thrace) to the General Directorate for Private Investments of the Ministry of Economy, Development and Tourism for all other investment projects.