1. Doing Business in Greece Prepared by Prooptiki Ltd September 2010

2. Country - General Information Strategic Link to the: Balkans Eastern Mediterranean Region Eastern Europe Black Sea Population: 11.3 million Working force: 4.6 million Euro-zone since 2001 Capital: Athens 5.5 million inhabitants

3. Basic Economic Figures GDP growth rate -1.5% (Q2 2010) Unemployment Rate: 11.8% (Q2 2010)

4. Major Industries Tourism 15% of GDP Construction Telecommunications Energy Production Textiles Food Processing Shipping Over 4.5% of GDP Chemicals Tobacco Processing Metal Products Mining Petroleum

5. Investment Opportunities Sectors to Invest Tourism Energy ICT Food & Beverage Life Sciences Environmental Management

6. Investment Opportunities Why Invest in Greece? Foreign Direct Investment Gross FDI inflows: € 6.48 million (2008 data) Net FDI inflows: €3.46 million (2008 data) Investment Incentives Investments Incentive Law Greek Economy Member of the Euro-zone Trade Exports grow steadily Infrastructure Due to the Olympic Games 2004 Human Capital Access to Financing & Venture Capital in Greece wide selection of alternatives for their financing needs Emerging National Markets Southeast Europe and the Eastern Mediterranean

7. Labor Regulations Minimum Age limit: 15 years old Most common working hours 5-day week 8 hour day Minimum Wage Levels Representative Minimum Wage Levels in Greece (amounts in €) Until June 30, 2011July 1, 2011 July 1, 2012 Labourers (daily rate) 33.04 – 45.74Raised by the level of EU inflation rate for 2010 Raised by the level of EU inflation rate for 2011 Clerks (monthly rate)739.56 – 1,020.80

8. Labor Regulations Customary and Legal Holidays in Greece January 1 - New Year's Day Whit Monday January 6 - Epiphany May 1 - Labour Day March 25 - Independence Day October 28 - National Holiday Good Friday December 25 - Christmas Day Easter Monday December 26 - Boxing Day “Overwork”: 1 extra hour per day 20% premium of the hourly wage “Overtime”: any extra hour after “overwork” Up to 120 hrs a year: 40% premium More than 120 hrs a year: 60% premium

9. Labor Regulations Employee Compensation Employment Period (in the same employer) Dismissal Notice Time 2 months – 2 years1 month 2 years – 5 years2 months 5 years – 10 years3 months 10 years – 15 years4 months 15 years – 20 years5 months More than 20 years6 months Dismissal Notice Working PeriodCompensation 2 months – 1 year1 month + 1/6 1 year – 4 years2 months + 1/6 4 years – 6 years3 months + 1/6 6 years – 8 years4 months + 1/6 8 years – 10 years5 months + 1/6 10 full years6 months + 1/6

10. Taxation in Greece Individual Taxation Corporate Taxation Capital Gains Taxation Real Estate Taxation Inheritance & Gift Taxation Other Taxation

11. Individual Taxation Income Tax Scale Income Brackets (in €)Tax Rate 0 - 12,0000% 12,001 – 16,00018% 16,001 – 22,00024% 22,001 – 26,00026% 26,001 – 32,00032% 32,001 – 40,00036% 40,001 – 60,00038% 60,001 – 100,00040% More than 100,00045% Directly connected to the collection of receipts of expenses Income up to €12,000 shall collect receipts to the amount of 10% of the income Income more than €12,000 need to collect 30% of their income on receipts

12. Individual Taxation The non-taxable amount of income is increased by: €1,500 for individuals with one dependent child €3,000 for individuals with two dependent child €11,500 for individuals with three dependent children, increased by €2,000 for each additional child. Non-residents: are allowed to avail of deductions and credits, if: they are residents of EU member states and 90% of their worldwide income is from Greek sources. are liable to pay taxes on their income from Greek sources. are liable to pay a surtax of 5% on income up to €12,000; unless they are residents of EU member states and 90% of their worldwide income is from Greek sources.

13. Individual Taxation Bonuses Bonuses exceeding 10% are taxed as follows: BonusTax Rate Up to € 20,00050% €20,001-40,00060% €40,001-60,00070% €60,001-80,00080% Exceeding €80,00090%

14. Individual Taxation 10% withholding tax on accrued interest of a foreign bond or coupon earned by Greek residents. EXCEPTION: Non-Greek residents having deposits in Greek banks in foreign currency.

