Real estate investment companies: A rising force in the Greek economy
Sakis F. Tzigkos
by Sakis F. Tzigkos
Greece’s real estate market is experiencing a remarkable transformation, attracting both domestic and international investors. At the heart of this surge are real estate investment companies (REICs), which have emerged as a dynamic and promising investment vehicle. With a flexible regulatory framework and significant tax incentives, REICs are playing a crucial role in shaping the future of the Greek real estate sector.
A market on the rise
The Greek economy has been making headlines for its strong recovery, and the booming real estate sector is a key driver of this success story. Over the past few years, foreign investors have increasingly turned their attention to Greece, recognising the country’s potential as a prime destination for property investments. The steady flow of capital into the market has cemented Greece’s position on the global investment map, setting the stage for further growth.
REICs have positioned themselves at the forefront of this trend, facilitating large-scale property investments. These companies offer a structured, transparent, and efficient way to invest in real estate, combining the benefits of a listed company with the stability of long-term property holdings.
How REICs operate
A REIC is a public limited company (PLC) exclusively focused on acquiring and managing real estate assets. To operate legally, it must obtain approval from the Hellenic Capital Market Commission (HCMC), which assesses its investment strategy, financial strength, and corporate governance. The company must also meet strict regulatory requirements, ensuring transparency and accountability.
To establish a REIC, investors must contribute a minimum share capital of EUR 25 million, which can be in cash, money market instruments, or real estate assets. Within two years of its creation, a REIC is required to list its shares on a regulated Greek stock exchange – a move that enhances liquidity and investor confidence. At the time of listing, at least 50% of the company’s assets must be invested in real estate.
Investment strategy and growth potential
A REIC follows a carefully defined investment framework, designed to ensure stability and profitability. At least 80% of its total assets must be invested in commercial or industrial properties across the European Economic Area (EEA), while investments outside the EEA are capped at 20%. Additionally, residential real estate investments cannot exceed 25% of total holdings, ensuring a focus on high-value commercial assets.
The regulatory framework also limits borrowing to 75% of total assets, preventing excessive leverage and promoting sustainable growth. If loans are taken to acquire properties for operational needs, the limit is set at 10% of the company’s equity, ensuring financial prudence.
A tax-friendly investment model
One of the most attractive aspects of REICs is their favourable tax treatment. Unlike traditional corporations, REICs are exempt from corporate income tax, except for dividends earned in Greece. Instead, they are taxed based on their average investment value, with a rate linked to the European Central Bank’s key interest rate, making REICs one of the most tax-efficient investment vehicles in the country.
To maintain transparency, REICs are required to publish semi-annual investment reports, detailing their assets and investment strategies. These reports must be based on independent valuations, ensuring that investors have a clear picture of the company’s financial health.
The future of REICs in Greece
With Greece becoming an increasingly attractive destination for property investments, REICs are expected to play an even greater role in the country’s economic development. Their ability to attract foreign capital, combined with a stable regulatory environment and tax incentives, positions them as a key pillar of the real estate market.
As the sector continues to evolve, REICs offer a secure, transparent, and highly profitable investment option for both institutional and individual investors. With the right policies in place, they could become a driving force behind Greece’s long-term economic growth, solidifying the country’s reputation as a premier real estate investment hub.
XLNC member firm TZIGKOS Accounting & Tax Firm Athens, GreeceT: +30 210 3614719
Auditing & Accounting, Tax, Corporate Finance
Sakis Tzigkos began his career as an auditor in the banking and finance sector with KPMG S.A, in Greece. In 2015 he joined TZIGKOS | BANTRAS (today: TZIGKOS Accounting & Tax Firm). Sakis has taken on various roles within the firm, most recently holding the role of Managing Partner. With a passion for accelerating digitalisation within tax procedures, he sees his role as being a catalyst for problem solving with respect to the complex business challenges that leaders face as they navigate the often volatile and constantly changing environment. Contact Sakis.
TZIGKOS Accounting & Tax Firm is a trusted provider that offers complete accounting services, specialised tax assistance, and strategic consulting to help businesses and individuals succeed. Since our establishment in 1988, the mission of TZIGKOS Accounting & Tax Firm has been to cultivate exceptional collaboration and transparent relationships.
