How Greece is wooing hedge funds

Greece is making efforts to attract hedge funds and their executives with a new tax regime, aiming to compete with financial centers like London, Switzerland, and Dubai, according to the Financial Times. In June, Greece introduced targeted incentives, offering qualifying private equity and hedge fund executives a 5% tax rate on bonuses and carried interest, compared to the standard 15%.

This initiative gained significant attention when billionaire hedge fund manager Chris Rokos moved his tax residency from the UK to Greece. Greek finance minister Kyriakos Pierrakakis met with Rokos before the announcement. Athens hopes this move will establish the country as a credible destination for international asset managers, following years marred by sovereign debt crises and capital controls.

Vasilis Karatzas, an adviser to Pierrakakis, noted that Greek officials have discussed establishing operations with several hedge funds. The incentives require a Greek operation to spend at least €3m annually. Rokos Capital Management plans to establish a small presence in Athens, potentially employing around 50 people. Greece already offers a preferential tax regime for wealthy individuals and has a "5C" regime for foreign executives, exempting 50% of qualifying employment income for seven years.

Currently, Greece has fewer than a dozen licensed hedge fund managers, most of which have focused on Greek assets. The arrival of international firms could significantly change this landscape, bringing managers overseeing global portfolios to the country for the first time.