Legal Business Blogs

Sponsored briefing: Doing business in Greece

Theodore Pistiolis, managing partner of Andersen Legal in Greece, examines the benefits of doing business in the Greek market

A sea of opportunities

During the last years and despite adversities, Greece became an investment destination for local and foreign capitals. The perception of Greece as an investment destination is strong, and the country built trust and optimism about its prospects. Greece’s economy recorded solid growth in the first half of 2022, but rising inflation took its toll on growth in the year’s second half. However, the RRF program (Recover and Resilience Facility loans) supported the economy. Government measures cushioned the impact of energy prices on businesses’ input costs and households’ real disposable incomes.

Greece’s economic snapshot

The timely and effective implementation of the Recovery and Resilience Plan (RRP), well known as Greece 2.0, is projected to remain the main driver of investment growth, partly offsetting weakening corporate investment due to tightening financing conditions. With the external environment slowly improving as of the second half of 2023, exports are set to pick up pace in 2024. Receipts from international tourism are forecast to increase in 2023 and 2024. Real GDP is forecast to grow by 1.2% in 2023 and rise to 2.2% in 2024.

Government support measures, reviving tourism and other exports, and improving consumer and investor confidence supported a rebound in demand, returning GDP to its pre-Covid crisis level.

These factors and the end of short-time work schemes contributed to solid jobs growth and reduced the unemployment rate to a 12-year low.

Overall, real GDP is forecast to grow by 2.2% in 2024.

Indicators 2022 2023 2024
GDP growth 5.5% 1.2% 2.2%
Inflation 9.3% 4.5% 2.4%

Source: European Commission, Economic forecast for Greece

Foreign investments

Net inflows of foreign direct investment (FDI) to Greece in 2022, according to the latest available data from the Bank of Greece, exceeded €7.2bn (€7,221m), compared to €5.3bn (€5,350m) in 2021.

The increase represents a 35% jump year-on-year, a 61% increase compared to pre-Covid 2019, and is the highest new FDI inflow since 2002. The sharp increase in FDI reflects efforts in recent years to establish a business-friendly environment and a co-ordinated strategy for sustainable growth. The result is evident in the overall growth of the Greek economy and confidence among foreign investors in the future growth of Greece.

Wages are also rising after 12 years of little growth. The minimum wage increased by nearly 10% in the first half of 2022 and another 9.4% at the beginning of 2023, while those with in-demand skills, such as in ICT, are experiencing more substantial wage growth.

Bank lending to businesses has increased, a step towards financing the renewal of the private capital stock. Banks’ health is improving.

Public debt has declined relative to GDP. Its long maturity structure and interest rates fixed at low rates limit the immediate exposure to rising market rates. Greece’s ambitious RRP includes many reforms and investments to improve the public sector’s performance and sustain growth. Recent tax cuts have reduced the large labour income tax wedge. Coverage has broadened for consumption and recurrent property taxes, while some rates have been cut. Income tax and social contribution rates are being cut; corporate tax has been reduced to 22%. Many targeted reliefs across different taxes have also been introduced to support specific policy goals. Furthermore, some of Greece’s tax rates, such as those on distributed corporate profits, are now relatively low (ie, 5%).

The question is, in which sector should someone look for investment opportunities in Greece?

Greek audiovisual productions. Offering one of the oldest cinematic traditions in the world, Greece is, for several reasons, a film-friendly destination. Greece is, for more than one reason, an ideal destination for an audiovisual production project:

  • Generous investment incentives via Greece’s investment law, competitive cash rebate, tax relief scheme, the forthcoming European Structural Funds and the Greek Development Bank
  • Streamlined licensing procedure
  • Experienced professionals and state-of-the-art facilities
  • Production value at a competitive cost
  • Incomparable natural and architectural set

Greek energy sector. The unique availability of renewable energy potential (wind, hydro, biomass, geothermal, solar and solar thermal) combined with ongoing large-scale infrastructure projects involving Greece (TAP-IGB-EastMed Gas Pipelines, EuroAsia Interconnector, hydrocarbons exploration, and development) show that Greece will be a key player in the formulation of the EU energy mix and will provide significant investment opportunities in all energy industries. The reasons that make Greece an attractive destination in the energy sector are:

  • Strategic position in the transportation of energy from East to West
  • Generation potential –Greece enjoys more than 250 days of sunshine – or 3,000 hours of sun – a year and has a strong wind capacity
  • Government support and legislation – the Ministries of Environment and Energy and Development and Investments have spearheaded several major investment projects over the past years

Greek tourism sector. With more than 16,000km of coastline, more than 6,000 islands and islets, and a well-established tourism industry, Greece presents a prime investment opportunity in the tourism sector. The country is one of the top global tourism destinations. The competitive advantages of Greece, such as its rich cultural heritage, natural beauty, and geographical variety, have attracted significant tourism investments in recent years, thus further strengthening Greece’s image as an ideal destination for holidays and tourism-related investments. Privatisation of several key state-owned tourist and transport assets (marinas, regional airports, tourist properties, etc) by the Hellenic Republic Asset Development Fund; the funding and tax incentives for such new developments aid the development of premium tourist resorts and properties; the development of specialised tourist products and facilities focused on specific themes, categories, markets or segments are some key factors that indicate Greece as a destination for investment in this specific sector.

