Greece vs. Ireland: Tax Incentives for Investors Post-Brexit

Reading time: 15 minutes

Table of Contents

1. Introduction
2. Economic Overview: Greece and Ireland
3. Tax Incentives in Greece
4. Tax Incentives in Ireland
5. Comparison of Tax Regimes
6. Investment Opportunities
7. Brexit Impact on Investment Decisions
8. Future Outlook
9. Conclusion
10. FAQs

1. Introduction

In the wake of Brexit, investors are increasingly looking for alternative destinations within the European Union to park their capital and expand their operations. Two countries that have emerged as attractive options are Greece and Ireland. Both nations have implemented various tax incentives to lure foreign investors, but their approaches and economic contexts differ significantly. This comprehensive analysis will delve into the tax incentives offered by Greece and Ireland, compare their effectiveness, and explore the broader economic implications for investors in a post-Brexit landscape.

2. Economic Overview: Greece and Ireland

Before we dive into the specifics of tax incentives, it’s crucial to understand the economic context of both countries. Greece and Ireland have experienced different economic trajectories in recent years, which significantly influences their approach to attracting foreign investment.

2.1 Greece’s Economic Recovery

Greece has been on a path of economic recovery following a severe debt crisis that began in 2009. The country has implemented significant structural reforms and fiscal consolidation measures as part of its bailout programs. Recent economic indicators show promising signs:

• GDP Growth: 1.9% in 2022, with projections of 2.1% for 2023
• Unemployment Rate: Decreased from a peak of 27.5% in 2013 to 11.6% in 2022
• Public Debt: Reduced from 180.5% of GDP in 2020 to 171.3% in 2022

These improvements have allowed Greece to regain some investor confidence and implement more aggressive tax incentives to attract foreign capital.

2.2 Ireland’s Stable Economic Performance

Ireland, on the other hand, has maintained a relatively stable economic performance, even in the face of Brexit uncertainties:

• GDP Growth: 12.2% in 2022, with projections of 4.1% for 2023
• Unemployment Rate: 4.8% in 2022
• Public Debt: 45.2% of GDP in 2022

Ireland’s strong economic fundamentals and its established reputation as a business-friendly environment have allowed it to maintain its attractiveness to foreign investors, even as it adjusts its tax policies in response to global pressures.

3. Tax Incentives in Greece

Greece has implemented a series of tax incentives aimed at attracting foreign investors and high-net-worth individuals. These measures are part of a broader strategy to revitalize the Greek economy and position the country as an attractive investment destination.

3.1 Non-Dom Tax Regime

In 2020, Greece introduced a non-dom tax regime, offering significant benefits to wealthy individuals who transfer their tax residence to Greece:

• Flat tax rate of €100,000 per year on global income
• Additional €20,000 for each family member
• Exemption from inheritance and gift taxes on foreign assets
• Minimum investment requirement of €500,000 in Greek real estate, businesses, or government bonds

This regime is particularly attractive for high-net-worth individuals looking to optimize their tax situation while enjoying the Mediterranean lifestyle. Investors interested in real estate athens can benefit from this program while also capitalizing on the city’s potential for property appreciation.

3.2 Corporate Tax Incentives

Greece has also implemented several corporate tax incentives to attract businesses:

• Reduced corporate tax rate from 28% to 22%
• Tax exemptions for reinvested profits
• R&D tax credits of up to 100% of eligible expenses
• Special tax regimes for holding companies and intellectual property

These measures aim to make Greece more competitive in attracting international businesses and fostering innovation within the country.

4. Tax Incentives in Ireland

Ireland has long been known for its business-friendly tax environment, which has been a key factor in attracting multinational corporations. However, the country has had to adapt its policies in response to international pressure and changing global tax standards.

4.1 Corporate Tax Rate

Ireland’s headline corporate tax rate of 12.5% remains one of the lowest in the European Union. However, the country has agreed to implement the OECD’s global minimum corporate tax rate of 15% for large multinational enterprises from 2023 onwards. Despite this change, Ireland maintains several attractive features:

• 12.5% rate still applies to companies with annual turnover below €750 million
• Extensive network of double taxation agreements
• Participation exemption regime for foreign dividends

4.2 R&D Tax Credit

Ireland offers a generous R&D tax credit to encourage innovation:

• 25% tax credit on qualifying R&D expenditure
• Option to claim the credit as a cash refund over three years
• Key Employee Reward mechanism allowing companies to reward certain R&D employees with a portion of the credit

4.3 Knowledge Development Box

The Knowledge Development Box (KDB) regime offers a preferential tax rate of 6.25% on income from qualifying patents and copyrighted software developed through R&D activities in Ireland.

5. Comparison of Tax Regimes

When comparing the tax regimes of Greece and Ireland, several key differences emerge:

Greece’s tax incentives are more aggressive, reflecting its need to attract investment and rebuild its economy. Ireland’s regime is more established but faces challenges in maintaining its competitive edge within evolving international tax standards.

