In the beginning, he researched the potential of New Zealand and Singapore, two countries which are very popular with Chinese investors. “In China, interest in investments has developed to the extent that there are now companies specialized in guiding potential investors” lawyer Dafni Korobeli describes the modern reality of China’s rising economy. Dafni Korobeli, who holds an LLM in Chinese Law from Shanghai University and an MBA from the Beijing University, splits her time working and living in both countries. Since she is proficient in the Chinese language and culture she legally represents Mr Ping. “The new changes implemented by the Greek Ministries of Development and Internal Affairs regarding investments in Greece have made our country an interesting choice for investors,” she emphasizes, “however, many difficulties still arise”.
“When I was informed about the Greek program regarding the issuance of Visas to non EU Residents who have purchased property whose value exceeds 250.000 euros, I thought it was a great investing opportunity”, Mr Ping confirms. In September 2015, he arrived in Greece and within 6 days he bought a house. “Did you go crazy?” his friends in Shanghai asked in surprise.” By spending 250.000 euros I was able to acquire a Visa that allows me to travel to Europe as well as spend my holidays in a place where fruit actually has a taste, vegetables are fresh and the milk and oil are of excellent quality”. Using those arguments, Mr Ping, who is planning to deal in the construction and tourist business, as well as exports in Greece, tried to defend his choice. “Greek food products are widely sought after but hard to find in China” he comments to “K” newspaper “Crocus (saffron) is widely used in Chinese medicine and since we cannot produce it ourselves, it would be worth it to import it from Greece”.
Mr Ping’s enthusiasm was halted by the amount of tax he would have to pay in Greece: in case he set up a company in Greece he would be taxed at 29% and he would also have to make an advance payment of 100% of the tax amount he would normally have to pay the following year. In China, small companies are only taxed at 3%, companies providing services are taxed at 6% and construction companies like mine, at 11%.” When it comes to newly established companies, the Chinese government is even more generous. The state grants a loan and provides accommodation as well as 1-2 years tax exemption to university graduates, who have a reliable business plan.” Considering the financial crisis and the high unemployment rate in Greece, the Chinese investor expected the Greek tax regime to be more favourable towards small and medium sized businesses. So, how is he planning to proceed now? “I will set up a company, but I am not going to start trading yet”, he concludes.
“In a bind”
“We are in a bind, as foreign real estate buyers and investors ask us to calculate the annual tax they need to pay, something which, unfortunately, is impossible.” emphasizes Mr Mihalis Sezenias who is an accountant and tax preparer. For example, since 01/01/2013, property income tax rates at the first tax bracket have already changed three times. “They are also surprised to learn that the collective sum of all the money they have spent to repair their property, will not deducted from the tax they need to pay for renting it”.
