FDI Screening Law 5202/2025
Introduction
The Law 5202/2025 (GG’ A’ 84/23.5.2025) (the “FDI Screening Law”), published on 23 May 2025, aligns Greece’s regulatory framework with Regulation (EU) 2019/452 (the “EU FDI Regulation”) on the screening of foreign direct investments (“FDIs”) for reasons of national security and public order.
The purpose of the FDI Screening Law is to establish a framework that enables Greek authorities to assess and, consequently, approve, restrict or prohibit investments by non-EU investors, or EU-based entities linked to non-EU investors or foreign states, in sectors such as port infrastructure, energy, defense, transportation or digital infrastructure, thereby safeguarding national security and public order.
Scope of application
The screening mechanism is triggered for FDIs in “sensitive” and “highly sensitive” sectors that surpass specific participation thresholds and are carried out by:
- – non-EU individuals or entities,
or
- EU-based entities that are ultimately under the direct or indirect control of non-EU individuals, corporations, or governments, including state-entities or armed forces.
For highly sensitive sectors, such as defense and national security (including cybersecurity and artificial intelligence), port infrastructure, tourism infrastructure in borderland areas and critical underwater infrastructure, FDIs are screened if the participation of the foreign investor in the target enterprise exceeds (or equals) 10%.
In the sensitive sectors, such as energy, transportation, health, information and communication technology or digital infrastructure, FDIs are screened if the participation of the foreign investor in the target enterprise exceeds (or equals) 25%.
Any subsequent increase that exceeds certain thresholds also triggers screening.
For the purposes of calculating the ownership threshold, shares or interests held by (i) entities within the investor’s group, (ii) family members of the investor, and (iii) entities controlled by such family members are taken into account, as well as contractual arrangements concerning voting rights, public procurement or other agreements.
Exempted FDIs
The FDI Screening Law excludes from its scope of application (a) portfolio investments, (b) internal group restructurings provided they do not increase the level of control or influence held by foreign investors and do not confer additional rights altering the effective control of the target enterprise, and (c) pending tender procedures where a binding offer has been submitted, as well as asset exploitation agreements that have not been completed by the date of entry into force of the FDI Screening Law.
Screening Criteria
In determining whether an FDI is likely to affect security or public order, the Interministerial Committee for the Screening of FDIs (the “FDI Screening Committee”) will consider, inter alia, the following criteria:
- whether the foreign investor is directly or indirectly controlled by the government (including state entities or armed forces) of a third country, including via ownership structure or significant funding;
- whether the foreign investor has previously engaged in activities affecting security or public order in a Member State;
- whether there is a serious risk that the foreign investor engages in illegal or criminal activities;
- whether the transaction may affect projects or programs of EU interest listed in the Annex of Regulation (EU) 2019/452 for reasons of security or puic order, and
- whether the investor is subject to EU restrictive measures (e.g. sanctions).
Screening Process
Before the completion of a notifiable FDI, foreign investors must submit an application to the B1 Directorate of the Ministry of Foreign Affairs (the “Directorate”).
Within 5 days (unless the application is incomplete), the Directorate will assess whether the notified investment triggers review; if it does, the case file is forwarded to the FDI Screening Committee.
The FDI Screening Committee may either exempt the investment from the screening process or proceed with an in-depth assessment to evaluate potential risks to national security or public order within 30 days from the receipt of the case file. The FDI Screening Committee may, by a reasoned decision, extend this deadline by 30 days.
Following this review, the FDI Screening Committee will forward its opinion to the Minister of Foreign Affairs, who must then render a final decision within 30 days. This ecision can approve the investment (with or without conditions) or prohibit it entirely.
If no decision is issued within 60 days of the opinion of the FDI Screening Committee, the investment is deemed automatically approved.
Ex officio screening process
The FDI Screening Committee may initiate the screening process on its own motion if an investor fails to comply with the notification requirements.
Administrative Penalties for non-compliance
The prohibition, reversal or imposition of specific conditions or mitigating measures by the Ministry of Foreign Affairs for the implementation of the FDI, entails the automatic nullity of the transaction.
Failure to submit a required application, belated filing, incomplete solicited documentation or false statements may lead to restrictive conditions, reversal of the investment transaction or prohibition.
In addition, administrative fines may apply, ranging from €5,000 to €100,000. For serious infringements (e.g. completing a prohibited investment, misrepresentations to the competent authorities, breach of conditions), the fine may add up to twice the value of the investment.
Investors are entitled to a preliminary administrative hearing before any fine is imposed, offering an opportunity to respond before such penalties are finalized.
Implications for Investors
Investors should conduct thorough legal due diligence at an early stage to confirm whether an FDI falls within the scope of the screening mechanism, as well as to ensure accurate and timely disclosure to the authorities. The risk of post-closing reviews and significant penalties underscores the importance of close, early engagement with legal counsel throughout the investment process.