Relocating Your Business to Greece: Incentives and Challenges for Entrepreneurs

Reading time: 15 minutes

Table of Contents

• Introduction
• Economic Landscape in Greece
• Business Incentives for Relocation
• Challenges of Doing Business in Greece
• Legal and Regulatory Framework
• Tax Considerations
• Labor Market and Human Resources
• Infrastructure and Technology
• Cultural Factors and Business Etiquette
• Success Stories: Businesses Thriving in Greece
• Future Outlook for Greece’s Business Environment
• Conclusion
• FAQs

Introduction

Greece, with its rich history, stunning landscapes, and strategic location at the crossroads of Europe, Asia, and Africa, has been increasingly attracting international businesses and entrepreneurs. The country’s efforts to recover from its economic crisis have led to a series of reforms and incentives aimed at fostering a more business-friendly environment. This comprehensive guide explores the opportunities and challenges of relocating your business to Greece, providing insights into the economic landscape, legal framework, and cultural nuances that shape the Greek business world.

Economic Landscape in Greece

To understand the potential of relocating your business to Greece, it’s crucial to examine the current economic climate and its trajectory.

Recent Economic Performance

Greece has shown remarkable resilience in recent years, rebounding from a severe economic crisis. The country’s GDP growth has been positive since 2017, with projections indicating continued expansion. This economic revival is attributed to structural reforms, increased foreign investment, and a revitalized tourism sector.

Key Economic Indicators

Let’s take a closer look at some critical economic metrics:

• GDP Growth: Projected at 2.1% for 2023, up from 1.8% in 2022
• Unemployment Rate: Steadily declining, reaching 11.6% in 2022, down from a peak of 27.5% in 2013
• Inflation Rate: 9.3% in 2022, expected to moderate in 2023
• Foreign Direct Investment: Increased by 72% in 2021 compared to 2020

These indicators paint a picture of an economy on the upswing, offering potential opportunities for businesses looking to expand or relocate.

Business Incentives for Relocation

The Greek government has implemented various incentives to attract foreign businesses and investment. These initiatives aim to streamline bureaucratic processes and provide financial benefits to companies relocating to Greece.

Investment Law and Tax Incentives

The New Investment Law (4887/2022) offers a range of incentives, including:

• Tax exemptions of up to 100% of the investment amount
• Cash grants covering a significant portion of eligible expenses
• Leasing subsidies for new equipment
• Wage subsidies for new jobs created

Additionally, the government has introduced a competitive corporate tax rate of 22%, with further reductions planned.

Special Economic Zones

Greece has established Special Economic Zones (SEZs) in various regions, offering benefits such as:

• Simplified licensing procedures
• Reduced bureaucracy
• Custom duty exemptions
• Infrastructure support

These zones are particularly attractive for manufacturing and logistics companies.

Golden Visa Program

For entrepreneurs and investors looking to gain residency in Greece, the greece golden visa program offers a pathway to residency through property investment or other qualifying investments. This program has been a significant driver of foreign investment in the Greek real estate market.

Challenges of Doing Business in Greece

While Greece offers numerous incentives, it’s essential to be aware of the challenges that businesses may face when relocating.

Bureaucracy and Red Tape

Despite recent improvements, Greece still struggles with bureaucratic inefficiencies. Processes for business registration, licensing, and permits can be time-consuming and complex. However, the government has made strides in digitizing many procedures, which is gradually improving the situation.

Economic Stability Concerns

Although Greece has made significant progress, concerns about long-term economic stability persist. The country’s high public debt and potential external economic shocks remain risk factors that businesses should consider.

Market Size and Competition

With a population of about 10.7 million, Greece’s domestic market is relatively small compared to other European countries. Businesses may need to consider export strategies or regional expansion to achieve significant growth.

Legal and Regulatory Framework

Understanding the legal landscape is crucial for any business looking to relocate to Greece.

Business Structures

Greece offers several business structures for foreign companies, including:

• Private Company (IKE)
• Limited Liability Company (EPE)
• Société Anonyme (AE)
• Branch or Representative Office

Each structure has its own requirements, advantages, and tax implications. It’s advisable to consult with legal experts to determine the most suitable option for your business.

Intellectual Property Protection

Greece is a member of the World Intellectual Property Organization (WIPO) and adheres to EU regulations on intellectual property rights. The country has made significant progress in strengthening its IP protection framework, which is crucial for businesses in innovative sectors.

Tax Considerations

The Greek tax system has undergone significant reforms to become more competitive and transparent.

Corporate Taxation

Key aspects of corporate taxation in Greece include:

• Corporate Income Tax: 22% flat rate
• Dividend Withholding Tax: 5%
• Value Added Tax (VAT): Standard rate of 24%, with reduced rates for certain goods and services
• Social Security Contributions: Employers contribute approximately 24.81% of the employee’s gross salary

Tax Incentives for Research and Development

Greece offers attractive tax incentives for R&D activities, including:

• Super deduction of 200% for R&D expenses
• Patent box regime with a reduced tax rate of 10% on income derived from patented products

Labor Market and Human Resources

Greece’s labor market has evolved significantly in recent years, offering both opportunities and challenges for businesses.

Skilled Workforce

Greece boasts a well-educated workforce, with a high proportion of university graduates, particularly in fields such as engineering, technology, and sciences. The country’s education system produces a steady stream of skilled professionals, many of whom are multilingual.

