Athens is shifting its focus from attracting generic foreign capital to actively courting international fund managers—aiming to establish the Greek capital as a regional hub for investment management operations. The Ministry of National Economy and Finance (MoNEF) has announced that concrete developments under its new initiative are expected within the coming weeks. This effort goes beyond traditional investment promotion: it centers on implementing a recently enacted, more favorable tax framework—Law 5313/2026—which entered into force retroactively for tax years beginning on or after 1 January 2026.
A Strategic Shift in Investment Policy
Minister of National Economy and Finance Kyriakos Pierrakakis recently included the attraction of global fund managers among the government’s three flagship economic interventions scheduled for September—alongside measures introduced at the Thessaloniki International Fair (TIF) concerning income taxation and private debt restructuring. According to the minister, Greece now offers a clear legal and tax environment enabling international fund managers to choose Athens as a base for real operational activity—including setting up local teams, offices, and core management functions.
Removing Key Tax Barriers
The cornerstone of the reform lies in clarifying long-standing ambiguities around tax residency and permanent establishment rules. Under the new law, managing, advising, or administering foreign alternative investment funds (AIFs) from Greece does not automatically confer Greek tax residency on the fund itself—or trigger permanent establishment status for the foreign manager. Similarly, when a Greek entity provides portfolio management or advisory services to an EU-based or eligible third-country fund manager, that activity alone does not create a permanent establishment in Greece for the foreign firm.
This legal certainty opens the door for multinational investment groups to relocate support functions—including investment research, portfolio management, risk analysis, IT infrastructure, accounting, regulatory compliance, and back-office operations—to Athens. Market participants have long cited prior tax uncertainty as a key deterrent preventing such relocations.
The 5% Tax Regime for Executives
A second pillar of the initiative targets senior professionals themselves: a special 5% flat tax rate applies to high-earning executives—including those receiving carried interest—relocating to Greece to work for these newly established or expanded fund management operations. While no specific fund manager has yet been named or confirmed to be establishing a presence in Athens, officials at the MoNEF believe this framework positions Greece to compete more effectively with major international financial centers.