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Top 3 reasons why foreign nationals should transfer their financial interests in Greece!

20 Mar 2021
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Relocate to Greece

Greece is a well-known destination on a global level for the excellent weather, the crystal-clear waters, the beautiful and diverse beaches, the archaeological sites connected to the long history that the country has and its many picturesque islands.

Over the past few years though, Greece has taken steps towards becoming something more than just a travel destination, aiming to attract both individuals (pensioners & employees) and business investments. The available incentives are making a real difference for both of the aforementioned categories, since the procedures have been simplified and the taxation schemes have become very attractive.

 

Pensioners

Flat 7% Taxation on total global income

This new legislation suggests that pensioners may transfer their Fiscal(Tax) Residence to Greece and be subject to an alternative method of taxation of 7%, provided that cumulatively:

  1. a) They were not tax residents of Greece for the previous five(5) out of six(6) years prior to the transfer of their tax residence to Greece,
  2. b) The country of the original tax residence, on which they are being taxed at the moment, has an agreement of administrative cooperation in the field of taxation in place with Greece.

The pensioners will pay each tax year an independent tax at a rate of seven percent(7%) for their total global income.

The application of the above-mentioned alternative method of taxation starts from the tax year following the year of the request submission and ends after the end of fifteen (15) tax years, at most.

 

Employees/Freelancers

50% tax-break for relocating professionals

This particular piece of legislation aims on attracting foreign tax residents, who wish to transfer their tax residency and be employed in Greece under a “new employment position” or as freelancers and get the benefit of becoming exempt from paying income tax and solidarity tax on 50% of their Greek source employment income or freelancer income, provided that cumulatively:

  1. a) They were not Greek tax residents for the previous five(5) out of six(6) years prior to the transfer of their tax residence to Greece,
  2. b) They relocate from an EU/EEA country, or a country with which Greece has a standing agreement regarding an administrative cooperation on tax issues,
  3. c) They provide employment services to a Greek legal entity or to a local branch of a foreign company,
  4. d) They declare that they are going to stay in Greece for at least two years.

This taxation method will additionally apply to those who intend to transfer their tax residency to Greece, in order to establish a business activity and set up shop as freelancers.

The above-mentioned individuals are also going to be exempt from the application of local tax regulations on annual imputed income deriving from ownership or possession of a residence or a private vehicle.

It is also worth mentioning that any other local or foreign source incomes will be taxed according to standard Greek tax regulations.

The application of this special tax regime is provided for the fiscal year in which the application was submitted and for the following seven fiscal years. No further extension can be provided.

 

Residence Permits for Third-Country citizens

The Golden Visa Program

The most inviting option that a Third-Country citizen possesses, is that of the Golden Visa Program. The program allows the granting of residence permits to third country citizens and to members of their families, who purchase real estate property in Greece, with the value of investment equaling or exceeding the amount of €250,000.

The Golden Visa’s residence permit duration is for five years, but is subject to renewal for additional 5 years each time, provided that the applicants still own the property.

It even does not matter whether the property belongs to a legal entity, as long as the company shares or the shareholdings belong in whole to the individual that requests the residence permit.

An extra benefit of the Golden Visa is that it gives the opportunity to the applicant to acquire a European residence permit which will grant him free movement to travel within the Schengen Zone (26 countries).

The above Third-Country citizen may be accompanied by members of his family to whom an individual residence permit is issued upon their request, one that expires at the same time as of the original applicant’s.

The family members that can be included in the above regime are presented below:

  1. Spouses
  2. Spouse or partner with whom the Third-Country national has a valid cohabitation agreement in Greece
  3. The direct unmarried descendants of the spouses, who are under the age of 21
  4. the direct unmarried descendants of the supporter or of the other spouse/partner, provided that their custody has been legally entrusted to the sponsor(for his/her children) and to the other partner (for his/her children), under 21 years of age

 

Business Investment

Greece has made significant changes recently regarding the setting-up procedures for businesses while also offering more attractive taxation incentives.

The time consuming, complex and bureaucratic procedures that had for decades positioned Greece as a backwater country within the EU, in terms of business opportunities and general conduct, now belong to the past and have been replaced by a modern, fast-tracking and online business environment.

The introduction of more flexible legislation, changes to the complex legal framework regulating business affairs, and the boosting of investment incentives such as lower corporate and personal income tax – are strong signs to investors that Greece is now open for business.

The new tax regulations have brought more good news for any interested party willing to invest in Greece. The corporate income tax rate has been lowered from 28% to 24%, and tax on dividents has been reduced from 10% to 5%.

The Greek Government considers becoming even more inviting to business investments by introducing even lower corporate taxation rates in the near future.

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