Earlier this year, a top London hedge fund with offices around the world was approached by a group of unlikely suitors: representatives from the Greek government.
“Greece came to the office and it is [was] a very attractive proposition . . . they were marketing the fiscal benefits [for] hedge funds,” said an executive at the fund.
Greece has this summer thrown down the gauntlet to the UK, Switzerland and the Gulf with a new tax regime designed to lure investors to establish substantial operations in Athens.
The Mediterranean country has for years offered some tax breaks for wealthy individuals, but in June, after consulting with hedge fund managers, it quietly introduced incentives specifically to benefit private equity and hedge funds. Qualifying executives who relocate to Greece pay a 5 per cent tax on bonuses and carried interest — investment managers’ profits on successful deals — down from the normal rate of 15 per cent.
This week, Athens secured its highest-profile win to date when it emerged that billionaire hedge fund manager Chris Rokos was relocating his tax residency from the UK to Greece.
Vasilis Karatzas, an adviser to finance minister Kyriakos Pierrakakis, courted Rokos for months as he weighed up where to move, while Pierrakakis said Rokos had spent an hour with him in his office hours before his announcement.
Rokos followed several other high-profile wealthy individuals who have left the UK in recent years, reacting to fiscal tightening under the Labour government, a tough inheritance tax regime and the end of “non-dom” tax breaks.
Greece has also drawn growing interest among Gulf investment firms, said Karatzas, in the face of the regional conflict sparked by February’s US and Israeli attacks on Iran. Karatzas, who designed Greece’s tax offer, said Athens had held discussions with various large hedge funds about establishing operations there.
Greece has since 2019 allowed wealthy individuals — both foreigners and Greeks — whose tax residency is in the country to exempt their foreign gains from its tax net by paying an annual flat tax of €100,000. This is a similar, but cheaper, arrangement to Italy, where a flat tax regime of €300,000 a year has drawn in private equity executives, bankers and entrepreneurs.
Crucially, foreigners are also exempt from Greek inheritance tax on assets located outside Greece.
The new preferential treatment for private equity and hedge funds comes with a significant condition: the Greek operation employing them must spend at least €3mn a year operating in the country. The threshold was designed by the government to ensure that funds establish genuine operations rather than a nominal presence.
“The main objective is for them to come here and set up real businesses,” Karatzas told the FT. “Either you come properly or you don’t come at all.”
Rokos Capital Management is expected to start with a relatively small presence in Athens, but the operation could eventually grow to about 50 people, according to people familiar with the situation. RCM declined to comment.
The Greek government has also sought to structure the incentives so that investment managers can establish operations in the country without creating unintended tax liabilities for their wider international businesses. This is a key differentiator from Italy, said Elsa Littlewood, private client tax partner at BDO.
Executives relocating from abroad can also already benefit from Greece’s so-called 5C regime, under which qualifying employment income is subject to a 50 per cent tax exemption for seven years.
As well as London and the Gulf, government officials expect interest from Switzerland. But several people familiar with the offering cautioned that Greece needed to prove its credentials as a serious place for finance and business.
“Greece is good for the creative industries, but the jury is out for business,” said a European media entrepreneur who left London for Athens last year after more than two decades in the UK.
“Life is cheaper and you have the sun.”
One London-based Greek investor said he knew of at least 20 compatriot families who relocated from London to Greece in the past two years. “Deep down, they would rather stay in London, but the inheritance tax gave them no choice,” he said, referring to the UK’s tax of 40 per cent on assets above a given threshold, even for foreigners.
“Enquiries about Greece from our high-net-worth clients in the UK have definitely increased, but at this stage it’s not the favoured destination,” said Vincent Lazimi, a partner at law firm Jeantet in Paris. “It’s mostly Italy and Switzerland, sometimes Dubai, sometimes Greece.”
But Karatzas thinks that Greece’s improved financial position will start to move the needle.
“Greece has fiscal security for the next decade,” he said. “Because our debt has been restructured, we have a predictable fiscal path and we don’t need to increase our taxes.”
The arrival of international hedge funds could have an impact beyond the relatively small number of highly paid executives expected to relocate, according to Vassilis Vizas, tax and legal leader at PwC Greece.
“There [are] less than a dozen licensed hedge fund managers in Greece and they largely manage Greek assets,” Vizas said. “For the first time, you could have people based here managing substantial international assets.”
The significance was not simply that “10 wealthy people come here and spend a lot of money”, Vizas added, but the potential to create an asset-management ecosystem of service providers around international firms that has not previously existed in Greece.
The flow of newcomers may be limited by shortages of high-quality office space, housing suitable for relocating executives and places at international schools.
Inspired Education Group, which owns private schools around the world, entered the Greek education market in September 2024 by acquiring the well-known Moraitis School and the Costeas-Geitonas School in Athens. It is building a third, 1,300-place school at the Ellinikon development, Europe’s largest urban regeneration project, which will offer both Greek and international curricula.
“With the new government we felt more confident about stability and growth opportunities in Greece,” said Nadim Nsouli, founder and chief executive of Inspired. “We’re seeing people from southern Europe and the Middle East moving to Athens. It’s not the London people for now; it’s not perceived yet as a financial centre.”
The residential real estate market in Athens has rebounded and prices have surpassed pre-crisis highs, said Dimitris Manoussakis, head of Savills Greece. “There’s a serious shortage of new apartments,” he said.
The city’s southern suburbs — a coastal stretch dubbed the Athens Riviera — have experienced 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 country’s property transfer tax for non-EU buyers from 3 per cent to 15 per cent.
The government push to attract investment firms marks a striking reversal for a country that a decade ago was struggling to keep capital inside its borders. Greek banks were subjected to capital controls in 2015 at the height of the sovereign debt crisis, while the country spent years increasing taxes as it sought to repair its public finances.
But it may still have work to do to convince the international finance community to move there in large numbers.
The hedge fund executive who received the Greek government’s marketing pitch said that employees did not seem ready to move to the country just yet.
“We looked into it but for the time being there are no takers,” he said.
