The Greek economy is expected to grow 6.5 percent this year, according to the IMF – up from a decline of nine percent in 2020 – marking the start of a promising post-pandemic recovery that brings with it ample opportunity for investment; and not just for residents. As tourism and real estate rebound, new, innovative projects come to fruition (aided by a €33bn funding package under the NextGenerationEU programme).
With port infrastructure upgraded and the country making significant strides in renewable energy production, Greece offers an attractive package for international investors. It also offers one of the EU’s most coveted investment visa programmes – the Greece Golden Visa, issued to non-EU citizens who make a significant contribution to the country’s economy and offering five-year residency for investors and their families.
With all of that in mind, appetite for international investment is set to grow in the coming years – and catering to the demand is Eurobank, which recently introduced the first segment in Greece to be dedicated to international customers, as well as the country’s first bank branch to service Golden Visa holders and non-resident investors. To find out more about the bank’s new ‘one-stop-shop’ for overseas customers, World Finance spoke to Iakovos Giannaklis, General Manager of Retail Banking at Eurobank, who talked us through the country’s key investment opportunities, the remote services Eurobank offers and how the Greek economy is faring as it emerges in a post-Covid landscape.
What impact has the pandemic had on the Greek economy and on international investment?
As a consequence of the pandemic, Greece lost nine percent of its GDP in 2020, and foreign direct investment flows dropped by 37 percent. As expected, movement restriction-vulnerable sectors such as tourism and retail trade suffered the largest blows, with manufacturing following due to weaker demand and disruption in international supply chains. Economic recovery in 2021, however, is expected to be significantly stronger. Tourism posted a robust recovery, with revenue reaching 78 percent of its pre-pandemic levels in August, and real estate prices maintained their upward trend even amid lockdown. The number of construction projects in the pipeline also hit a 15-year high in September, opening up new opportunities for investment in real estate as well as a raft of other sectors.
What key opportunities are there for international investors as the country recovers?
Greece is in the process of transforming its economic model through a solid growth plan comprising structural reforms and large-scale projects. Proportionally to its GDP, the country is one of the largest beneficiaries of the NextGenerationEU programme, created to help economies emerge stronger from the pandemic. Under the programme, Greece will receive nearly €33bn in grants and loans in the next five years to finance investments in green transition, digital transformation, R&D, innovation and infrastructure.
In recent years, the Greek government has gradually legislated a series of investment and tax benefit regimes to entice foreign investors
An additional €21bn will flow through EU structural and investment funds, while the European Investment Bank and the European Bank of Reconstruction and Development have already committed to back projects in excess of €7bn. All of this points to huge potential for growth and investment opportunities. Moreover, the government’s recent labour and social security reforms, corporate tax rate cuts, the digitalisation of the public sector and fast-track processes introduced to ensure quick absorption of the EU funds make Greece an attractive country to invest in.
Which areas in particular are ripe for investment and why?
With the potential for year-long solar and wind power and the country’s decarbonisation commitment to the EU, Greece presents a large potential for investments in renewable energy production. Owing to its position as the south-eastern gateway to Europe and its recently upgraded port infrastructure, the country also has the capacity to attract investment in logistics, turning it into a major regional and European trade hub. As always, tourism also remains a key area of focus. In addition, Greece offers a competitive advantage in other lesser-known sectors, such as pharmaceuticals, metals, software development and agri-food products.
How is Greece’s real estate market faring currently?
The Greek real estate market was severely impacted by the financial and debt crises. Between 2010 and 2016, commercial real estate prices declined by 30 percent, and residential apartment prices by about 40 percent, according to the Bank of Greece. Thanks to the gradual recovery of the Greek economy, this downward spiral has now reversed, with property prices rising by around 15 percent from 2017 to 2020. The upward trend slowed down but was not interrupted during the pandemic. Based on preliminary data, we expect it to continue into 2021, and even accelerate further over the next few years. The revival of holiday rentals, a predicted rise in disposable income and development prospects on the Athens Riviera will be among the key drivers of this growth.
Eurobank introduced a dedicated Retail International Customers segment in 2020. What does this entail?
