GREECE Law and Practice Contributed by: Ioannis Charalampopoulos, Petros Machas and Alexandros Saratsiotis, Machas & Partners
dedicated legal entities provides clear operational, legal, and tax advantages. For example, in real estate strategies, the use of SPVs allows for the segregation of property-level liabilities, simplifies asset owner - ship, and facilitates financing or joint ventures at the asset level. In private equity deals, SPVs often serve as acquisition vehicles for portfolio companies, allow - ing the fund to ring-fence liabilities and manage exit strategies more flexibly. From a regulatory standpoint, while Greek legislation does not impose a general restriction on the use of subsidiaries by alternative investment funds, their use must align with the fund’s investment policy and risk management framework and be disclosed in the fund documentation. The AIFM must retain control and oversight over these vehicles and ensure that their use does not obscure the risk profile of the fund. However, while such structuring is permitted and often justified from a business and operational standpoint, it may introduce additional complexity in terms of regulatory approval and supervision. In particular, a multilayered or opaque ownership structure above the fund or its manager can prolong the licensing process, as the supervisory authority (the HCMC) will assess trans - parency, control, and potential conflicts of interest at each level. Therefore, although subsidiaries are a widely used and accepted structuring tool, the overall setup must remain transparent and aligned with the principles of sound management and investor protec - tion. 2.8 Local/Presence Requirements for Funds Alternative Investment Funds established in Greece (Article 40 of Law 4706/2020) may be managed either by a Greek-authorised AIFM under Law 4209/2013 or an EU AIFM authorised under the AIFMD regime operating via passporting. Venture capital mutual funds established under Article 7 of Law 2992/2002 must be managed by a venture capital mutual funds management company estab - lished as a Greek société anonyme with an exclusive scope or an authorised manager from another EEA state. The same applies to Closed-End VCCs under Article 5 of Law 2367/1995.
There is no legal requirement for directors or key exec - utives to reside permanently in Greece, nor is there an obligation for corporate funds to appoint local direc - tors, maintain physical premises, or hire local employ - ees. However, individuals exercising critical functions (eg, portfolio management, risk management) must be fit and proper, and the HCMC must recognise their qualifications. 2.9 Rules Concerning Service Providers There are strict rules in Greece regarding the selection and location of key service providers for AIFs, VCMFs and VCCs. In the case of AIFs, the HCMC will not grant an AIF license if the fund’s manager or depositary does not meet the legal and regulatory standards, including reliability and professional experience relevant to the fund’s strategy and assets. Notably, the deposi - tary must be established in Greece. For EU AIFs, the depositary must be located in the fund’s home Member State. For non-EU AIFs, the depositary may be established in the third country where the AIF is based, in Greece, or in the reference Member State of the AIFM. Eligible depositaries include credit insti - tutions licensed under Greek or EU law, as well as Investment Services Firms (ISFs) that meet stringent capital adequacy and authorisation requirements. As regards VCMFs, the custodian must be: • a credit institution established in Greece or another EU Member State operating through a branch; or • an authorised investment services company or investment firm meeting specific capital adequacy and own funds requirements under EU Regulation 575/2013 and Greek Law 4261/2014. VCCs are subject to the same depositary requirements as AIFs, ensuring consistency in investor protection and regulatory oversight. Functions such as AML compliance and internal audit can be outsourced, provided the external service pro - vider demonstrates the requisite expertise and stand - ing. However, the regulatory focus remains firmly on the location, licensing and integrity of managers and depositaries.
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