Published on and written by Cyril Jarnias
Investing in Greece via an SCI: Opportunities and Challenges
Amid a resurgence of interest in the Greek real estate market, investing in Greece through a real estate civil company (SCI) can offer enticing opportunities for investors seeking portfolio diversification and tax optimization.
However, while the charms of the Mediterranean and the lucrative potential are undeniably appealing, it is essential to skillfully navigate the country’s legal and administrative complexities.
Good to know:
The SCI allows for flexible management and easier transfer of assets, but requires a solid understanding of local regulations.
Indeed, while the SCI enables flexible management and easier asset transfer, it is not without certain challenges, such as understanding local regulations and tax implications.
Through this article, we will explore how to make the most of this investment while avoiding potential pitfalls.
Tax Optimization for an SCI in Greece
Greece has implemented several measures to attract foreign investment, particularly in real estate. Key tax incentives include:
- The reduction of corporate income tax to 22% since 2025, a competitive rate within the European Union.
- Specific programs for certain innovative or strategic sectors (R&D, new technologies), with a tax deduction of up to 200% of expenses incurred.
- The possibility of forming a real estate civil company (SCI) or equivalent structure to optimize the management and taxation of real estate assets.
| Tax/Duty | Rate/Terms |
|---|---|
| Corporate Income Tax | 22% on net profit |
| VAT | 24% (standard rate), reduced to 13% and 6% depending on sector |
| Social Security Contributions | Approximately 24.81% of gross salary (for employers) |
| Property Tax (ENFIA) | Variable based on property value |
Rental income from an SCI is subject to a progressive scale:
- Up to €12,000: rate of 15%
- From €12,001 to €35,000: rate of 35%
- Over €35,001: rate of 45%
An automatic deduction for management fees amounts to approximately 5%. Note that a foreign individual directly owning property in Greece cannot deduct actual expenses as in France; however, using a structure like an SCI often allows for greater expense optimization.
The impact of tax treaties is crucial: Greece has signed bilateral agreements with several European countries, including France, to avoid double taxation on rental income or capital gains realized through a Greek SCI held by non-residents.
Comparison between SCI and Direct Ownership:
| Criterion | Direct Ownership | Via Greek SCI |
|---|---|---|
| Actual expense deductibility | No | Yes |
| Rental income tax scale | Progressive | CIT rate then dividends |
| Transfer | Less flexible | Optimized |
Practical Tips for Optimizing and Securing Your Taxes:
- Engage a local accountant proficient in Greek tax law.
- Utilize all legal accounting depreciation mechanisms applicable to professional real estate assets.
- Ensure all local filing obligations are met annually (VAT returns, ENFIA, etc.).
Systematically using specialized local advice not only helps avoid any litigation risk but also allows you to fully benefit from the incentive schemes put in place by the Greek government.
Judicious use of the accounting depreciation regime and optimal exploitation of international tax treaties are two major levers for effectively reducing the overall tax burden related to real estate investments via an SCI in Greece.
Good to know:
In Greece, SCIs can benefit from attractive tax incentives, such as deductions for real estate investments that encourage foreign investment. An SCI’s profits are subject to corporate income tax, currently set at 24%, with additional local taxes and social security contributions. International tax treaties prevent double taxation, a notable advantage for foreign investors. Compared to other legal forms, an SCI can leverage tax structures such as facilitated asset transfer. To optimize taxes, it is wise to collaborate with local experts who understand the nuances of tax depreciation mechanisms. Ensure compliance by utilizing these provisions while maintaining sound administrative management.
Advantages of Buying Real Estate via an SCI in Greece
Buying real estate in Greece through a Real Estate Civil Company (SCI) offers several tax and asset benefits, while providing interesting management flexibility. Here are the main points to remember:
Tax Advantages Related to Buying Real Estate via an SCI in Greece
- Greek tax law applies directly to real estate assets, whether held individually or through a French SCI, without modifying local taxation rules.
- The transfer tax upon acquisition is set at 3.09% of the property’s value.
- New properties benefit from a temporary VAT suspension until January 2025 (normally 24%), which can be an advantage for certain investments.
- Upon resale after more than 5 years, there is no taxation on the capital gain realized in Greece, which constitutes a major tax advantage.
- For foreign owners via a French SCI, rental income is taxable only in Greece but must also be declared in France; however, it is only taxed in Greece according to the bilateral tax treaty.
Reduction of Inheritance Tax and Asset Protection
- Holding assets via an SCI generally allows for better optimization of inheritance taxes compared to individual ownership: shares can be transferred gradually and freely between heirs.
- This structure also protects the personal assets of the partners because only the capital invested in the SCI is at risk vis-à-vis creditors.
Flexibility in Asset Management
- An SCI offers great flexibility in organizing and managing real estate assets: personalized allocation of shares among partners, possibility of including multiple family members or investors.
