The Three “S” that May Make the Difference for Greece
By Epameinondas Stylopoulos, Attorney-at-Law, LL.M., ACIArb, Managing Partner
* This article has been published to Business Partners, the magazine of the American-Hellenic Chamber of Commerce (June 2015)
One of the most important key factors that determine the decision of an entrepreneur to invest in a given territory is the local tax regime. Low tax rates are not the only criterion for international investors; they prefer countries that have a specific, simple and stable tax system. Those preconditions offer to the potential investor the assurance that the host country will honor his willingness to invest there.
Unfortunately, Greece may not fulfill these requirements due to the local tax regime, which is not specific, simple and stable. The fact that the tax laws are changing every year, that they are being implemented only after Ministerial Decrees have been issued, and nobody is in the position to predict the actual tax rate payable at the end of every year, are simple examples of the uncertainty that an investor has to overcome before his ‘trip’ to our country.
Throughout the last years all national Governments have tried to attract foreign investors in various ways; for instance, by providing them special tax incentives and the possibility to receive special services from Enterprise Greece, which is the official agency of the Greek State to promote investments in Greece and exports from Greece. However, these initiatives have not been successful, given that they have been hardly followed by local and international entrepreneurs. Most of them received the advice from their counsels that despite those incentives the local tax system is unspecific, complicated and unstable, and consequently unpredictable. Therefore, those investors decided to avoid investing in Greece.
In sum, Greece should adopt a predictable tax regime, in order to attract investors, because these investors also know that they have to overcome other key factors that may affect their choices, such as bureaucracy, corruption and aged civil servants. Then, we will be thrilled to inform our mailing list, in order for them to start packing…