Greece is stepping up its effort to lure investment professionals from London, pitching a new tax regime for fund managers alongside a broader package designed to make Athens a viable base for international finance.
Vassilis Karatzas, a special adviser to Economy and Finance Minister Kyriakos Pierrakakis, spent recent days in London meeting representatives of roughly 30 investment funds. At the center of the discussions was Greece’s new treatment of carried interest, the performance-linked compensation that can account for a substantial share of senior fund managers’ earnings.
The pitch went well beyond taxes. Greek officials discussed where executives and their families could live in the Athens area, housing options and access to English-language and international schools. The aim was to address the practical considerations facing managers contemplating moving their tax residence, families and part of their business operations from London to Greece.
ΔΙΑΒΑΣΤΕ ΕΠΙΣΗΣ
Athens is seeking more than wealthy new taxpayers. The government wants relocations to bring investment firms, highly paid professionals, financial expertise and jobs.
Its principal incentive is a 5% tax rate on qualifying carried interest under legislation passed this summer. Carried interest differs from a conventional salary or annual bonus because it is contractually tied to the performance of investments managed by a fund.
Under the new framework, a senior fund executive relocating from London to Athens who receives €1 million, equivalent to about $1.2 million, in qualifying carried interest could face a €50,000 Greek tax bill, provided all statutory conditions are met.
The incentive comes with a significant requirement: The operation in Greece must have genuine economic substance. A shell company or an Athens mailing address isn’t enough. To qualify, the business must incur at least €3 million in annual expenditure in Greece.
That threshold is intended to translate the tax incentive into economic activity. Spending could include offices and salaries for portfolio managers, traders, analysts, quantitative researchers and staff working in risk management, compliance and technology. While some employees could initially transfer from London, expanding operations could eventually recruit from Greece’s labor market.
The regime has gained attention following reports that billionaire hedge-fund manager Chris Rokos and Rokos Capital Management are establishing a presence in Athens, while Millennium Management has also disclosed plans for an operation in the Greek capital.
The test is whether those moves develop into a broader trend. If even a handful of the roughly 30 firms approached during Karatzas’s London visit establish substantive operations in Greece, Athens could begin capturing a small but meaningful slice of business traditionally concentrated in the City of London.
Prime Minister Kyriakos Mitsotakis, meanwhile, has been courting investors in New York. He met more than 30 institutional investors overseeing over $4.5 trillion in assets, though public accounts of those meetings made no mention of the carried-interest regime. His schedule also includes a meeting with JPMorgan Chase Chief Executive Jamie Dimon on Friday, offering another opportunity for Athens to make its case to global finance.
