In 2021, Greece welcomed an impressive 90.2% increase in Foreign Direct Investment (FDI). According to provisional data from the Bank of Greece, net inflows of Foreign Direct Investment to Greece amounted to more than €5.3 billion (€5,350 million) in 2021 compared with €2.8 billion (€2,813 million) in 2020.This represents a new record, confirming the positive outlook for the Greek economy as well as the country’s successful efforts in attracting foreign investment.
In view of the above, it is obvious that the economic environment in Greece allures more and more high-net-worth investors as well as high income earners every year.
The Greek parliament, taking advantage of the fact that increasing concentration of wealth held by very wealthy families and rising globalization are fueling the growth of family wealth management companies, known as “family offices”, passed Law 4778/2021, as amended by Law 4916/28.03.2022, introducing a new legal and fiscal framework regarding wealth management, aiming to render Greece an even more welcoming destination for investors.
It is proven that hundreds of wealthy investors (including millionaires) who have already become permanent residents in Greece have shown an interest in the creation of “family offices”.
The scope and the services provided by family offices which are established in Greece are set out by Decision A. 1043/01.04.2022 issued by the Secretary of Finance and the Director of Independent Authority of Public Revenue.
What is a family office?
A family office is a special purpose vehicle having as its exclusive purpose the management of assets and investments owned by individuals.
Adding to the already advantageous framework, namely the “non-dom” scheme and the special tax incentives for pensioners, foreign and self-employed workers so as to move their tax residence in Greece, the introduction of single-family offices promises the completion of the aforesaid framework, by offering the stimulus necessary in order to attract the personal investments of said investors in Greece, whereby bringing about a spillover effect for the development of the economy.
Family Offices are legal entities which can operate under any legal form, with the exception of non-profit legal entities, having as their exclusive special purpose the management of the wealth of individuals and their family members, including their family assets, the investments and the money flows they hold directly or indirectly, via legal entities.
The provisions regarding Family Offices shall apply to natural persons, current or prospective tax residents in Greece, regardless of their respective tax regime.
Shareholders, partners or members of a “family office” can be: (i) a Greek tax resident individual, (ii) close family members of the resident, such as a spouse, parents and grandparents, and unmarried or underage children, and (iii) Greek or foreign legal entities in which the foregoing individuals hold a majority stake.
It should also be highlighted that a legal entity already established in a foreign country can operate as a family office provided that it transfers its registered seat in Greece.
Moreover, the Family office which is established in Greece as a capital company or private company or branch of a foreign family office established abroad must be registered at the Greek Business Registry (GEMI) and comply with the applicable legislation of GEMI; a service which we can undoubtedly provide you with, since the satisfaction of our clientele can give witness to the expertise and the leading professional assistance we offer with any issue related to business and corporate law.
Preconditions for the establishment of a Family Office
The following requirements need to be met cumulatively so as for a Family Office to lawfully operate in Greece:
1) The Family Office should employ at least five (5) individuals of various sectors of expertise in Greece within 12 months of its establishment and henceforth. It is worth mentioning that a partner or a shareholder of a Family Office cannot be considered as an employee.
2) The entity should spend at least at least €1.000.000,00 in operation costs in Greece on an annual basis.
Validity check
According to Art. 7 of Decision A.1043/2022, within a period of one month from the submission of the tax income return, a Family Office in order to ascertain compliance with the requirements of the Law’s provisions, is obliged to forward to the Tax Authority of Athens (“FAE Tax Office”) certain documents, namely:
· The relevant forms proving the employment data of the employees of the Family Office for a period of 12 months,
· Copy of financial statements,
· A solemn declaration signed by the legal representative of the Family Office regarding its members (partners/shareholders),
· A solemn declaration signed by the legal representative of the Family Office stating that the company has provided support exclusively to the natural person and his/her family members and has not pursued any other activity out of its specified purpose,
· Documents proving that the family status of the family members has not changed (e.g. marital status, child status etc.),
· Proof that expenses and income have been incurred through bank accounts.
