Introduction
In alignment with Regulation (EU) 2019/452 on the establishment of a framework for the screening of foreign direct investments (FDI) into the Union on grounds of security or public order, the Hellenic Parliament enacted Law 5202/2025 on 22 May 2025. The Law, which entered into force upon its publication in the Government Gazette Issue (FEK) (GG A’ 84/23.05.2025), introduces for the first time in Greece a comprehensive national screening mechanism for FDIs, applicable as of 26 May 2025. Its primary objective is to safeguard national security and public order, while ensuring coherence with the EU legal framework.
Scope of Application: FDI Transactions Subject to Screening
The new regime captures a wide array of transactions involving foreign investors, notably:
- Greenfield investments, including the establishment of new operations or facilities by a foreign investor in Greece, such as establishing a new production site or company
- Mergers and acquisitions (M&As), entailing the acquisition of ownership or control over Greek entities or assets engaged in economic activity.
A “Foreign Investor” includes any individual or undertaking established in a third (non-EU) country, as well as any EU-based person or entity ultimately controlled, directly or indirectly, by non-EU nationals, undertakings or governments.
The screening obligation is determined based on two cumulative criteria:
- The sector in which the Greek Τarget is or will be active, and
- The level of participation acquired or increased by the Foreign Investor.
Critical Sectors and Notification Thresholds
The Law distinguishes between “sensitive” and “highly sensitive” sectors, each with its own notification thresholds:
- Sensitive sectors include energy, transportation, healthcare, information and communication technologies (ICT), and digital infrastructure. Notification is required (a) they concern at least 25% of participation interests in the Greek Target, or (b) pre-existing participation rights are increased to 30%, 40%, 50%, or 75%.
- Highly sensitive sectors cover national defense and security (including military technology, dual-use goods, cybersecurity, and AI), as well as port infrastructure, critical underwater infrastructure, and tourism infrastructure in borderland areas. Foreign investments in these particularly sensitive sectors are notifiable when (a) they concern at least 10% of participation rights in the Greek Target or (b) pre-existing participation rights are increased to 20%, 25%, 30%, 40%, 50%, 60%, 70%, and 75%.
Exemptions from Screening
The regime explicitly excludes certain transactions deemed unlikely to pose risks to national security or public order, such as:
- Portfolio investments that do not confer control or influence
- Intra-group restructurings not resulting in additional rights
- Pending public procurement procedures and incomplete asset exploitation contracts at the time of entry into force.
Screening Process
The screening procedure comprises two main phases, coordinated by the Interministerial Committee for the Control of Foreign Direct Investments (D.E.E.A.X.E.) and supported by the B1 Directorate of the Ministry of Foreign Affairs (Secretariat). The Minister of Foreign Affairs retains ultimate decision-making authority.
- Pre-notification (optional): Investors may engage with the B1 Directorate to verify the completeness of their filing before formal submission.
- Phase 1 (Initial Review): Begins upon formal submission of the complete notification. D.E.E.A.X.E. has 30 days to either approve the transaction or initiate a more detailed review (Phase 2).
- Phase 2 (In-depth Investigation): D.E.E.A.X.E. may request additional information from the investor or other competent authorities and conduct consultations with the European Commission and other Member States. Within 30 days, extendable once, D.E.E.A.X.E. submits a reasoned opinion to the Minister.
- Ministerial Decision: The Minister of Foreign Affairs has 30 days from receipt of the opinion to make a final decision. If no decision is made within 60 days, the investment is deemed approved by default.
In urgent or exceptional cases, the Law allows for expedited procedures.
Monitoring and Ex Officio Review
Following clearance, the B1 Directorate monitors compliance with any imposed mitigation or reversal measures and may request documentation, including from public authorities (excluding privileged information). D.E.E.A.X.E. may also initiate an ex officio review in the event of failure to notify a reportable investment.
Sanctions
The Law provides a robust enforcement framework:
- Procedural violations (failure to notify, late notification, incomplete or false submissions) may result in administrative fines from 5,000 euros to 100,000 euros, in addition to unwinding or conditionality measures.
- Substantive violations, such as implementation of a prohibited transaction or obtaining clearance through falsehoods, may incur fines of up to 200% of the investment’s value.
Future Developments and EU Reform Alignment
The Greek regime already incorporates several elements proposed in the forthcoming EU reform of the FDI Regulation (as amended by the European Parliament in May 2025), including:
- Coverage of indirect investments via EU-controlled entities
- Screening of greenfield investments
- Procedural safeguards such as designated authorities and annual reporting.
However, it still lacks clear rules on:
- The right to be heard and access to judicial remedies
- Definitions of “control” and “restructuring”
- Transparency obligations and treatment of capital increases
- Asset deals and transitional measures for pending investments.
Further legislative refinement is anticipated, especially in light of the upcoming EU amendments introducing mandatory screenings, expanded sectoral coverage, and enhanced cooperation mechanisms.
Conclusion
Law 5202/2025 represents a milestone in Greece’s legislative alignment with EU efforts to ensure coordinated FDI screening across Member States. While it introduces a necessary regulatory layer for transactions involving foreign investors, it also brings additional complexity to cross-border M&As. Given the evolving regulatory landscape, investors are strongly encouraged to remain vigilant, seek timely legal advice, and ensure that their compliance mechanisms are robust and up to date.