Knight Frank sees seven drivers of investment in Greece
Picturesque views aside, Greece’s economic landscape only adds to the country’s appeal. To celebrate the opening of Knight Frank's commercial office in Greece, it explored seven drivers of investment in the country:
Located in Southeast Europe, Greece comprises thousands of islands across the Aegean and Ionian seas. With its ancient roots, the country is often referred to as the ‘birthplace of democracy’ – in the 6th century BC, when a new law was proposed in Athens, all citizens had the right to vote on it. The word ‘democracy’ also derives from the Greek words for people (demos) and rule (kratos).
Sunsets and panoramic views aside, Greece’s strong economic outlook and its initiatives designed to incentivise economic activity are likely to entice more than just holidaymakers.
We’re proud to have recently opened a dedicated commercial office in Greece’s capital, Athens. To celebrate its launch, we explore seven drivers of investment in Greece.
Seven drivers of investment in Greece
A robust economic outlook
According to The European Commission, Greece’s economy is forecast to grow +6.0% in 2022 – which could see the country outpace the Euro area’s forecast of +4.5%.
A strategic location
Beyond being a renowned destination in its own right, Greece also benefits from a strategic location, connecting investors, tourists and residents to the rest of the world. It sits at the crossroad of Africa, Asia and Europe, with all countries in the latter continent a maximum of three hours away.
Greece also offers direct flights to major cities such as London, New York, Dubai, Moscow, Beijing, Shanghai, Singapore and more, paving the way for global business, and allowing investors to easily visit the country from multiple corners of the world.
A member of Schengen, the EU, NATO and the WTO
Greece is a member of Schengen – the world’s largest visa-free zone. Comprising 26 European countries, all members have abolished their internal borders for the free and unrestricted movement of people. Greek residents can travel freely within the zone, and they also have the ability to live in another Schengen country for up to three months every six-month period.
Greece is also a member of the EU, allowing it to benefit from EU infrastructure projects and funding. In addition, Greece is also a part of the WTO (World Trade Organisation). Meanwhile, its NATO membership safeguards the country, and allows it to contribute to international peace and security.
Attractive visa opportunities
Greece’s residence-by-investment visa, named the Greece Golden Visa Programme, is one of the most attractive residency programmes in Europe. It requires a €250k investment in property to be eligible, which is half of the investment required in countries such as Spain and Portugal (both of which require €500k). The programme offers investors and their immediate family members an instant five-year residency with no minimum stay requirements, alongside free travel around the Schengen Zone.
The privilege can be renewed indefinitely, and once participants have been a resident for seven years in Greece, they can apply for citizenship, which entitles you to all the benefits of living within the European Union.
Initiatives to incentivise economic activity
Greece has implemented a series of initiatives to incentivise economic activity. Firstly, a VAT suspension on the transfer of newly built property until 31 December 2022. This is in order to encourage real estate construction and support the property market.
Secondly, a reduction of Corporate Income Tax from 24% to 22%. Thirdly, a three-year suspension of Capital Gains Tax (15%), applicable to individuals in case of a property sale transaction until 31 December 2022.
And finally, the introduction of a variety of new regimes of alternative taxation for individuals who transfer their tax residence to Greece.
In order to qualify for these regimes, certain conditions must be met, and professional tax advice must be sought to ensure that one qualifies for either the special tax regime or the new regime.
Promising house price growth
According to our Global House Price Index, which tracks the movement of mainstream residential prices across over 55 countries, house prices in Greece have recorded an annual growth of 3.1% in the year to March 2021, putting the country above Italy and Spain. Though our new office in Greece is exclusively dedicated to helping commercial investors, these residential results tell a promising story.
An established tourism sector
A mere glance at Greece’s beautiful towns, beaches and mountains is enough to understand why the country is such a magnet for tourists. With a plethora of options to suit every trip, from ancient Greek history through to its famously fresh and healthy Mediterranean cuisine, tourism is one of the most important pillars of the country’s economy – accounting for a fifth of it.
And despite the Covid-19 pandemic, Reuters reported in June that Greece’s Prime Minister Kyriakos Mitsotakis was “cautiously optimistic” the country would meet its 2021 tourism revenue target.