After efforts to induce investors and pensioners to move their tax base to Greece, the government is preparing a third round of incentives to attract the wealthy. It involves family offices.
Behind the deceptively “humble” title, family offices – private companies that handle a family's wealth management – can have hundreds of millions, even billions, in assets.
The super-wealthy – and international practice says that to have a family office, a family must be worth at least a $100 million, although some say $30 million is enough – have needs that almost certainly exceed the capacity of a single accountant. Hence the family offices.
Greek laws do not account for family offices, but the government is preparing a plan that would provide incentives for such companies to relocate to Greece, while also ensuring transparency in operations, officials say.
The same officials say that the law governing shipping companies could provide a blueprint for family offices. But the two kinds of companies are different: Family offices manage the entire gamut of family affairs, from investments to philanthropy to taxation to the payroll of individuals in the family’s service. An important official in these companies is the “estate planner,” charged with the transfer of wealth to the next generation.
To attract family offices, they must be able to deduct expenses, something Finance Ministry officials say is preferable to shifting all their wealth to offshore companies. The reason is not only the taxes that will accrue to the state, but also parallel activities that will help boost the Greek economy. Greek law firms will be able to do business with the family offices.
Government officials explain that, by attracting investors, pensioners and the wealthy on favorable terms, they are not so much betting on the 7% tax these people will pay as on the spending they will do that will benefit the local economy.
Non-domestic residents, the first category targeted by the government, are already trickling in. In the first six months since the law was voted in December, 21 people have applied, with 18 applications approved. The deadline would have been March 31 but was extended due to the pandemic. The applicants are from the US, the UK, China and other countries.
Non-domestic residents are by law to invest at least half a million euros in Greece.