Athens is attempting to compete with London, Switzerland and Gulf states through a new tax framework for hedge funds and private equity, with a 5% tax on bonuses and carried interest as the central incentive, provided there is a genuine business presence in Greece.

The Greek government has been engaged in a coordinated push to attract international hedge funds and financial executives, positioning Athens as an alternative base to traditional centres such as London, Switzerland and the Gulf states.

The Financial Times describes the case of a large London hedge fund that was visited by representatives of the Greek government, who presented the tax incentives on offer for setting up operations in Greece. “Greece came to the office and it was a very attractive pitch. They presented us with the tax benefits for hedge funds,” an executive at the fund said.

The effort gained particular weight this week with news that billionaire hedge fund manager Chris Rokos is moving his tax residency from Britain to Greece, the most high-profile success so far of the Greek strategy.

A 5% tax on bonuses and carried interest

The government introduced a new regime in June, tailored specifically to private equity and hedge funds, following consultations with fund managers. Executives who meet the criteria and relocate their activity to Greece will be taxed at 5% on bonuses and carried interest (the share of profits that investment managers receive from successful deals), a rate markedly lower than the usual 15%.

However, the favourable treatment comes with one crucial condition: the Greek corporate entity employing the executives must incur at least €3 million in annual operating expenditure in Greece. The threshold was designed to rule out cases where a fund maintains merely a nominal or token presence in the country purely to benefit from the tax break.

“The core aim is for them to come here and build genuine businesses,” Vassilis Karatzas, adviser to the Minister of National Economy and Finance, Kyriakos Pierrakakis, and one of the architects of the tax package, told the FT. “Either you come properly, or you don’t come at all,” he said.

Contacts with Chris Rokos

According to the report, Vassilis Karatzas had been in contact with Rokos for months while the latter weighed his options for relocating his tax residency. Kyriakos Pierrakakis said that Rokos spent around an hour in his office just hours before his decision was announced.

Rokos Capital Management is expected initially to build a relatively small presence in Athens, though according to people familiar with the plans, its operations could eventually grow to around 50 people.

Rokos’ departure from Britain is part of a broader wave of wealthy individuals leaving the UK, driven by the Labour government’s tougher tax policy, the inheritance tax regime and the abolition of non-dom privileges.

The €100,000 regime for the wealthy

Greece has had a special tax regime for wealthy individuals in place since 2019. Foreigners, as well as Greeks, who transfer their tax residency to the country can, subject to the relevant conditions, exempt income earned abroad from Greek taxation by paying a flat annual tax of €100,000.

Italy’s equivalent scheme now carries an annual charge of €300,000 and has already attracted private equity executives, bankers and entrepreneurs.

A further advantage for Greece is that foreign tax residents are exempt from Greek inheritance tax on assets held outside the country.

At the same time, executives relocating from abroad can make use of the so-called 5C regime, which provides a 50% exemption on eligible employment income for seven years.

According to Elsa Littlewood, a tax partner at BDO, the Greek government has sought to design the framework so that investment managers can establish operations in the country without triggering unwanted tax liabilities across the whole of their international businesses, something that sets Greece apart from Italy.

Interest from the Gulf too

Greek interest is not confined to London. According to Vassilis Karatzas, investment firms from Gulf countries are also considering Athens, particularly following the regional turmoil that followed the US and Israeli strikes on Iran in February.

The Greek side has already discussed the possibility of setting up operations in the country with several large hedge funds. Government officials also believe there could be interest from Switzerland.

Athens, however, still has to convince the international financial community that it can function as a mature and credible financial centre.

A European media entrepreneur who moved from London to Athens last year told the FT that “Greece is good for the creative industries, but for business the jury is still out,” adding, however, that “life is cheaper and there’s sunshine.”

“At least 20 Greek families have moved back from London”

A London-based Greek investor said he knows of at least 20 Greek families who have moved from the British capital to Greece over the past two years.

He said several would have preferred, deep down, to remain in London, but British inheritance tax, which can reach 40% above certain thresholds, influenced their decisions.

Vincent Lazimi, a partner at the Paris law firm Jeantet, confirmed that enquiries from wealthy UK-based clients about Greece have increased. He clarified, however, that Greece is not yet their first choice, with Italy and Switzerland still ahead, followed by Dubai and then Greece.

The government is banking on fiscal stability

The Greek side believes one of the key advantages it can now put forward is the country’s improved fiscal position. “Greece has fiscal security for the next decade,” Vassilis Karatzas said. He argued that the restructuring of Greek debt offers a predictable fiscal path and reduces the need for future tax increases.

This picture is markedly different from that of a decade ago, when Greece was struggling to keep capital from leaving the country. In 2015, Greek banks were placed under capital controls at the height of the debt crisis, while for years fiscal adjustment went hand in hand with tax increases.

Betting on a new ecosystem

Attracting international hedge funds could carry greater significance than simply relocating a small number of very highly paid executives.

Vassilis Vizas, head of Tax and Legal at PwC Greece, noted that fewer than a dozen licensed hedge fund managers currently operate in the country, most of them focused on Greek assets. For the first time, he said, there could be executives based in Greece managing large international portfolios.

The crucial point, in his view, is not simply attracting “ten wealthy people who spend a lot of money,” but building an asset management ecosystem around the international firms, one with legal, tax, advisory and other services that has not developed at a comparable scale in Greece to date.

The obstacles: offices, housing and international schools

The effort does, however, face practical obstacles. The FT points to a shortage of high-quality office space, suitable housing for foreign executives and places at international schools. Inspired Education Group entered the Greek market in 2024, acquiring Moraitis School and Kostea-Geitonas Schools, and is currently building a new 1,300-place school in Elliniko offering both Greek and international curricula.

Inspired’s founder and chief executive, Nadim Nsouli, said the company is already seeing people relocate to Athens from southern Europe and the Middle East, though not yet on a large scale from London. “It’s not yet seen as a financial centre,” he noted.

Pressure is also building in the housing market. Dimitris Manousakis, head of Savills Greece, said that prices in Athens have now surpassed their pre-crisis peaks and that there is “a serious shortage of new flats.”

In the southern suburbs and along the Athenian Riviera, there has already been a significant inflow of foreign buyers from Asia, the Arabian Peninsula and Israel.

At the same time, the government has recently moved to raise the property transfer tax for non-EU buyers from 3% to 15%.

Despite the strong tax incentives, Athens has not yet fully won the argument. An executive at the London hedge fund that received the Greek government’s presentation admitted that the firm considered the proposal seriously, but that staff do not currently appear willing to relocate.