GREECE: An Introduction to Private Wealth Law

Introduction

Greece has been a member of the European Union since 1981 and adopted the euro in 2001. Greece today combines its rich history and culture, with modern living and a perfect Mediterranean climate for most of the year while remaining affordable compared to other EU countries.

The country has emerged from the economic crisis of the previous decade and has undergone continuous reforms over the last five years, whose current focuses are the education and health systems. At the same time, the country’s legislative bodies have consistently introduced measures to improve the business environment and restore consumer and foreign investor confidence. Such reforms are facilitated by reviving tourism and exports, which provide for a sustainable buffer against current global economic challenges.

Economic activity continues to expand at a satisfactory pace in 2024 outperforming the euro area average. In the housing market, residential prices continued to increase at an accelerating pace in 2022 and in 2023. Labor market developments remained positive, with employment rising continuously.

Tax and Visa Programmes

Greece has introduced a successful Golden Visa programme including the issuance of a Digital Nomad Visa offering a residence permit for people working from Greece. A relevant achievement is that the Greek passport is recognised as one of the world’s most powerful passports holding the fifth position worldwide for 2022 and 2023.

Public revenues are weighted to personal income taxes from salaries and rentals and consumption taxes. On the other hand, the shift to electronic transactions has increased tax compliance and tax revenues.

Despite the uncertainty and pressure placed on it by rising energy prices resulting from the current geopolitical crisis, the Greek tax system has proven resilient and consistent. Social contribution rates are being gradually cut and a significant number of targeted reliefs across different taxes have been introduced to support specific policy goals.

Greek companies are subject to a 22% flat corporate tax rate while the dividend rate remains at 5%. Furthermore, the introduction of the Greek holding company into Greek legislation under the EU Parent-Subsidiary Directive facilitates the smooth functioning of taxation at the level of EU-wide corporate groups.

Taxes on capital and profits have been identified as among the lowest in the OECD countries. For those who invest in capital markets, capital gains are tax free, whereas the marginal tax rate is 15%.

Inheritance and gift tax rates among family members is 10%, one of the lowest in the EU, while tax guidelines on trusts and foundations and a special tax provision on testamentary trusts facilitate the design of sophisticated succession planning.

Alternative tax resident regimes

In addition, Greece has introduced three alternative tax resident regimes for investors, pensioners and executives (salaried people) providing significant benefits for the applicants. The applicants should have been non-Greek residents for a period between five to eight years before the application.

For the investors’ regime, an investment of EUR500,000 within a three-year timeframe is required, which could be combined with the visa programme. The investor is only subject to tax on their Greek sourced income. Any foreign source income is tax exempt against an annual flat tax of EUR100,000. The regime is applicable for 15 years unless the taxpayer decides to exit earlier. 

The pensioners’ regime offers a 7% flat tax on their worldwide income for the above period exhausting the Greek tax liability of the applicant, provided that the pension has been financed by their employer(s), at least partially.

The executives’ regime provides for a tax exemption on 50% of the employee’s salary for seven years. 

The three tax resident regimes provide a consistent tax status for a sufficient period of time; however, guidance when entering one of the regimes is required to obtain clarity about the rights and obligations involved.    

Family Offices

Recently, Greece has introduced a legal framework in order to integrate family offices (FOs) into the Greek business landscape, aimed at assisting wealthy families who reside in Greece to manage their assets more efficiently. FOs are established to manage assets and investments for individuals and their family members who are tax residents of Greece. Key points for establishing a family office in Greece include the legal structure, tax residency requirements, eligible shareholders/partners, and operational requirements such as employing at least five people and incurring annual operational expenses of at least EUR1 million. The tax regime mandates that FOs declare their primary activity as “family wealth management services” and calculate taxable income based on gross revenue or a profit margin of 7% on total expenses.