- It also facilitates collective decisions regarding maintenance or rental operations thanks to adapted bylaws.
Opportunities for Non-Residents
| Aspect | Individual Purchase | Purchase via SCI |
|---|---|---|
| Taxation on income | Taxed locally + declaration | Taxed locally + declaration |
| Inheritance taxes | Direct transfer with duties | Possible optimization via shares |
| Asset protection | Personal assets exposed | Liability limited to capital |
| Collective management | Limited | Facilitated thanks to bylaws |
For non-residents investing via a French SCI owning a Greek property, it should be noted, however, that if the net assets exceed €1.3 million (including foreign assets), they must declare their shares under the French Real Estate Wealth Tax (IFI).
Finally, although certain local structures like the IKE are recommended for Greek citizens with potentially lower local taxes than a foreign company like a French SCI, the latter remains interesting, particularly for its legal flexibility and inheritance advantages.
Summary of the Main Tax and Asset Benefits Related to Property Ownership via an SCI in Greece:
- Direct but favorable application of Greek tax rules
- Temporary suspension or significant reduction of certain taxes (VAT)
- Full exemption on real estate capital gains after 5 years
- Tax optimization at the inheritance level
- Enhanced protection of personal assets against financial risks
This structure is particularly well-suited for effectively managing an international real estate portfolio while benefiting from a stable legal framework that supports its development.
Good to know:
Investing via an SCI in Greece offers several advantages, particularly tax-wise, such as tax relief and a significant reduction in inheritance taxes, making real estate acquisition more advantageous than through individual ownership. The SCI also allows for greater flexibility in asset management, facilitating transfers between heirs while shielding members’ personal assets from seizure risks. For non-residents, the SCI structure opens doors to foreign investments, thanks to favorable regulations that simplify the process and help bypass certain administrative complexities. Additionally, it provides effective asset protection by separating personal assets from invested capital, while offering advantages in estate planning, which is often better legally framed than individual purchases, making these investments more secure in the Greek context.
Pitfalls to Avoid When Investing via an SCI in Greece
Main Pitfalls to Avoid When Investing in Greece via an SCI
- Administrative and Legal Complexities:
- A lawyer’s involvement is mandatory for any real estate acquisition in Greece, with capped fees that must be anticipated in the budget.
- Administrative procedures can be longer and more complex than in France, with documents often written only in Greek.
- There is a risk of non-compliance with building permits or cadastral irregularities. It is crucial to verify the property’s conformity with local authorities before purchase.
- Tax Differences:
- The Greek tax regime differs significantly from the French regime: certain specific taxes apply (annual property tax, taxation on rental income according to local legislation).
- Bilateral tax treaties may limit certain advantages or create double taxation if not applied correctly.
- Exchange Rate Risk:
- Although Greece is in the eurozone, the risk related to general economic fluctuations within the European Union must be considered.
- Economic stability remains fragile despite recent improvements.
- Specificities of the Greek Real Estate Market:
- Certain regions impose restrictions on purchases by foreigners, particularly in border or strategic island areas.
- The real estate market can lack transparency and has a history of post-financial crisis instability; increased vigilance is needed when evaluating properties.
- Managing an SCI Abroad:
| Difficulty | Possible Consequence | Recommended Solution |
|---|---|---|
| Language barrier | Poor legal understanding | Use a sworn translator |
| Cultural complexity | Misunderstandings in negotiations | Rely on a local expert |
| Administrative management | Delays or filing errors | Outsource to a specialized manager |
Practical Tips to Anticipate These Pitfalls:
- Systematically engage an experienced local lawyer from the start of the project
- Verify all land titles and permits with the relevant Greek authorities
- Use the services of a bilingual notary if possible
- Consult specialized organizations (CCI France-Greece, chambers of commerce)
Useful Resources:
- Lawyers specializing in international real estate law
- French-speaking notaries based in Greece
- Franco-Greek chambers of commerce
Key takeaway: Anticipating each administrative step by systematically using local professionals not only helps avoid disputes and unpleasant surprises but also allows for tax optimization of your investment.
Good to know:
When investing in Greece through a real estate civil company (SCI), it is crucial to prepare for the country’s administrative and legal complexities, particularly due to tax rules that can differ significantly from other jurisdictions. The Greek real estate market has specific characteristics, such as local restrictions on certain transactions or unpredictable fluctuations due to exchange rate risk. Complications related to the remote management of an SCI in Greece also include language and cultural barriers that can impact management and returns. To circumvent these pitfalls, it is advisable to consult local experts and use translation services to avoid confusion in document preparation. Finally, regularly informing yourself about legal and tax specifics through reliable sources or seminars can greatly reduce the risks associated with this investment.
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Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