Labor Costs and Regulations

While labor costs in Greece are generally lower than in many Western European countries, it’s important to note that labor laws are relatively protective of employees. Key considerations include:

• Minimum wage: €713 per month (as of 2023)
• Standard working week: 40 hours
• Mandatory 14th-month salary payments
• Strong unions in certain sectors

Employers should familiarize themselves with Greek labor laws to ensure compliance and foster positive employee relations.

Infrastructure and Technology

Greece has been investing heavily in its infrastructure and technology sectors, aiming to position itself as a regional hub for business and innovation.

Transportation and Logistics

Greece’s strategic location makes it an attractive base for businesses looking to access European, Middle Eastern, and North African markets. Key infrastructure developments include:

• Modernization of major ports, including Piraeus, which has become one of the largest container ports in the Mediterranean
• Expansion and upgrading of the national road network
• Improvements to rail infrastructure, connecting major cities and industrial areas

Digital Infrastructure

The country has made significant strides in improving its digital infrastructure:

• Expanding 5G network coverage
• Increasing fiber optic broadband penetration
• Developing smart city initiatives in major urban centers

These improvements are creating new opportunities for tech-driven businesses and startups.

Cultural Factors and Business Etiquette

Understanding Greek business culture is crucial for successful integration and relationship-building.

Relationship-Oriented Business Culture

Greek business culture places a strong emphasis on personal relationships. Key aspects include:

• Face-to-face meetings are highly valued
• Building trust through personal connections is crucial
• Business lunches and dinners are common for relationship-building

Communication Style

Greek communication in business settings tends to be:

• Expressive and animated
• Direct, but with an emphasis on politeness
• Often involves gestures and physical contact (handshakes, pats on the back)

Understanding these nuances can help foreign businesses navigate the Greek business environment more effectively.

Success Stories: Businesses Thriving in Greece

Several international companies have successfully established or expanded their operations in Greece, demonstrating the country’s potential as a business destination.

Case Study: Tech Innovation

A notable success story is the establishment of Microsoft’s first data center region in Greece. This $1 billion investment not only creates jobs but also positions Greece as an emerging tech hub in southeastern Europe.

Case Study: Renewable Energy

Companies like Enel Green Power have made significant investments in Greece’s renewable energy sector, capitalizing on the country’s abundant solar and wind resources and supportive government policies.

Future Outlook for Greece’s Business Environment

As Greece continues its economic recovery and reform efforts, the outlook for its business environment remains positive.

Emerging Sectors

Several sectors show particular promise for future growth and investment:

• Tourism and hospitality, with a focus on sustainable and experiential travel
• Technology and digital services, including fintech and e-commerce
• Renewable energy and green technologies
• Agri-food and gourmet products

Continued Reforms

The Greek government has committed to ongoing reforms aimed at improving the business environment, including:

• Further digitization of public services
• Streamlining of investment procedures
• Enhancements to the education system to better align with industry needs

These efforts are expected to continue making Greece an increasingly attractive destination for international businesses.

Conclusion

Relocating your business to Greece presents a unique blend of opportunities and challenges. The country’s strategic location, improving economic indicators, and government incentives make it an attractive destination for entrepreneurs and established businesses alike. However, potential challenges such as bureaucracy and a complex regulatory environment require careful navigation.

By leveraging Greece’s skilled workforce, investing in emerging sectors, and adapting to the local business culture, companies can position themselves for success in this dynamic market. As Greece continues its journey of economic reform and modernization, it offers a promising landscape for businesses looking to expand their European presence or tap into new markets in the Mediterranean and beyond.

Ultimately, the decision to relocate to Greece should be based on thorough research, careful planning, and a clear understanding of how the move aligns with your business objectives. With the right approach and preparation, Greece can offer a fertile ground for business growth and innovation in the heart of the Mediterranean.

FAQs

1. Q: What are the main advantages of relocating a business to Greece?

   A: The main advantages include strategic geographic location, attractive investment incentives, a well-educated workforce, improving infrastructure, and access to EU markets. Additionally, the greece golden visa program offers residency options for qualifying investors.

2. Q: How long does it typically take to set up a business in Greece?

   A: The time frame can vary depending on the type of business and specific requirements. With recent reforms, it’s possible to set up a basic company structure in as little as 1-2 weeks. However, more complex setups or those requiring special licenses may take several months.

3. Q: Are there any restrictions on foreign ownership of businesses in Greece?

   A: Generally, there are no significant restrictions on foreign ownership of businesses in Greece. However, certain strategic sectors (e.g., defense, media) may have specific regulations or require additional approvals.

4. Q: What support is available for startups and innovation in Greece?

   A: Greece offers various support mechanisms for startups, including incubators, accelerators, and funding programs. The EquiFund initiative, backed by EU funds, provides equity financing for innovative startups and SMEs. Additionally, there are tax incentives for R&D activities.

5. Q: How does the cost of doing business in Greece compare to other EU countries?

   A: While costs can vary by sector and location, Greece generally offers competitive operational costs compared to many Western European countries. Labor costs, real estate, and certain taxes are often lower. However, energy costs and some bureaucratic expenses may be higher. It’s essential to conduct a detailed cost analysis specific to your business model and sector.

Article reviewed by Michelle Hope, Real Estate and Investment Expert, on March 14, 2025