Greece is stepping up efforts to attract hedge funds and their senior executives to Athens with a new tax regime aimed at competing with established financial centres including London, Switzerland and Dubai, according to a report by the Financial Times.
The country introduced targeted incentives in June following discussions with alternative investment managers, offering qualifying private equity and hedge fund executives a 5% tax rate on bonuses and carried interest, compared with the standard 15%.
The initiative received a significant endorsement this week when billionaire hedge fund manager Chris Rokos decided to move his tax residency from the UK to Greece.
Rokos, founder of Rokos Capital Management, had been courted by Greek government officials for months as he considered his options. Greece’s finance minister Kyriakos Pierrakakis also met with Rokos shortly before the move was announced.
Athens hopes the move will help establish the country as a more credible destination for international asset managers following years in which Greece was better known for its sovereign debt crisis and capital controls.
Vasilis Karatzas, an adviser to Pierrakakis who helped design the new tax regime, said Greek officials had already held discussions with several large hedge funds about establishing operations in the country. Gulf-based investment groups are also showing increased interest, he said.
The incentives are designed to encourage funds to establish substantive businesses rather than simply move the tax residence of individual executives. A qualifying Greek operation must spend at least €3m a year in the country.
Rokos Capital Management is expected initially to establish a relatively small Athens presence, although that operation could eventually employ around 50 people, according to people familiar with the plans. RCM declined to comment.
Greece already operates a preferential tax regime for wealthy individuals who become tax residents. Since 2019, qualifying individuals have been able to pay a flat annual tax of €100,000 on foreign income and gains, while foreign assets are also exempt from Greek inheritance tax.
Foreign executives relocating to Greece can also potentially benefit from the country’s “5C” regime, which provides a 50% exemption on qualifying employment income for seven years.
Greece has fewer than a dozen licensed hedge fund managers, according to PwC Greece, and most have historically focused on Greek assets. The arrival of international firms could therefore represent a significant change, bringing managers overseeing global portfolios into the country for the first time.
