Greece wants to use its solid track record in combating the coronavirus as a way to help entice people to move to the country — and it’s promising that half of their income will be tax-free.
“Technology means we can now choose where we live and work,” Alex Patelis, chief economic adviser to Prime Minister Kyriakos Mitsotakis, said in comments to Bloomberg. Greece “can now offer tax incentives as well as the sun,” he said.
Greece won international praise for the way it handled the pandemic last spring. The country has put in place a second lockdown in an attempt to stop the most recent spread of the virus.
Mitsotakis’s center-right government is trying to lure investment back to the country following more than four years of less business-friendly governments from the left.
Bringing in foreigners and reversing the country’s brain drain are seen as keys to turning around the country’s performance in the wake of a decade-long debt crisis that cost some 25% of economic output.
Greece faces a further 9% decline in gross domestic product in 2020 due to the pandemic, according to the European Commission. Unemployment is expected to reach around 18%, significantly lower than the 30% levels seen at the peak of the crisis, but still one of the highest readings in Europe.
Microsoft Corp. and Volkswagen AG have both announced plans to invest in Greece, but the country needs much more help if it hopes to counter a debt-plus-pandemic crisis. Moody’s Investors Service upgraded the country’s sovereign credit rating last week, citing high growth potential.
With the new incentive plan, the Greek government is also focusing on the U.K. and employees or the self-employed who may need to leave due to Brexit.
Greece currently applies a tax rate of 44% for earnings over 40,000 euros ($47,000). The new incentives will apply for a maximum of seven years to workers who want to move their tax base to Greece, regardless of nationality and job type, though it will only apply to new positions created in Greece in 2021. The offer will also be available to Greeks living abroad if they return.
Greece already has a program to attract wealthy investors through a flat tax rate for those who qualify and are willing to shift residence. The country also has a reduced rate for foreign pensioners.