The War For Digital Nomads Heats Up As Greece Passes New Tax Law
On Wednesday (December 2), Greece’s parliament passed a new law allowing digital nomads to cut their income tax in half.
This makes Greece the latest European country to try to attract the new work-from-home workforce, and pits southern Europe against the North in a new race for talent.
“If you can work from anywhere, why not work from Greece?” asks a promotional document reviewed by Greece’s parliament this week. Amid dreamy images of whitewashed farmhouses and deep-blue seascapes, it outlines a new law that allows newly settled foreigners to pay half their income tax for the next seven years.
Starting in January 2021, the program will be open to both employed and self-employed workers, provided they have not previously been tax residents of Greece or are not replacing an existing job in the country.
Kyriakos Mitsotakis’s government hopes the tax break will attract the newly empowered “work-from-anywhere” digital nomad, whom Alex Patelis, the prime minister’s chief economic advisor, describes as “the person who spends three months in Thailand, two months in Jamaica, and so on. “We want them to spend two months in Greece—and why not?”
There’s no need to drive the point home. The weather and sea in Crete, Greece’s southernmost island, are still warm. A party on the night before Greece went into a month-long lockdown on November 7 was buzzing with expats fleeing their own national lockdowns in gloomier climates.
“It’s way nicer here than in London,” says Christoph over a glass of raki. Originally from Germany, he moved to London to work as a management consultant but left for Greece when he wasn’t required to return to the office in September. The internet is good, he says, even in Tris Ekklises, a small fishing cove at the foot of a mountain.
A tender for the rollout of 5G closes in Greece this month, and coverage is expected to be available in major towns and cities in early 2021.
“This place is a paradise, especially if you make good money,” says Taki Despo from his new home in Athens. He moved from New York after his company, the design retailer Moro.com, allowed him to work remotely as director of market relations. “COVID didn’t really have much of an impact; it just gave me a little courage to make this move.”
Kate Silcox, originally from the U.K. but now working as a photo editor for GQ Dubai from Athens, has spent a decade working remotely from various countries but thinks she will now stay in Greece if she can save on taxes. “It would encourage me to be fully committed and settle down there for longer in Greece.”
Greece is hoping that tax incentives will encourage more expats like Kate to stay. It needs them to: Greece lost 800,000 people to wealthier nations during the worst years of its debt crisis between 2009 and 2015. Now it is hoping to reverse that brain drain with these and other tax breaks.
A non-domicile law introduced earlier this year, a tax amnesty in November, and a family office-friendly tax structure planned for next year are aimed at wealthier nomads. But Greece is already late to the game.
Italy’s own brain drain saw 800,000 people leave the country between 2009 and 2019 as its economy struggled to recover from the global financial crisis. It, too, is hoping that the COVID-19 pandemic and tax breaks will help it replenish that talent pool.
In March, Italy’s “Lavoratori impatriati” law was amended to allow new tax residents to earn 70% of their salary tax-free during their first five years in the country. A non-domicile scheme was introduced in 2017, and tax amnesties since then have encouraged some wealth to return to the country.
Croatia and Estonia have also fast-tracked digital nomad visas through their parliaments this year, and a host of other similar programs are already available in the Caribbean.
But northern European countries, which benefited greatly from the brain drain of their southern neighbors, are now losing out. According to InterNations, an online community for expats, foreign workers now prefer warmer European cities such as Valencia and Alicante in Spain or Lisbon in Portugal, which ranked as the top three cities in its recent study. London ranked 51st and Dublin 58th.
Move Hub, a relocation platform, has helped more than 6,700 U.K. households move to other countries since the lockdown in March. In Europe, Spain was the most popular destination, while Portugal saw the largest increase compared to last year.
This migration from northern to southern Europe has been driven by two factors: technology and a pandemic, which has forced a professional workforce far from the office.
However, as Greece’s new laws take effect in 2021, those two things will change. A vaccine may force some workers back to the office, and better technology could allow workers to be literally anywhere, so why Greece?
It will come down to sunshine and technology, Patelis believes. “You can rent a very beautiful house in a very beautiful location for not a lot of money, and you can live a very nice life for a third of the cost of London.”
“Come for the sun, stay for the taxes and technology.”
Source: Forbes