6. Investment Opportunities

The tax incentives offered by both countries create unique investment opportunities across various sectors:

6.1 Greece

• Real Estate: The non-dom regime has sparked interest in luxury properties, particularly in Athens and popular islands.
• Tourism: Tax incentives for business investments align well with Greece’s strong tourism sector.
• Renewable Energy: Greece offers additional incentives for green energy projects.
• Technology: Efforts to create a “Greek Silicon Valley” are supported by R&D tax credits.

6.2 Ireland

• Technology: Dublin’s “Silicon Docks” continues to attract tech giants and startups.
• Pharmaceuticals: Ireland’s strong pharma sector benefits from R&D incentives.
• Financial Services: Post-Brexit, Dublin has emerged as a key financial hub.
• Green Economy: Ireland is positioning itself as a leader in sustainable finance and green tech.

7. Brexit Impact on Investment Decisions

Brexit has significantly altered the investment landscape in Europe, influencing decisions between destinations like Greece and Ireland:

• EU Market Access: Both countries offer stable EU membership, crucial for businesses seeking European market access.
• Financial Services: Ireland has seen an influx of financial firms relocating from London.
• Supply Chain Restructuring: Companies are reassessing their European operations, benefiting both Greece and Ireland.
• Talent Pool: Ireland’s English-speaking workforce is an advantage, while Greece is investing in skill development.

8. Future Outlook

The future competitiveness of Greece and Ireland as investment destinations will depend on several factors:

8.1 Greece

• Continued economic reforms and stability
• Success of the non-dom regime in attracting high-net-worth individuals
• Development of key sectors like technology and renewable energy
• Potential adjustments to tax incentives based on their effectiveness and EU regulations

8.2 Ireland

• Adaptation to the global minimum tax rate without losing competitive edge
• Continued focus on innovation and R&D to justify higher tax rates
• Positioning as a key EU hub for various industries post-Brexit
• Potential introduction of new incentives to maintain attractiveness to foreign investors

9. Conclusion

Greece and Ireland present two distinct approaches to attracting foreign investment through tax incentives. Greece’s more aggressive strategy reflects its need for economic revitalization, offering significant benefits to high-net-worth individuals and businesses willing to invest in the country. Ireland, with its established reputation and strong economic fundamentals, focuses on maintaining its attractiveness while adapting to new global tax standards.

For investors, the choice between Greece and Ireland will depend on various factors beyond just tax considerations. These include sector-specific opportunities, market access needs, workforce requirements, and long-term strategic goals. Both countries offer unique advantages and are likely to remain competitive investment destinations in the post-Brexit European landscape.

As the global economic environment continues to evolve, particularly in light of Brexit and changing international tax standards, both Greece and Ireland will need to remain adaptable. Their ability to balance attractive tax incentives with sustainable economic policies will be crucial in maintaining their appeal to foreign investors in the years to come.

10. FAQs

Q1: How does Greece’s non-dom tax regime compare to similar programs in other countries?

A1: Greece’s non-dom regime is competitive with similar programs in countries like Italy and Portugal. It offers a flat tax rate on global income, which can be particularly attractive for high-net-worth individuals. However, it does require a minimum investment of €500,000 in Greek assets, which is higher than some other countries’ requirements.

Q2: Will Ireland’s corporate tax rate increase affect its attractiveness to tech companies?

A2: While the increase to 15% for large multinationals may have some impact, Ireland’s overall package of incentives, including R&D credits and the Knowledge Development Box, remains attractive. Additionally, factors such as a skilled workforce and established tech ecosystem continue to draw companies to Ireland.

Q3: How do Greece’s R&D tax incentives compare to those offered by Ireland?

A3: Greece offers up to 100% tax credit on eligible R&D expenses, which is more generous than Ireland’s 25% credit. However, Ireland’s system is more established and includes additional features like the ability to claim cash refunds and reward key employees. The effectiveness of these incentives often depends on the specific nature of the R&D activities and the company’s overall tax situation.

Q4: Are there any restrictions on the types of investments that qualify for Greece’s non-dom regime?

A4: The €500,000 investment required for Greece’s non-dom regime can be made in real estate, businesses, or government bonds. There are some restrictions, such as the real estate investment needing to be in a single property rather than multiple smaller investments. It’s advisable to consult with a local tax expert for the most up-to-date and detailed information on qualifying investments.

Q5: How have Brexit and the COVID-19 pandemic affected the implementation of these tax incentives?

A5: Both Brexit and the COVID-19 pandemic have accelerated the implementation and adjustment of tax incentives in Greece and Ireland. Greece introduced its non-dom regime partly in response to these events, aiming to attract investment and high-net-worth individuals. Ireland has focused on maintaining its attractiveness post-Brexit, particularly for financial services companies relocating from London. Both countries have also introduced additional measures to support businesses affected by the pandemic, which complement their existing tax incentive structures.

Article reviewed by Sophia Georgiadou, Global Expansion Consultant | Market Entry Strategist | Breaking Into Emerging Markets with Tailored Localization Plans, on April 1, 2025