During a courtesy meeting with a delegation from Partit Laburista, Malta Chamber...
Athens, the capital of Greece, holds a major place in the Greece economy. Greece has a mixed economy, which has shown considerable improvement since the government has tightened the policy after being accepted into the European Union. After joining the EU, Athens has received many subsidies from the European commission to strengthen its public works projects and help the struggling agricultural sector. Athens has been considerably successful in improving its economy by utilizing the subsidies from European commission. The EU financial assistance is used by Athens to strengthen the industrial sector and improve its infrastructure. Athens also serves as the business hub for countries that are involved in trade with Southeast Europe and the Middle East.
Around 80% of the industries set up in Germany have their headquarters based in Athens. Hence, if you calculate the Athens contribution to the overall GDP of Greece, it comes up to around 80%, which is remarkable for a single city. This clearly explains the economical importance of Athens in Greece.
The population of Athens stands at more than four million. The Athens economy has shown a compound annual growth of 3.6 – 5% each year. Athens, being a center point of the Greece economy, the per capita income of residents is high in comparison to other regions in Greece. The per capita income of the Athens citizen stands at $29,361.
The economic freedom score of Athens is high, standing at 62.7, thereby making the Greek economy the 73rd most free economy in the 2010 index. The economic score for 2010 has an improvement of 1.9 points in comparison to 2009. The Athens economy stands at 34th out of 43 capital cities of members of EU. But in comparison to the world average, the economy is quite progressive.
It is relatively easy to start and operate a business in Athens. The regulatory environment of Greece enables the investor to start a business within 35 days, which is equivalent to half of the world average. Procuring a license for business takes fewer days in comparison to the world average.
Athens is benefitting from the investments during the hosting of the Olympic Games in 2004. OECD has high hopes for Athens and it has stated in its report that Athens is likely to receive more benefits from globalization and expansion of the EU on the eastern side.
Athens officially encourages foreign investment in different sectors. However, the Greece Foreign investment policy restricts non EU members from freely investing in certain sectors, such as mining, air transport, maritime, broadcasting and banking. Investors interested in investing in the above mentioned sectors first need to obtain licenses and approvals from the Greek government. Some of the hot sectors for investment in Athens are:
ICT: Since Athens is the international gateway for Greece. Many multinational companies have their offices set up in Athens. The private sector and public sector in Athens is growing at a fast pace and there is great need for application of advanced technologies throughout Athens. The primary focus of the ICT sector in the Athens economy is on Telecommunications. Athens has recently shown tremendous growth potential in Internet usage and hence companies and the government are improving its infrastructure.
Other sectors which are attractive for investment for foreign investors are high tech, agriculture, manufacturing and industries related to natural resources.
The Greek government has introduced an “Acceleration and transparency of implementation of strategic investments” law, which provides international and domestic investors with a transparent investment framework. Besides, the Greek government has also established a law called “Public-Private partnerships”, which encourages and facilitates the development of sectors in rural areas with private partnership.
The investment law 3299/2004 provides many leasing subsidies, tax reliefs, cash grants and low interest loans to enterprises that generate employment. Legislative Decree 2687/1953 provides specific incentives and protection to foreign investment for project that is of national importance and contributes to the economic progress of country/ besides the law also renders a stable environment for foreign projects. This factor is quite attractive for foreign investors who have long term investment projects such as infrastructure projects.
The Greek law also gives protection for foreign exchange, materials and equipment, technical processes, patents, large vessels and trademarks registered under the Greece flag. Investors can also take long term loans in foreign currency from foreign or Greek banks. The loans that are taken for mining enterprises or industrial or productive enterprises are exempted from other charges and stamp duties. Foreign establishments that are not of permanent nature get an exemption from income tax on any interest earned from investments.
Government has also reduced the corporate tax from 35% to 25% for limited liability companies and 25% to 20% for partnerships firms. Governments have declared a list of primary industries that qualify to receive incentives in various forms. Foreign investors investing in industries based on farms, fisheries, tourism, theme parks, health tourism center, software development and applied industrial research laboratories gain from such schemes.
The Hellenic Center of Investment is the responsible for looking for, promoting and supporting FDI in Athens and other regions in Greece. The ELKE is a one stop shop for foreign investors looking for information to set up an enterprise in Athens or any other region in Greece. The Agency provides comprehensive information about the comprehensive investment climate, the legislation for investment, special subsidies available for different industries in sectors in Athens. The Agency also provides about the extensive investment opportunities along with exiting norms both informal and formal. Besides providing the information the Center also provides all help needed to obtain the required licenses along with assistance at all stages of project.
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