Greece Introduces FDI Screening Law: Safeguarding Sovereignty in a Global Investment Era

On May 23, 2025, Greece enacted Law 5202/2025, a landmark statute that creates—for the first time—a structured mechanism for reviewing foreign direct investments (FDIs) that may affect national security or public order. This reform brings Greece in line with the EU's broader push under Regulation (EU) 2019/452 to bolster resilience across critical sectors without turning inward or undermining investor confidence.

In an age where capital can move faster than regulation and infrastructure can be leveraged as much for geopolitical advantage as for economic gain, the new law aims to ensure that openness to international investment does not come at the expense of strategic autonomy.

What Does the Law Actually Do?

At its core, the law introduces a government-led review process for foreign investments targeting Greek companies operating in sectors deemed vital. This includes areas like energy, communications, health services, transport, defense-related technologies, cybersecurity, and even coastal tourism infrastructure near national borders. Not every investment is caught in the net. The law is designed to detect cases where there’s either direct involvement from a non-EU investor, or indirect influence from entities controlled by third countries—including foreign governments or state-owned enterprises. Importantly, even EU-based investors may fall within scope if there’s substantial third-country influence behind them. Participation thresholds serve as practical triggers for review: 25% ownership in “strategic” sectors and just 10% in more sensitive categories. These are not arbitrary cutoffs—they reflect a growing awareness that control is often exercised through influence well below majority shareholding.

What's Out of Scope?

To avoid unnecessary friction in cross-border commerce, the law sensibly excludes certain transactions. Passive financial investments that do not grant influence, internal group restructurings that don’t affect control, and pre-law contractual arrangements are explicitly carved out. This gives businesses the clarity they need to plan without second-guessing innocuous deals.

Who Is in Charge?

The oversight of this process has been entrusted to a newly formed Interministerial Committee, with support from a dedicated unit within the Ministry of Foreign Affairs. Investors who plan to acquire stakes in qualifying sectors must submit a detailed application before proceeding with the transaction. The Committee then has 30 days to decide whether to waive the review or dive deeper. In cases where further scrutiny is warranted, the investment may ultimately be approved as-is, allowed with conditions, or blocked altogether. The law also authorizes retroactive investigations in situations where parties failed to notify authorities.

What Happens If You Don’t Comply?

Failure to notify can result in steep consequences. The Ministry has the power to nullify unapproved transactions, effectively erasing them from a legal standpoint. Administrative fines range from €5,000 to €100,000, but where there is serious noncompliance—such as attempts to circumvent disclosure—the penalty can reach double the value of the investment. This enforcement model makes clear that the law is not symbolic: it has teeth.

Strategic Intent Without Overreach

Law 5202/2025 is not about protectionism. It’s about realism. Greece, like its EU partners, recognizes that unchecked capital flows—particularly when they originate from opaque or politically-driven sources—can quietly reshape a country’s critical infrastructure. This law is a proactive safeguard, not a reactive barrier.

Yet, it avoids the trap of overregulation. With clearly defined criteria, procedural safeguards, and sector-specific thresholds, it respects investor due process while giving the state the tools it needs to act when national interests are at stake.

Looking Ahead

This law is a significant step forward. But its long-term impact will depend on how it's applied in practice. For it to succeed, authorities will need to ensure consistency, transparency, and fairness—both in how they review investments and how they communicate expectations to the market.

Investors will also need to recalibrate. Diligence must now include not just financial and legal risk, but also geopolitical alignment and regulatory posture. For those prepared to engage responsibly, Greece remains very much open for business.