The competent Tax Office is required to issue a decision within one month of the submission of the above-mentioned supporting documents. In case that the above documents are not complete or sufficient, an invitation is uploaded on the taxpayer’s TaxisNet account, at the latest within three (3) business days (from the one month period timeframe in which the Tax Office is obliged to reply). As a result, the person liable to issue the missing or incomplete documents must revert accordingly.
If the taxpayer fails to respond within thirty (30) days of the issuance of the official invitation or if upon the examination of the documents provided, the Tax Office reaches the conclusion that the Family Office does not meet the Law’s provisions, an audit order is issued by the competent tax audit authorities.
Qualifying Services
The following services may be provided by a family office (based on Art. 4 of Decision A.1043/2022):
• Services related to the personal and social life of family members. This
category of services includes public relations, security, cooks, housekeepers,
teachers, educators, babysitters, drivers, technicians, gardeners, cleaning
services, supply of goods, and management of charity work.
• Administrative support services. This category of services includes secretarial support, management of human resources on behalf of family members,
accounting, payment of expenses, management of bank accounts, technical
support for the management and maintenance of real estate and surrounding
areas, and organization of business trips.
• Financial management services. This category of services includes investment management and management of transfers of wealth.
• Strategic planning services. This category of services includes business
consulting, real estate planning, succession planning and educational planning.
• Other advisory services. This category of services includes tax services,
consulting services, legal services, engineering services, medical services,
compliance advice, risk management support, and cyber security services.
The family office cannot provide services or incur expenses that are not related to
the fulfillment of its purpose. When providing qualifying services, the family office
may employ the individuals performing the services, outsource the services to third
parties located within Greece or located elsewhere. However, payments made to
individuals or legal persons that are tax residents in non cooperative states or in
states with a preferential tax regime will not be deductible by the family office unless
they relate clearly to real and customary transactions.
Taxation of the income generated by the Family Office
The gross income generated from the services provided by Family Offices, which is to be collected exclusively through bank transfers, is determined by applying a seven percent (7%) profit margin to all their expenses and depreciation costs, excluding income tax. The expenses of the entity, on which the 7% markup applies, will be deducted from the gross income, on condition that these are booked in accordance with the relevant provisions of the law Greek Accounting Standards legislation (Law 4308/2014). It should be further noted that VAT shall not be imposed on the transactions carried out between the family office and the family members, since they are considered to be incurred within the same entity.
Pending a decision from the Minister of Finance and the Governor of the Independent Authority for Public Revenue which will specify the details for the implementation of the latest tax provisions, this new regime, that will be in force starting this year, is expected to have a twofold beneficial outcome. Apart from attracting investors in the country, Family Offices are expected to create considerable added value, given the relocation of employees who will be employed at these special purpose corporate vehicles.
Reasons for setting up a family office
The advantages of family offices are plenty, which explains their huge success in Australia, Luxembourg, the US, the UK, the UEA, Germany, Switzerland, Singapore and Hong Kong.
Among the numerous benefits, privacy and confidentiality are included, as the family office is the sole entity that keeps all information for all family members, covering the entire portfolio of assets, activities, tax and general personal information.
Investors, law firms and various agencies have asked the Finance Ministry to open up the process and allow non-doms to set up family offices, as is the case in Monaco and Singapore, among other countries.
Maybe your time to set up a family office in Greece has come since private family capital is larger than private equity and venture capital combined and hence, professional assistance is required so that safety can be guaranteed!
At Amoiridis Law Services® we are dedicated at assisting our well-respected clients successfully complete any of their investment projects in Greece. Thanks to our longstanding experience, we are able to provide a full package of consultancy services to our almost exclusively international clientele, customised to their specific needs.
As a result, we have represented clients from all around the globe regarding their projects in Greece. Our network of associate experts, composed by both in-house and external solicitors, notaries, accountants, tax experts, currency exchange experts, realtors etc., enables us to provide an all-in-one package of consultancy services, guiding you through the ways to properly protect your investments.
For any further information and clarifications please do not hesitate to contact our qualified legal team, ready to provide you with further personalized information tailored to your needs and your profile.
You can email us: or call/text us directly at: +306908351705 (WhatsApp/Viber)
Athens, December 2022
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