Earlier this year, a leading London hedge fund, with offices around the world, received a visit from a rather unexpected group of interested parties: representatives of the Greek government.
“Greece came to the office and it was a very attractive proposition… they were promoting the fiscal benefits [for] hedge funds”, said an executive at the fund.
Greece threw down the gauntlet this summer to the United Kingdom, Switzerland and the Gulf countries, establishing a new tax regime designed to attract investors to set up a substantial business presence in Athens, the Financial Times write.
The country has for years offered certain tax breaks to wealthy individuals, but in June, following consultations with hedge fund managers, it quietly introduced incentives aimed specifically at private equity firms and hedge funds.
Executives who meet the requirements and transfer their tax residence to Greece pay a 5% tax on bonuses and carried interest — investment managers’ profits from successful deals — versus the normal rate of 15%.
This week, Athens achieved its most significant success to date, when it became known that billionaire hedge fund manager Chris Rokos (photo) is transferring his tax residence from the United Kingdom to Greece.
Vasilis Karatzas, adviser to the Minister of National Economy and Finance Kyriakos Pierrakakis, had been approaching Rokos for months, as he was considering where to transfer his tax residence, while Pierrakakis said that Rokos had spent an hour with him in his office, a few hours before his announcement.
Rokos followed several other prominent wealthy individuals who have left the United Kingdom in recent years, reacting to the fiscal tightening under the Labour government, the strict inheritance tax regime and the abolition of tax breaks for “non-doms”.
Greece has also attracted growing interest from Gulf investment firms, Karatzas said, amid the regional conflict triggered by the American and Israeli attacks on Iran in February. Karatzas, who designed Greece’s tax proposal, said that Athens has held discussions with various large hedge funds about establishing operations in the country.
Since 2019, Greece has allowed wealthy individuals — both foreigners and Greeks — whose tax residence is in the country to exempt foreign income from Greek taxation by paying an annual flat tax of €100,000.
This is a regime similar to, but cheaper than, Italy’s, where a flat-tax regime of €300,000 annually has attracted private equity executives, bankers and entrepreneurs.
Crucially, foreigners are also exempt from Greek inheritance tax on assets located outside Greece.
The new preferential tax treatment for private equity firms and hedge funds comes with a significant condition: the Greek company or operation employing them must spend at least €3 million annually on its operation in the country. The threshold was established by the government to ensure that the funds would set up real operations and not merely a nominal presence.
“The main goal is for them to come here and create real businesses”, Karatzas told the Financial Times. “Either you really come, or you do not come at all”.
Rokos Capital Management is expected to start with a relatively small presence in Athens, but its operation could eventually grow to about 50 people, according to sources familiar with the matter. RCM declined to comment.
The Greek government has also sought to shape the incentives in such a way that investment managers can establish operations in the country without creating unwanted tax liabilities for their broader international activities. This is a key differentiator compared with Italy, said Elsa Littlewood, partner in private client tax services at BDO.
Executives who transfer their tax residence from abroad can also already benefit from Greece’s so-called 5C regime, under which income from eligible salaried employment is 50% exempt from taxation for seven years.
Beyond London and the Gulf, government officials also expect interest from Switzerland. However, several people familiar with the offer warned that Greece must prove that it is a serious destination for the financial and business sector.
“Greece is good for the creative industries, but for business the issue remains open”, said a European media entrepreneur, who left London for Athens last year after more than two decades in the United Kingdom.
“Life is cheaper and you have the sun”.
A Greek investor based in London said he knows of at least 20 Greek families who moved from London to Greece in the past two years. “Deep down, they would prefer to stay in London, but inheritance tax left them no other choice”, he said, referring to the British 40% tax on assets above a certain threshold, even for foreigners.
“The inquiries we are receiving from high-net-worth clients in the United Kingdom about Greece have certainly increased, but at this stage it is not the preferred destination”, said Vincent Lazimi, partner at the law firm Jeantet in Paris. “It is mainly Italy and Switzerland, sometimes Dubai and sometimes Greece”.
Karatzas, however, believes that Greece’s improved fiscal position will begin to change the picture. “Greece has fiscal security for the next decade”, he said. “Because our debt has been restructured, we have a predictable fiscal path and we do not need to raise our taxes”.
The establishment of international hedge funds could have an impact beyond the relatively small number of highly paid executives expected to relocate, according to Vasilis Vizas, head of tax and legal services at PwC Greece.
“There are fewer than a dozen licensed hedge fund managers in Greece and they mainly manage Greek assets”, Vizas said. “For the first time, we could have people based here who will manage significant international assets”.
The significance lies not simply in the fact that “10 wealthy people will come here and spend a lot of money”, Vizas added, but in the possibility of creating an ecosystem of asset management, with service providers around international firms, which until now did not exist in Greece.
The influx of new residents may be constrained by the lack of quality office space, housing suitable for executives relocating to the country, and places in international schools.
Inspired Education Group, which has private schools around the world, entered the Greek education market in September 2024, acquiring the well-known Moraitis School and Educational Renaissance Kosteas Geitonas in Athens. It is building a third school, with a capacity of 1,300 students, in the Hellinikon development, the largest urban regeneration project in Europe, which will offer both Greek and international curricula.
“With the new government we felt greater confidence regarding stability and growth opportunities in Greece”, said Nadim Nsouli, founder and chief executive of Inspired. “We see people from Southern Europe and the Middle East moving to Athens. They are not yet people from London; Athens is not yet considered a financial centre”.
The housing market in Athens has recovered and prices have exceeded pre-crisis levels, said Dimitris Manousakis, head of Savills Greece. “There is a serious shortage of new apartments”, he said.
The city’s southern suburbs — a coastal zone that has been given the name Athens Riviera — have recorded an influx of foreign buyers from Asia, the Arabian Peninsula and Israel, he added.
Some foreign buyers will soon face higher transaction costs: earlier this month, the Greek government sought to increase the property transfer tax for buyers from non-EU countries from 3% to 15%.
The government’s effort to attract investment firms marks a striking reversal for a country that a decade ago was struggling to keep capital within its borders. Greek banks were placed under capital controls in 2015, at the height of the public debt crisis, while the country spent years raising taxes as it tried to restore its public finances.
However, it may still need to make an effort to convince the international financial community to move operations to Greece on a large scale.
The hedge fund executive who received the Greek government’s presentation said that employees did not yet seem ready to move to the country. “We looked at it, but for the time being there are no interested parties”, he said.