GREECE

 

COUNTRY

GREECE

REGION

Southern Europe

POPULATION

10,569,703 (July 2021 est.)

GENERAL INTRODUCTION

Greece is a country located in Southern Europe on the southern end of the Balkan Peninsula, possessing an archipelago of about 2,000 islands. It has land borders with Albania, Macedonia, Bulgaria, Turkey, the Aegean Sea, the Ionia Sea, and the Mediterranean Sea. Greece has a strategic location dominating the Aegean Sea and southern approach to the Turkish Straits. The government system is a parliamentary republic; the chief of state is the president, and the head of government is the prime minister. Greece has a market economy in which the prices of goods and services are determined in a free price system. Greece is a member of the European Union (EU).

Within the framework of general legislative reforms relating to limited liability companies, a new law was introduced (Law 4548/2018 Reform of the law of Sociétés Anonymes, Government Gazette Α, 104/13.06.2018) leading to the repeal of most of the Articles of Law 2190/1920. Moreover, provisions found in other legislative texts relating to the société anonyme have been codified, several issues have been clarified and new regulations have been introduced. As a result, the l relating to the société anonyme has been simplified for local businesses and has become more appealing to foreign investors. The new law came into force on 1 January 2019.

Law 4399/2016, Statutory Framework for the Establishment of Private Investments Aid Schemes for the Regional and Economic Development of the Country, remains the main investment incentives law, and is now in force after its amendment by Law 4684/2020.

Another important development with regard to strategic investments is the issuance of Law 4635/2019, I Invest in Greece and other provisions, that aims to simplify strategic investments, licensing and introduces certain fast-track provisions and urban-planning related incentives.

After declining for several years in the past decade, Greece’s economy has begun to grow again, and the country completed its third international bailout in August 2018. However, Greek sovereign debt still stood at 177% of the GDP in 2019 and banks are burdened with NPLs, which still account for over 40% of the loans market. Ongoing high taxation, long arrears in state procurement payments and the banks reluctance to make new loans have created a lack of liquidity in the private sector and created significant delays in tax payments. This has been exacerbated by the COVID-19 pandemic. However, the economy has still been steadily projected as being on the right track throughout the previous few years. The pandemic-related challenges are to be tested in the near future (especially in light of Greece’s dependence on tourism) and so will be the government’s effort to support liquidity through domestic and EU funds.

Despite the fiscal crisis that brought the country into disarray between 2010 and 2018, Greece maintains its traditional comparative advantages as a destination for inward investment because of both:

•  Its geo-strategic position.
• Investment opportunities arising from the financial crisis itself.
• Restructuring and reform processes in both the private and public sectors have been under way over the past decade. Although these processes have developed more slowly than anticipated, they have been contributing to the increase in the economy’s competitiveness.

The 2019 novel coronavirus disease (COVID-19) pandemic poses new challenges to the Greek economy due to the country’s dependence on the services market and tourism.

Greece is a multi-party democracy with a presidential parliamentary system based on the principle of the separation of powers into legislature, executive and judiciary. Legislative power is exercised by the:

• Hellenic Parliament.
• President of the Republic, who is the head of state and is elected by the Parliament.

Greek law has developed from the continental European civil law tradition that has been primarily shaped by French and German law. Consequently, Greek law has been driven by the primacy of legislation. Customs are of supplementary use in contemporary Greek law and do not function as laws. Judicial precedents and legal theory are not considered to be sources of law and their influence on the interpretation and the application of law is of secondary importance. The single most important element of the Greek legal system is the Greek Constitution which, among other things:

• Sets out guidelines on statutory law.
• Provides for individual political and social rights.
• Assigns the monitoring of the constitutionality of laws to the judiciary.

Unlike the Anglo-American legal tradition, Greek law draws a fundamental distinction between public and private law. Whether an issue is a public or private matter depends on whether at least one of the parties involved in a legal relationship acts in a public authority capacity. Greek private law also makes a distinction between civil law and commercial law. Greek civil law is outlined in the Greek Civil Code, which mostly follows the German Civil Code. By contrast, commercial law, which is a separate branch of Greek law, has had a stronger French influence stemming from the Napoleonic Commercial Code of 1807, which was adopted by the Greek legal system at the time of the Greek state’s creation in the 1830s. Nonetheless, Greek commercial law has been extensively amended over time, and the influence of the German legal tradition is significant.

WIFI SPEED

Average connection speed (Mbit/s) – 23.7
Broadband average connection speed (Mbit/s)- 36.73

ELECTRICAL OUTLET

For Greece there are two associated plug types C and F. Greece operates on a 230V supply voltage and 50Hz.

PER CAPITA GDP

$29,799 (2019 est.)
$29,206 (2018 est.)
$28,594 (2017 est.)

note: data are in 2010 dollars

CLIMATE

Temperate; mild, wet winters; hot, dry summers

RESIDENCY- BY- INVESTMENT

Greece Golden Visa Program- a residence-by-investment program launched in 2013 that enables non-EU nationals and their family members to obtain permanent residence permits in Greece. The residence permits may be renewed every five years. The program’s qualifying options are:

Real estate options

• An investment in real estate property with a minimum value of EUR 250,000, plus the applicable taxes
• A 10-year lease agreement for hotel accommodation or furnished tourist residences in tourist accommodation complexes (Article 8 of Law 4000/2001)
• A 10-year time-sharing agreement for hotel accommodation (Law 1652/1986)

Key benefit

• The right of free movement to Greece and Europe’s Schengen Area

Requirements

• The applicant must be a non-EU citizen
• The applicant must be over 18 years old & in good health
• Must have medical insurance
• Make a qualifying real-estate investment which must be held for the entire duration of the residence perm

Processing time

• One–two months from submission of the application to approval

NATURAL RESOURCES

Lignite, petroleum, iron ore, bauxite, lead, zinc, nickel, magnesite, marble, salt, hydropower potential

ETHNIC GROUPS

Greek 91.6%, Albanian 4.4%, other 4% (2011)

note: data represent citizenship; Greece does not collect data on ethnicity

LANGUAGES
Greek (official) 99%, other (includes English and French) 1%

RELIGIONS

Greek Orthodox 81-90%, Muslim 2%, other 3%, none 4-15%, unspecified 1% (2015 est.)

