GREECE Law and Practice Contributed by: Ioannis Charalampopoulos, Petros Machas and Alexandros Saratsiotis, Machas & Partners
tributions originate from dividends or profits that have already been taxed at the level of domestic corpora - tions. Finally, REICs have gained significant popularity over the past years due to their special tax treatment, as outlined below. • REICs are subject to a special corporate tax cal - culated at a rate equal to 10% of the interest rate provided by the European Central Bank for main refinancing operations, increased by one percent - age point, imposed on the average of the fair market value of their investments, including cash items. The special tax exhausts the obligations of the company for income tax in respect of its income from the investment real estate properties. • No dividend withholding tax is imposed on divi - dends distributed by REICs. Nonetheless, REICs are required to pay a minimum annual dividend equal to 50% of their annual net profits, exclud - ing those related to capital gains from the sale of real estate, unless otherwise agreed upon by the general meeting of shareholders with an increased majority of 80%. • REICs are exempt from the real estate transfer tax upon the purchase of real estate (3.09% of the In principle, the legal framework governing lending activities in Greece is strict, and alternative investment funds are generally not permitted to originate loans unless expressly allowed by law. Regarding VCMF, the management company may be authorised to enter into loan agreements and provide guarantees in the name and on behalf of VCMF. However, this provision is interpreted narrowly, referring specifically to bor - rowings and guarantees related to the fund’s invest - ment activities. Nonetheless, in practice, the vast majority of VCMFs are contractually restricted by their fund documentation and, where bond investments are permitted, these typically concern convertible bonds, aligned with the venture capital nature of the vehicle. The transposition of Directive (EU) 2024/927 (“AIFMD II”) into Greek law, which introduced the concept of loan origination by AIFs, is expected to reshape the legal framework requiring AIFMs engaging in loan value of the property). 2.5 Loan Origination
originating activities to implement effective policies, procedures, and processes for assessing the credit risk and for administering and monitoring their credit portfolio. 2.6 Non-Traditional Assets Under Greek law, alternative investment funds (AIFs) may, in principle, invest in non-traditional asset classes provided that such investments fall within their defined investment strategy and are properly disclosed to investors. In line with Article 4 (1)(a) AIFMD and corre - sponding clarifications by the European Commission, an undertaking that raises capital to invest in crypto- assets in accordance with a defined policy qualifies as an AIF. While the AIFMD does not set asset eligibility criteria, it requires the AIFM to ensure proper risk man - agement, liquidity, and investor protection, leaving Member States free to impose stricter requirements. By the new Law 5193/2025, crypto-assets have been expressly recognised as lawful investment instru - ments, aligning with Regulation (EU) 2023/1114 (MiCA). This legal recognition enables AIFs to invest in crypto-assets under strict regulatory conditions. However, both the European supervisory authorities (ESMA, EBA, EIOPA) and HCMC have repeatedly stressed the high volatility and speculative nature of such assets, urging caution. For other non-traditional assets, such as consumer credit portfolios, cannabis-related investments, or liti - gation funding, Greek law does not provide an explicit prohibition; however, such strategies are assessed on a case-by-case basis by the regulator. In practice, AIFMs must demonstrate adequate governance, investor disclosures, and compliance with the risk profile of professional investors, who are the typical target of such products. 2.7 Use of Subsidiaries for Investment Purposes The use of subsidiaries, typically in the form of spe - cial purpose vehicles (SPVs), is a common practice in the Greek alternative investment funds market, espe - cially for implementing specific investment strategies or structuring complex transactions. Subsidiaries are frequently used in private equity, real estate, and infra - structure investments, where holding assets through
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