Draft Law Implementing FDI Regulation (EU) 2019/452 in Greece – Forthcoming Implications on M&A Transactions and Greenfield Investments
Draft Law Implementing FDI Regulation (EU) 2019/452 in Greece – Forthcoming Implications on M&A Transactions and Greenfield Investments
April 2025
Anastasia Dritsa, Partner, Victoria Mertikopoulou, Partner, Konstantinos Sidiropoulos, Senior Associate, Ifigenie Argyri, Associate, and Maria Paziotopoulou, Junior Associate
Kyriakides Georgopoulos Law Firm
Introduction
On 2nd April, 2025, a public consultation was launched for the highly anticipated draft Law “Adoption of measures implementing Regulation (EU) 2019/452 establishing a framework for the screening of foreign direct investments into the Union on grounds of security or public order” (draft Law). The draft Law implements Regulation (EU) 2019/452 (“FDI Regulation”) and establishes a framework for the screening and authorization procedure of foreign direct investments in Greece. The public consultation will remain open until 17 April 2025.
Objective
The key objective of the draft Law is to establish a national screening mechanism, i.e. a legislative framework setting out the terms, conditions and procedure under which screening on grounds of security or public order takes place for Foreign Direct Investments (“FDIs”). FDIs are investments by a foreign investor (a natural or legal person who intends to make or has made a foreign direct investment pursuant to the FDI Regulation a) from a third country; or b) from an EU Member State, if it is controlled, directly or indirectly, by a natural or legal person from a third country).
Scope
The draft Law sets cumulative criteria for the screening of the FDIs on the grounds of security or public order based on (a) the activities of the target company, namely affecting security or public order sensitive sectors such as energy, transport, digital infrastructure, defence and national security, cybersecurity, artificial intelligence, port and sub-sea infrastructure and tourism infrastructure in border areas and (b) the percentage of shareholding in the target company.
The following transactions are not covered by the scope of the draft Law:
- Portfolio investments;
- Restructuring operations within a group of companies or the merger of several legal entities into a single legal entity; and
- Investments in start-ups that employ fewer than ten (10) employees and whose annual turnover is lower than two million (2,000,000) euros.
The draft Law designates the Inter-ministerial Committee for the Screening of FDIs on grounds of security or public order and the Minister of Foreign Affairs as competent bodies to review and authorize or decide on the approval, imposition of specific conditions or mitigation measures, prohibition or reversal of an FDI.
Key takeaways for companies
Parties to contemplated M&A transactions or greenfield investments in Greece should, in particular, be aware of the following, in view of the draft Law impending adoption:
- FDIs will be subject to screening before the completion of the investment;
- FDI review period may affect transaction timelines;
- The competent bodies for the FDI’s screening shall have extensive powers to decide on the approval, imposition of specific commitments or mitigation measures, prohibition or reversal of an FDI;
- Failure to submit an application for an FDI screening, or the submission of an application after its completion, shall constitute grounds for the imposition of mitigation or reversal measures and entail administrative fines up to EUR 50,000 on the foreign direct investor;
- Severe administrative fines shall be threatened in case of inter alia implementation of the FDI despite the prohibition of such investment by decision of the Minister of Foreign Affairs.
April 2025
Anastasia Dritsa, Partner, Victoria Mertikopoulou, Partner, Konstantinos Sidiropoulos, Senior Associate, Ifigenie Argyri, Associate, and Maria Paziotopoulou, Junior Associate
Kyriakides Georgopoulos Law Firm
Introduction
On 2nd April, 2025, a public consultation was launched for the highly anticipated draft Law “Adoption of measures implementing Regulation (EU) 2019/452 establishing a framework for the screening of foreign direct investments into the Union on grounds of security or public order” (draft Law). The draft Law implements Regulation (EU) 2019/452 (“FDI Regulation”) and establishes a framework for the screening and authorization procedure of foreign direct investments in Greece. The public consultation will remain open until 17 April 2025.
Objective
The key objective of the draft Law is to establish a national screening mechanism, i.e. a legislative framework setting out the terms, conditions and procedure under which screening on grounds of security or public order takes place for Foreign Direct Investments (“FDIs”). FDIs are investments by a foreign investor (a natural or legal person who intends to make or has made a foreign direct investment pursuant to the FDI Regulation a) from a third country; or b) from an EU Member State, if it is controlled, directly or indirectly, by a natural or legal person from a third country).
Scope
The draft Law sets cumulative criteria for the screening of the FDIs on the grounds of security or public order based on (a) the activities of the target company, namely affecting security or public order sensitive sectors such as energy, transport, digital infrastructure, defence and national security, cybersecurity, artificial intelligence, port and sub-sea infrastructure and tourism infrastructure in border areas and (b) the percentage of shareholding in the target company.
The following transactions are not covered by the scope of the draft Law:
- Portfolio investments;
- Restructuring operations within a group of companies or the merger of several legal entities into a single legal entity; and
- Investments in start-ups that employ fewer than ten (10) employees and whose annual turnover is lower than two million (2,000,000) euros.
The draft Law designates the Inter-ministerial Committee for the Screening of FDIs on grounds of security or public order and the Minister of Foreign Affairs as competent bodies to review and authorize or decide on the approval, imposition of specific conditions or mitigation measures, prohibition or reversal of an FDI.
Key takeaways for companies
Parties to contemplated M&A transactions or greenfield investments in Greece should, in particular, be aware of the following, in view of the draft Law impending adoption:
- FDIs will be subject to screening before the completion of the investment;
- FDI review period may affect transaction timelines;
- The competent bodies for the FDI’s screening shall have extensive powers to decide on the approval, imposition of specific commitments or mitigation measures, prohibition or reversal of an FDI;
- Failure to submit an application for an FDI screening, or the submission of an application after its completion, shall constitute grounds for the imposition of mitigation or reversal measures and entail administrative fines up to EUR 50,000 on the foreign direct investor;
- Severe administrative fines shall be threatened in case of inter alia implementation of the FDI despite the prohibition of such investment by decision of the Minister of Foreign Affairs.
