The most significant amendments to the regime of Family Offices include the following:
Expansion of scope to non-Greek tax residents
The scope of Family Offices’ regime expands so that it includes individuals who are foreign tax residents. As result, Family Offices established in Greece are no longer limited to managing the wealth and financial flows of Greek tax residents.
Safeguard from corporate tax residency rules
Under the proposed provisions, an addition has been made so that the tax residence of foreign family – owned entities may not be challenged. Specifically, it is confirmed that the supply of services by the Family Office to foreign entities owned, directly or indirectly, by the individuals or their family members does not entail that such entities are effectively managed from Greece. As a result, such entities are not at risk of being seen as Greek tax residents on these grounds. This provision is quite interesting for entrepreneurs owning shares of foreign entities and therefore the supply of services from the Family Office will not attract tax residency.
Advisory services related to Trusts
The services rendered by Family Offices are broadened so that advisory services related to Trusts are also included. Specifically, the new provisions allow Family Offices to render advisory services to trustees of trusts in which the individuals, or their family members, are settlors or beneficiaries.
Reduction of minimum operating expenses to EUR 250,000
Under the current regime, Family Offices are required to employ at least 5 persons in Greece within 12 months from incorporation and have annual operating expenses in the country of at least EUR 1,000,000. The proposed provisions reduce the minimum amount of annual operating expenses to EUR 250,000 whereas the first requirement remains as is. Thus, the regime is addressed in a broader base of HNWI.
Broader definition of “Family Members”
The definition of “Family Members” who are under the scope of the regime is broaden and current limitations as regards marital status or custody conditions are eliminated.
As regards the “Non-Dom” Alternative Tax Regime, the improvements are the following:
Expansion to family members via a subsequent request
Under the regime as it currently is, foreign investors who wish to opt for the “non-dom” regime may, upon filing their request, ask for expansion of the benefits to their family members, provided that an additional payment of personal income tax of EUR 20,000 tax is paid per individual. The new provisions propose that the family members are allowed to join the alternative regime at any time during its 15 year duration and not only upon the initial request.
Exemption from donation and inheritance tax
The proposed provisions stipulate that the transfer, by way of a gift or because of death, of any movable assets situated outside Greece is exempted from donation or inheritance tax, respectively, in the country: the exemption applies to both assets transferred to the investor and assets transferred by the investor to third parties. In practice this means, that the exemption from gift tax and inheritance tax is extended to the donees and the heirs of the Non-Dom residents.
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