In February 2021, the Greek parliament passed Law 4778/2021, introducing a new legal and fiscal framework regarding wealth management, aiming to render Greece an even more welcoming destination for high-net-worth investors. 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. Their family members, including, as it is exhaustively provided by the law, the spouse, the unmarried children and the parents of the spouses, as well as legal entities in which these family members participate can constitute a member in a Family Office.
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.
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.
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.
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Athens, April 2022