Greece is a country in Southeast Europe, with a population of about 10.7 million people. Greece is known for its rich history, culture, and natural beauty, as well as its membership in the European Union (EU) and the eurozone. The country is also known for its economic crisis, which began in 2009 and lasted for a decade, resulting in a severe recession, a debt crisis, and a bailout program.
However, after years of hardship and austerity, Greece is finally seeing signs of economic recovery and growth. One of the key drivers of this recovery is foreign investment, which plays a significant role in boosting Greece’s economic activity and business opportunities. In this article, we will examine the challenges and opportunities for foreign investment in Greece, and how the country is working to overcome the former and seize the latter.
Why Invest in Greece?
Greece has been working to attract new foreign investment and has been successful in doing so. According to the Bank of Greece, the net inflow of foreign direct investment (FDI) in Greece reached €4.8 billion in 2020, an increase of 75% compared to 2019. The investment projects of the last two years represent 24% of total FDI over the last 22 years. There is also a clear shift towards investments with higher added value, and an emphasis on sectors of the economy where Greece has a significant comparative advantage, such as agri-food, transport and logistics, energy, tourism, and technology.
There are several reasons why Greece is a popular destination for international investors, such as:
- Stable Political Climate
- Abundant Natural Resources
- Strategic Position
- Expanding Consumer Market
- Attractive Business Incentives
Despite its progress and potential, Greece still faces a number of challenges for foreign investors, such as:
- Complex Bureaucracy
- High Taxes
- Lack of TransparencyHow is Greece Improving its Investment Climate?
The Greek government has taken steps to make the country more attractive to foreign investors, such as:
- Reducing Red Tape: The government has launched a series of initiatives to simplify and streamline the administrative procedures and regulations for foreign investors.
- Offering Tax Breaks: The government has introduced a number of tax incentives for foreign investors, such as reducing the corporate tax rate from 28% to 24%, lowering the dividend tax rate from 10% to 5%, and exempting foreign pensioners from income tax for 10 years if they relocate to Greece.
- Implementing the Recovery and Resilience Plan (RRP): The government has submitted its RRP to the EU, which outlines its vision and strategy for the post-pandemic recovery and transformation of the country. The RRP is a €32 billion package of reforms and investments, funded by the EU’s Next Generation EU program, aimed at boosting Greece’s competitiveness, productivity, and sustainability.
Greece is a country with a lot of potential for foreign investors. However, there are also a number of challenges that need to be addressed. If the Greek government can continue to implement reforms and make the country more attractive to foreign investors, then Greece has the potential to be a successful investment destination.