ICT sector. The information and communications technology (ICT) sector is one of the most promising in the Greek economy, driven mostly by the demand for automation and digitalisation in the Greek public and private sectors. The ICT sector in Greece offers several opportunities for investment in high-end, value-added services with a global reach, leveraging the availability of skilled labour, the existing know-how and research capabilities, the strong IT and telecoms infrastructure, and the outstanding living and working conditions. During the last few years, Greece became the centre of several important investment initiatives announced by some of the largest companies in the global ICT industry, such as Microsoft, Amazon Web Services, Nokia-Siemens, Oracle ZTE, Samsung, Huawei, SAP, Unisoft, and others.

The Greek startup ecosystem was brought into the spotlight during the financial crisis, and it keeps growing ever since. In recent years, the Greek startup scene saw a consolidation stage with new successes and much balancing out. Greece is home to many aspiring entrepreneurs working on promising new ideas and innovative business models. Recently, foreign investment funds have invested in three or more Greek startups: Intel Capital, Index Ventures, Accel, Andreessen Horowitz, Kleiner Perkins, Sequoia, Bain Capital, DFJ Greycroft. Greek startups have been acquired by major companies in the industry, such as: Microsoft, Apple, Splunk, Amazon, Samsung, Teradata, Daimler, Citrix, VMware, DellEMC, and Salesforce.

The reasons that make Greece an attractive destination in the ICT sector are:

  • Skilled workforce
  • Attractive funding opportunities both from public sources, such as EU structural funds and PPP initiatives and from private sources.
  • ICT infrastructure – Greece can cover all infrastructure needs for a major investment
  • Research and education – Greece possesses an extensive network of science and technology parks and higher education centres.
  • Favourable location – Greece is the EU country with the best access to leading Asian ICT markets

Logistics sector. Greece stands on the crossroad of three continents (Europe, Asia, and Africa), connecting, since early antiquity, people, goods, and cultures. Therefore, Greece has long been a strategic node for transportation in the greater region. Greek ports are strategically located and can be transformed into regional logistics hubs for goods traveling from Asia to the European Community. Several reasons make an investment in the Greek logistics sector interesting, driven mostly by the following:

  • Competitive freight costs
  • Transport infrastructure
  • Advantageous location
  • World champion shipping sector
  • Efficient global logistics providers
  • Several global 3PL providers currently operating in Greece

Real estate sector. Greek house prices continue to rise strongly amid increasing demand from foreign buyers and continued economic growth in the country. In Greece’s urban areas, house prices rose strongly by 11.32% during the year to Q3 2022, following year-on-year increases of 10.26% in Q2 2022, 10.35% in Q1 2022, 10.81% in Q4 2021 and 9.4% in Q3 2021, according to the Bank of Greece. It was its best performance since Q4 2006.

Demand from foreign homebuyers is rising strongly. In the first three quarters of 2022, the total value of real estate purchases by foreign buyers, which accounts for 80% to 85% of all real estate purchases in Greece, soared by 60.2% to €1.28bn, based on central bank figures. For 2022, foreign buyers’ property purchases are expected to reach €1.7bn, surpassing the €1.45bn recorded before the Covid-19 pandemic.

Foreign investors have been attracted to Greece, mainly due to the Golden Visa Program, which offers residency to non-EU investors purchasing or renting property worth over €250,000. In addition, the tourism boom in the Athens real estate market, an end to the local tourism boom, is not in sight. Athens is the city in Europe with the second-fastest growth rate in the number of tourists!

According to the Airbnb data portal AirDNA, the number of bookings in Athens on the home-sharing platform has increased by 66% per year since 2010 and thus grew more strongly than in other major European destinations such as Paris (30%), Barcelona (40%) or Berlin (40%). Without a doubt, short-term rentals in Greece’s capital city require more effort than the classic long-term rental. However, owners can benefit from the continued tourist demand.

Sources: Bank of Greece, Hellenic Statistical Authority (ELSTAT), European Commission – Economic forecast for Greece, Enterprise Greece – Invest in Greece, OECD – Greece Economic Snapshot

For more information, please contact:

Theodore Pistiolis
Managing partner, Andersen Legal in Greece

Andersen Legal in Greece,
103, Vasilissis Sofias Avenue
11521, Athens, Greece
T: +30 210 3626971