GREECE Law and Practice Contributed by: Ioannis Charalampopoulos, Petros Machas and Alexandros Saratsiotis, Machas & Partners
for that purpose, with a minimum share capital of EUR100,000, or to a licensed investment firm or UCITS management company. Venture capital companies are not typically preferred as structures. While tax or incentive-driven structuring (such as car - ried interest vehicles or management share arrange - ments) can occasionally influence how sponsors structure their management entities, especially in pri - vate equity or venture capital settings, it is not typically the dominant driver. Regulatory compliance, sub - stance, and control over decision-making remain the primary considerations. Nonetheless, equity incentive schemes for key personnel may be implemented at the level of the management entity or via affiliated vehicles, particularly when long-term alignment with performance is essential. The remuneration policy of AIFMs shall provide that at least 50% of any variable remuneration of personnel in critical functions shall consist of units or shares of the relevant AIF managed by the AIFM or equivalent ownership interests or equi - ty-linked financial instruments or equivalent non-liquid instruments, unless the value of the portfolio of AIFs under management is equivalent to less than 50% of the total portfolio managed by the AIFM. 3.3 Regulatory Regime for Managers Alternative Investment Fund Managers (AIFMs) are primarily governed by Law 4209/2013, which trans - poses the AIFMD (Directive 2011/61/EU), along with relevant EU Regulations such as Commission Delegat - ed Regulation (EU) 231/2013. AIFMs must be author - ised by HCMC, unless they qualify as sub-threshold managers (ie, managing assets below the thresholds of Article 3 AIFMD), in which case they are subject to registration and lighter reporting obligations. The regulatory framework imposes strict organisational, capital, risk management, and transparency require - ments. Under Article 9 of Law 4209/2013, the share capital of the AIFM, which is an internally managed AIF, shall have a minimum amount of EUR300,000, while the share capital of an AIFM designated as an externally managed AIF shall have a minimum amount of EUR125,000. AIFMs, as defined under Article 12 of Law 4209/2013, owe a fiduciary duty to both the fund as a pool of assets and its investors, which includes acting honestly, with due skill, care, and diligence, and in the best interests of the AIF and its investors. This
fiduciary duty is reinforced by conflict-of-interest rules and robust valuation and risk policies. AIFMs must also ensure that all investors are treated fairly and that preferential treatment is clearly disclosed. In terms of disclosures, AIFMs, as per Article 23 of Law 4209/2013, are required to provide detailed infor - mation to investors before investing and on a regular basis thereafter, including, but not limited to, disclo - sures on strategy, leverage, risk, liquidity, fees, and conflicts of interest. These are typically outlined in the fund’s offering documents (eg, prospectus or forma - tion and management agreement). Although disclo - sures are not typically made public by default, specific reports, particularly Annex IV AIFMD reports, are sub - mitted to the HCMC. These reports may be subject to regulatory review or publication, especially concern - ing monitoring systemic risk or facilitating supervisory cooperation across the EU. 3.4 Tax Regime for Managers There are no specific income tax provisions applying to AIFMs. Management services are, in principle, VAT- exempt. Also refer to 2.4 Tax Regime for Funds and 3.6 Taxation of Carried Interest . 3.5 Rules Concerning Permanent Establishments The management of EU AIFs does not constitute effective management in Greece. Therefore, alterna - tive investment funds established outside the Hellenic Republic but with their effective centre of manage - ment located in the Hellenic Republic are not deemed to have a permanent establishment or tax residence in the Hellenic Republic. 3.6 Taxation of Carried Interest Special provisions for the taxation of carried interest have been introduced in Greek law in respect of ven - ture capital mutual funds, whereby the income from carried interest is taxed as capital gains income at a rate of 15%. Participation in carried interest is typical - ly implemented through equity arrangements for the acquisition of units or shares in an alternative invest - ment fund, which directly classifies such income as capital gain.
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