Funding – Subsidies Law

May the Shareholder Structure of a Subsidized Company in Greece Change?

Note: This article refers to the currently applicable Greek investment law (Development Law 4887/2022). Older grant applications may in some cases still be subject to the historical provisions of Laws 3299/2004 or 3908/2011.

For investors and entrepreneurs receiving state grants in Greece, an important strategic question often arises: after applying for or being awarded a subsidy, may I still bring in new partners, sell shares, or change the legal form of the company?

The short answer is: Yes, this is possible – but strict rules apply.

While very early versions of the law (before 2006) strictly prohibited such changes, the current Development Law 4887/2022 provides the necessary entrepreneurial flexibility. Nevertheless, the Greek State scrutinizes changes of ownership closely. The following must be observed today:

1. Duty to Notify the Authorities
   Any material change in the shareholder structure of the subsidized company must be reported to the competent authority (the Ministry of Development or the competent regional directorate) promptly and without exception. Undisclosed transfers of shares can lead to the complete revocation of the subsidy and to repayment claims.

2. Caution Regarding Company Size (SME Status)
   This is the most important point in practice: the amount of state funding in Greece depends significantly on the size of the company. Small and medium-sized enterprises (SMEs) often receive substantial percentage increases (bonuses) on the base funding rate.

• The risk: if the shareholder structure changes – for example, because a large corporation acquires a stake in your small company – your company may lose its SME status.
• The consequence: if it emerges during an inspection that, as a result of the change in shareholders, the company is legally classified as a “large enterprise,” the funding amount will be retroactively reduced to the (lower) rate applicable to large enterprises.

3. Proof of Financial Capacity
   The State grants funding on the condition that the investor is able to raise its own share of the costs (the equity contribution). If the original shareholders leave the company, the authorities examine whether the new shareholders are financially capable of completing the investment project in accordance with the contract. Creditworthiness and proof of own funds must therefore also be beyond doubt for the new shareholder structure.

4. Approval versus Mere Notification
   Depending on the stage your investment project has reached (still under review, already being implemented, or already in ongoing operation after completion), mere notification of the change is often not sufficient. In particular during the implementation phase, material changes to the ownership structure generally require the formal approval of the authorities, in order to ensure that the original funding criteria continue to be met.

Practical Conclusion

Current Greek subsidy law does not block entrepreneurial decisions such as mergers, share sales, or the admission of new investors. However, such steps should never be carried out without prior legal review. Before shares are transferred, it should be calculated precisely whether this will affect the SME status and thus the amount of the subsidies granted.