Attracting foreign individuals to Greece: Keep it short and sweet
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Over the past 12 months, the Greek government has put in place, for the first time, a triple set of tax incentives targeted exclusively at foreign tax residents who are considering redomiciling to Greece. It is an ambitious plan addressed to a diversified audience: high net worth individuals, retirees wishing to spend time in Greece, expats – including the “brain drain” generation – and the “work from anywhere” crowd.
These are incentives inspired by similar regimes that have been applied successfully in other European countries for several years. For instance, the new HNWI tax regime which, technically speaking, is quite similar to the Italian substitute tax regime, ranks quite well, when compared to the Swiss forfait fiscal regime. (It’s important to note here that the more than 50% difference in living expenses between the two countries offers Greece a distinct advantage.) Judging from the market reaction, the Greek HNWI regime is indeed an option worth considering, especially following the expiration of the 15-year term of the UK resident non-dom regime. This also helps to address post-Brexit immigration concerns. Succession planning for qualifying individuals and their families is definitely a strong feature of the new regime.
The new regime is also warmly welcomed by foreign retirees. In addition to the country’s main attraction points – sun, sea, islands – people wishing to spend more time in Greece can now enjoy yet another advantage: an attractive flat 7% final tax for 15 years, following qualification. Similar regimes have also worked successfully in, among others, Portugal and Italy. What stands out in the case of Greece is the absence of geographical restrictions: Qualifying retirees may relocate freely within Greece, as opposed to the Italian regime, which requires redomiciliation in specific regions of Italy.
The third and final part of the set was put in place a few weeks ago: a 50% income tax break on Greek-sourced salaries for qualifying executives, employees, freelancers and other entrepreneurs who relocate to – and work from – Greece. This is an ambitious attempt to reverse Greece’s brain drain, lure expatriates and experts in the digital field, reduce the payroll cost for foreign investors setting up new activities in Greece, as well as address post-Brexit immigration needs.
Will this plan prove to be a game-changer? Undoubtedly, redomiciliation is a life-changing decision and such decisions are not based on figures alone. Even if we only take taxes into account, a low tax rate is not enough of an incentive; long-term stability and “customer” satisfaction on all levels are perhaps even more important. To that end, we should facilitate qualification and compliance procedures, eliminate interaction with local tax authorities, set up a Q&A helpdesk to accelerate practical guidance when assessing qualification, and address immigration matters for non-EU applicants. Let’s remove as many barriers as possible. Let’s keep it short and sweet.
