This marks a significant shift in Greece's foreign investment policy. Until recently, Greece was one of the few EU member states without a specific FDI screening mechanism. With this new framework, Greece joins the overwhelming majority of EU member states (all but Cyprus and Croatia) that screen non-EU investments in sensitive sectors, a move consistent with the EU’s broader effort to safeguard strategic autonomy amid heightened geopolitical risk.
Scope of the regime—investments by EU investors may be caught
The new Greek law requires mandatory pre-closing notification and approval of acquisitions of, or increases in, shareholdings or voting rights in Greek undertakings operating in “sensitive” or “highly sensitive” sectors, provided sector-specific thresholds are met. The regime targets investments by non-EU investors, whether natural or legal persons.
Crucially, however, in highly sensitive sectors the law also captures investments by EU-incorporated acquirers that are not themselves controlled by a non-EU investor, if a non-EU person holds—directly or indirectly—at least 10% of the acquirer’s share capital or voting rights or otherwise exerts comparable influence (including through the provision of “significant funds”). This indirect control test materially broadens the regime’s jurisdictional reach and reflects a growing, EU-wide concern about foreign influence exercised through intermediary EU vehicles.
Tiered approach to investment screening
The new Greek regime adopts a two-tier approach, with thresholds determined by the sensitivity of the target sector.
- Investments in “sensitive” sectors, such as energy, transport, digital infrastructure, and healthcare, are subject to screening (solely) when a non-EU investor acquires at least 25% of the shares, voting rights, or equivalent participation.
- For investments in “highly sensitive” sectors—including defense, dual-use items, cybersecurity, artificial intelligence, and certain tourism infrastructure in border areas—the threshold drops to 10% of the shares, voting rights, or equivalent participation acquired by non-EU investors (or by EU investors when a non-EU person holds at least 10% of its capital or voting rights). Subsequent add-on acquisitions trigger a new screening if 20%, 25%, 30%, 40%, 50%, and/or 75% ownership is reached or exceeded.
Greek-incorporated businesses and entities "otherwise subject to Greek law" are covered by the law, suggesting that the regime may have a broad jurisdictional scope. However, there remains significant ambiguity regarding what precisely constitutes an entity that is "subject to Greek law." The drafting documents provide little clarification on this point, and it is not yet clear how this provision will be interpreted in practice. Further clarification is expected through administrative guidance or secondary legislation.
Importantly, the Greek regime is both mandatory and suspensory—a covered investment must be notified and cleared before it can be implemented.
The Greek FDI regime does not provide for formal precautionary filings or a mechanism to seek a binding determination on whether a transaction falls within its scope. However, it does allow for a pre-notification process aimed at verifying the completeness of a filing, rather than its notifiability. Moreover, while the authorities may initiate an ex officio review of transactions that fall within the scope of the regime but were not notified, they are not empowered to review transactions ex officio that fall outside the regime’s defined scope—even if such transactions may raise national security concerns.
Portfolio investment exemption: a limited carve-out
An interesting element of the new regime is the limited exemption for portfolio investments (as well as internal restructurings). Under Article 4(2)(a) of the law, only natural persons who acquire shares solely as a financial investment—and without any intention or ability to influence the management or control of the target—are exempt from screening. Institutional investors and legal entities are expressly excluded from the exemption, regardless of whether their investment is passive in nature.
During the legislative process, the exemption was tightened to require not only a lack of intent, but also an absence of any actual ability to influence the management or control of the target. This adjustment aims to prevent circumvention by investors who might not declare an intention to influence but may still acquire rights or positions enabling them to do so. At the same time, the exemption was limited to natural persons throughout the legislative process. There is no indication that an extension to institutional investors was ever contemplated, suggesting a deliberate choice to exclude legal entities from the scope of the carve-out.
Toward EU harmonization?
Greece’s narrow treatment of portfolio investments underscores the patchwork nature of member state screening regimes. This diversity poses an additional challenge for investors, who must navigate the varying rules and regulations on foreign investment across the EU. While the new Greek regime reflects several elements of the draft revised EU Screening Regulation—such as the potential inclusion of EU investors, the possible coverage of greenfield investments, and the exemption of purely financial portfolio investments—it ultimately stops short.
The European Commission’s proposed revision of the FDI Screening Regulation clarifies in Recital 16 that the framework should not cover the “acquisition of company securities intended purely for financial investment, without any intention to influence the management and control of the undertaking,” without distinguishing between natural and legal persons. Greece, however, maintains a narrow interpretation of the portfolio investment exemption, potentially capturing transactions that would be excluded under the proposed EU standard. Should this proposal be adopted in its current form, Greece would likely need to revisit Article 4(2)(a) to maintain conformity with EU law.
Review process and enforcement
Screening is entrusted to a newly constituted Interministerial Committee for the Screening of Foreign Direct Investments (FDISIC), supported by the Ministry of Foreign Affairs. The FDISIC conducts an initial review within 30 calendar days (Phase 1); where warranted, it may launch an in-depth Phase 2 investigation lasting up to a further 140 days.
Failure to notify a notifiable transaction may result in administrative fines of up to EUR100,000. The law also allows for the unwinding of a completed transaction in certain circumstances.
Outlook
Greece's new FDI screening mechanism, which entered into force on May 23, 2025, following its publication in the Government Gazette, represents a significant shift in the country's approach to controlling foreign investments. This change aligns Greek national law with EU requirements and demonstrates a clear political will to protect critical assets. At the same time, the absence of a portfolio investment exemption for legal entities, coupled with the expansive “subject to Greek law” nexus, introduces complexity and potential over-reach. Until interpretive guidance is issued—and pending any EU-level harmonization—non-EU investors, including passive funds, should assume that acquisitions in Greek strategic sectors will be scrutinized where the statutory thresholds are met.
