FIP AND 7% FLAT TAX

Residency Permit for “Financially independent Persons” (FIP) & 7% Flat tax rate for foreign pensioners who decide to live in Greece

A Residence Permit for Financial Independent Persons (FIP Residence Permit) is a residence permit type applicable to third country-nationals willing to reside in Greece. After the implementation of the Immigration and Social Integration Code and other provisions more preferential provisions were introduced regarding the issuance of residence permits, thus making Greece one of the most popular EU countries attracting many third country citizens wishing to obtain EU Residency. The breadth of our expertise and the depth of our experience, has offered us the opportunity to handle numerous FIP Residence Permit cases ensuring a successful outcome, exceeding the expectations and making the procedure smooth and problem-free for our clients.

A two-year residence permit can be granted to a thirdcountry national under the condition that sufficient financial resources will be proven in terms of a stable annual income necessary to support personal & family expenditure per year. The aforementioned third-country national may be accompanied by his/her family members, who will be granted an individual residence permit, which shall expire together with the residence permit of the sponsor.

Minimum amount per month

The amount of the sufficient resources is currently provided in a Joint Ministerial Decision No. 41712/2014 (issued pursuant to para. 7 of Article 136 of the aforementioned Law). The sufficient resources must be equal to the minimum amount of €2.000 euros per month. In the event that the said third-country national is accompanied by members of his family (spouse, children), this amount is increased by 20% for the spouse and by 15% for every child. The requirement of sufficient resources must be met either by each family member or by all family members in aggregate.

The total amount of the resources may be proved indicatively: by a foreign pension scheme, by bank account statements, title deeds, lease contracts or/and any other evidence that can prove sufficient legally acquired financial means to cover the living expenses during their residence in Greece, without providing salaried work or exercising any independent economic activity.
The above documentary evidence must prove: a) the stability of the applicant’s income, b) the minimum monthly amount of the income and c) the legal resources of the income. Please note that pursuant to Greek legislation, the stable monthly income must not originate from employment salary payable in the applicant’s country.

Duration & Renewal

The residence permit for the financially independent persons is valid for two years and it can be renewed for two years each time such renewal is requested, provided that the other requirements are continuously met. The residence permit for family members shall expire or be renewed simultaneously with the permit of the sponsor.

According to the latest amendments with L. 4686/2020 article 38 par. 1, it is required for its holder to reside in Greece for at least 6 months annually in order to qualify for the renewal. This condition does not need to be met for any residence permits issued prior to the Law’s publication date, i.e. the 12th of May of 2020.

Visa Type D issued by the local Greek Consular Authorities

As a prerequisite for the issuance of a residence permit for Financial Independent Persons is stipulated by the law the issuance of a specific type of Visa, namely Visa D. The applicant appears in person before the Greek Consular Authorities or the competent Visa Application Center which is closer to his/her permanent residence and submit the general and specific supporting documents. This procedure shall also include an interview. The national visa granted shall be valid for a maximum period of one year.
Duration & Renewal

The residence permit for the financially independent persons is valid for two years and it can be renewed for two years each time such renewal is requested, provided that the other requirements are continuously met. The residence permit for family members shall expire or be renewed simultaneously with the permit of the sponsor.
According to the latest amendments with L. 4686/2020 article 38 par. 1, it is required for its holder to reside in Greece for at least 6 months annually in order to qualify for the renewal. This condition does not need to be met for any residence permits issued prior to the Law’s publication date, i.e. the 12th of May of 2020.
Visa Type D issued by the local Greek Consular Authorities

As a prerequisite for the issuance of a residence permit for Financial Independent Persons is stipulated by the law the issuance of a specific type of Visa, namely Visa D. The applicant appears in person before the Greek Consular Authorities or the competent Visa Application Center which is closer to his/her permanent residence and submit the general and specific supporting documents. This procedure shall also include an interview. The national visa granted shall be valid for a maximum period of one year.

Flat Tax of 7% for foreign pensioners with tax residence in Greece

The newly adopted Art. 5b of the Greek Income Tax Law, in force since 31 July 2020, provides that pensioners who transfer their tax residence to Greece will benefit from a so-called flat tax of 7% on all foreign income. This income will include not only the pension, but also other income earned by the pensioner abroad, so that a not inconsiderable tax saving can be achieved as regards correspondingly high incomes. However, regarding incomes from letting and leasing of real estate lain abroad the respective tax regulations in the country of origin of the pensioner must be considered.

In order to benefit from the Flat Tax, the following conditions must be met:

● original tax residence abroad (at least 5 years within the last 6 years before the transfer of the main residence to Greece)
● Transfer of tax residence to Greece
● Proof that you are a pensioner
● Double taxation agreement between country of origin and Greece (such an agreement exists with Germany)

The application has to be submitted to the Tax Office for non-residents until 31 March of the year in question; for 2020 (the year of entry into force of this law) the application period ended on 30 September 2020.
A similar regulation for foreign pensioners is also known from Portugal, now also Greece creates a correspondingly reduced tax framework to favor investments of pensioners in the Greek real estate market. However, the regulation can also be interesting for foreign pensioners who have already purchased a property in Greece years ago and live in Greece, but have so far hesitated to tax their income in Greece.