MEDIAN AGE

total: 45.3 years
male: 43.7 years
female: 46.8 years (2020 est.)

URBANIZATION

urban population: 80% of total population (2021)
rate of urbanization: 0.11% annual rate of change (2020-25 est.)
Total population growth rate v. urban population growth rate, 2000-2030

PHYSICIAN DENSITY

5.48 physicians/1,000 population (2017)

GOVERNMENT TYPE

Parliamentary republic

UNEMPLOYMENT RATE

17.3% (2019 est.)
19.34% (2018 est.)

TAXES

Personal Income Tax Rate (highest marginal tax rate) – 44%

Corporate Income Tax Rate (excluding dividend taxes) – For the tax year 2021 onwards, the CIT rate of legal entities, with the exemption of credit institutions, is reduced from 24% to 22%.

For income earned from the fiscal year 2019 onwards, an income tax rate of 24% is applicable to business incorporated in the form of:

• Sociétés anonymes.
•  Limited liability companies.
• Private companies.
• Partnerships in the form of a limited partnership or general partnership.
•  Other legal persons and entities defined in the Income Tax Code (ITC).

All partnerships are subject to this tax rate, regardless of whether they maintain single-entry or double-entry accounting books (Articles 45, 47(2) and 58(1), ITC).

This reduced rate does not apply for Greek credit institutions and Greek branches of non-resident credit institutions that are taxed at a rate of 29% (Article 58(2), ITC).

There are several legal forms that a business established to operate in Greece can take. An entity that has its registered place of business in Greece is normally considered to be a Greek entity, even if all of its members are foreign. The following entities, mainly used in Greece itself, are subject to Greek corporate income tax at the rate of 24% under Law 4172/2013, as amended by Law 4685/2020 and in force from 12 December 2019.

• Joint stock company (société anonymes) (Ανώνυμη Εταιρεία).
• Limited liability company (Εταιρεία Περιορισμένης Ευθύνης).
• Private company (Ιδιωτική Κεφαλαιουχική Εταιρεία).
• General partnership (Ομόρρυθμη Εταιρεία).
• Limited partnership (Ετερόρρυθμη Εταιρεία).
• Greek branch of a foreign company.

(Articles 45, and 58(1), Greek Income Tax Code (ITC), as amended and in force from 12 December 2019.) There are no restrictions on the participation of foreign EU individuals or entities in Greek entities.

According to Article 6 of the ITC, a business that has its registered seat or a permanent establishment in Greece must pay tax on its taxable income arising in Greece and abroad (that is, its annual worldwide income). A permanent establishment results from any fixed place of business through which business is wholly or partly carried out and includes:

• A place of management.
• A branch.
• An office.
• A factory.
• A workshop.
• A mine.
• An oil or gas well.
• A quarry.Any other equivalent place.
• A building site or construction or installation project or any other activity supervisory to any of these if it lasts for more than three months.

However, a company does not have a permanent establishment in Greece if the:

• Use of facilities in Greece is solely for the purpose of storage, display or delivery of goods or merchandise belonging to a foreign person (natural or legal).
• Maintenance of a stock of goods or merchandise in Greece belonging to the foreign person is solely for the purpose of storage, display or delivery.
• Maintenance of a stock of goods or merchandise in Greece belonging to the foreign person is solely for the purpose of processing by another person in Greece.
• Maintenance of a fixed place of business in Greece is solely for the purpose of purchasing goods or merchandise or of collecting information for the foreign person.
• Maintenance of a fixed place of business in Greece is solely for the purpose of carrying out, on behalf of the foreign person, any other activity of a preparatory or auxiliary character.
• Maintenance of a fixed place of business in Greece is solely for any combination of the activities mentioned above, provided that the overall activity of the fixed place of business resulting from this combination is of a preparatory or auxiliary nature.
• If a person in Greece other than an independent agent acts on behalf of a foreign person and has the authority to conclude contracts in the name of that person, such a foreign person is deemed to have a permanent establishment in Greece. However, a foreign person is deemed not to have a permanent establishment in Greece if he carries out business there through a broker, general commission agent or any other agent of an independent status, as long as these persons are acting in the ordinary course of their business. The fact that a Greek enterprise controls or is controlled by a foreign enterprise does not alone give rise to a permanent establishment for the foreign enterprise. In any event, if the foreign company is a tax resident of a country with which Greece has signed a double tax treaty, it should also consult the relevant provisions of that treaty regarding permanent establishment (Article 6, ITC).

Non-dom Regime for Investors

Under this regime, individuals will pay a lump-sum tax of EUR 100,000 per tax year, irrespective of the amount of income earned abroad, for a maximum of 15 fiscal years. Moreover, it is possible to extend the regime to any of their relatives by paying an additional tax equal to EUR 20,000 per person per tax year. In such cases, the provisions of inheritance, gift, and parental grant tax will not apply.