The International Retail Customers segment is dedicated to servicing non-resident customers, Greeks and foreigners who reside abroad, for all their banking and investment needs in Greece. The segment also provides exclusive services and custom-made products for Golden Visa and tax-resident investors, such as foreign pensioners.
Why did Eurobank decide to launch a service exclusively for non-Greek residents?
In recent years, the Greek government has gradually legislated a series of investment and tax benefit regimes to entice foreign investors, and we have witnessed increasing demand for banking services from abroad as a result. Eurobank has a significant legacy portfolio of non-resident customers who have repeatedly expressed interest for specialised banking services and tailor-made products. This has become even more apparent as a result of the pandemic, with non-resident clients asking to enjoy our services from the comfort of their homes. Our focus has been on addressing these requests by developing a number of products and procedures in order to attract new non-resident customers as investor interest in Greece grows.
What perks do customers get?
Our customers benefit from remote banking services – whether that’s signing up to the bank or applying for a mortgage loan – meaning they don’t need to be physically present in Greece. Through the innovative v-Banking service, we also offer remote services for day-to-day banking transactions. Clients can meet their dedicated International Relationship Manager over video, a dedicated EuroPhone international helpline is also available seven days a week and of course via our award-winning Eurobank mobile app. According to their needs and risk profile, our clients also have access to a wide range of investment solutions, managed by Eurobank Asset Management, a leader in Greece in the areas of fund and institutional asset management, investment advisory and fund selection. Buying property in Greece is easier now than it was in the past, although one can still meet with obstacles along the way. We have developed infrastructure and products to facilitate our clients’ journey to buying their dream holiday home. Non-resident investors can now commence a banking relationship and apply for a mortgage loan with Eurobank remotely. Mortgages are offered in Euro currency to residents of most countries on particularly attractive terms.
You were the first bank in Greece to introduce a segment like this. How successful has it been so far?
We are proud to say that since the beginning of the year, we have received more mortgage applications from non-residents than we did in the previous five years, indicating the segment has been successful. The formation of the financial landscape, as explained previously, will attract a significant number of foreign investors, which, in combination with the tax incentives and the uniqueness of Greece as a destination, will considerably increase the demand for retail products customised for non-residents.
Eurobank was also the first bank in Greece to introduce a branch dedicated to servicing Golden Visa and non-resident investors. What response have you seen?
The international retail branch opened in February 2020. We are currently the only bank in Greece operating a branch dedicated to serving Golden Visa and non-dom investors, operating by appointment. As it opened just before the Covid outbreak, we saw a relatively low number of visitors in the first year. However, in 2021 we witnessed strong pickup in new clients, and although there has been a significant slowdown in new Golden Visa issues at a country level, the branch is experiencing rising interest in the products and services it offers.
You also offer services in tax consulting and real estate management; what does this entail?
Finding the ideal property requires significant time investment and the right partners. Navigating through a foreign tax regime and legal framework may also be a challenge for someone who is a non-resident. Eurobank has created an ecosystem that facilitates all of our customers’ needs and in cooperation with reputable partners, we offer a hassle-free, one-stop investment experience. We collaborate with leading tax consultants to provide our clients with tax and public admin-related services, whether that’s applying for Golden Visas, transferring their tax residence to Greece, obtaining tax numbers or paying income and property taxes. We have partnered with reputable agencies to provide remote, end-to-end management services. These include property and tenancy searches, sales contacts and lease agreements, property maintenance and valuations and technical and legal due diligence. We aim to cover all stages of the property investment process.
What other plans does Eurobank have in the pipeline, and what is your vision for the future?
Eurobank is currently going through a transformation that not only aims to create value for our customers, employees and shareholders, but also to help us become part of the wider national move towards sustainability. We aim to support the development of major infrastructure projects over the next ten years, while working with both small businesses and individuals to offer consulting and lending services. We are also investing in new technology and using it to empower our employees and customers. By embracing the digital world while simultaneously maintaining that element of human interaction, we believe we will thrive in the world’s future economic and social environment.
For more information about Eurobank’s services, go here:
https://www.eurobank.gr/en/international-customers