15. Individual Taxation Deduction Expenses The total amount of medical expenses Mandatory contributions to social security funds. if the taxpayers are disabled, blind etc. 20% of the purchase price of Mutual Funds, if the fund is not sold for three years the maximum deduction can be € 3,000. Interest of loans for the acquisition of a first residence Max size of residence 120 m 2 Max loan amount €200,000. The contract of the loan shall have been signed until December 31, 2002.

16. Individual Taxation Tax Credits Hospital expenses tax credit of 20% up to 6,000€ of the expenses??? Personal Insurance expenses for life health and personal accident Tax credit of 20% up to amount of € 1,200 for unmarried and €1,200 for each spouse when the taxpayer is married. Interest of loans for the acquisition of a first residence Tax credit of 20% Max residence size 120 m 2 Max loan amount €200,000. Contract after January 1, 2003. Annual rental of the main residence and private lessons Tax credit of 20% Up to €1,200

17. Individual Taxation Tax Credits Donation and grants to the state and non-profit institutions in monetary sums Maximum of 10% on taxable income Each receipt shall be more than €100 Alimony Tax credit of 20% Maximum tax credit €600. Legal advice expenses Tax credit of 20% Maximum credit of 10% of taxable income when theoretical income is taken into account. Installation of central A/C, natural gas, solar panels Tax credit of 10% Maximum amount of expenses € 6,000.

18. Individual Taxation Rental Income Surtax Property < 300 m 2 1.5% Property > 300 m 2 3% This surtax cannot be higher than tax income. Stamp Duty Applicable to all Buildings except Houses 3.6% of the actual rental value of the property

19. Corporate Taxation According to Legal Form Societe Anonyme Limited Liabilities Company General Partnership Limited Partnership

20. Corporate Taxation SA & Ltd Non-distributed profits are taxed as follows: Dividends taxation: 40% Fiscal YearTax Rate 201024% 201123% 201222% 201321% 201420% Tax advance: 80%

21. Corporate Taxation SA & Ltd Capital accumulation tax 1% on the share capital any increases thereof payable once upon the registration of the company and upon the approval of any capital increase.

22. Corporate Taxation General & Limited Partnerships 25% tax rate on profit unless the partners are individuals 20% tax rate The 3 unlimited partners with the highest participation (not legal entities) get a «business fee» according to their share. This fee is calculated on 50% of the company’s profits and is deductible from the taxable income of the company. The business fee is taxed at the progressive rate of the new tax scale with other personal income.

23. Corporate Taxation General Rules Income from immovable property 3% additional tax rate This additional tax cannot exceed the tax calculated of the company’s income. The tax is paid in 8 equal monthly instalments The main exceptions from the above taxation are the following: Profits from the operation of ships under the Greek flag by Greek companies. Such profits are subject to specific taxation on ship owner’s profits. When profits are distributed they are not taxed. Subject to reciprocity, profits made in Greece by foreign enterprises from the operations of ships under foreign flag and aircrafts.

24. Corporate Taxation Taxable Income Net income calculated by deducting expenses and depreciation. Allowable deductions usually include business expenses. Depreciation is based on the acquisition value. Companies may choose the straight method or declining method.

25. Corporate Taxation Taxable Income Deductible expenses shall fulfill the following criteria: shall relate to the business activity. shall be recorded in the book entries of the year which deduction is claimed. shall be supported by all necessary documentation in line with the law.

26. Tax losses may be carried forward for five (5) consecutive years in order to be set off against income of that time period. Corporate tax losses generated in another country maybe set off only against foreign source income. All these losses comes from corporation’s books and records and are in full compliance with the “code of books and records”. Corporate Taxation Tax Losses

27. Capital Gains Taxation Shares of Listed Companies For shares of companies listed into the stock market acquired from January 1, 2011 onwards: 20% withholding tax on capital gain for the short- term (until 3 months) trade of shares 10% withholding tax on capital gain for the medium-term (within 12 months) trade of shares There is no capital gain tax in case of more than 12 months trade of shares

28. Capital Gains generally regarded as ordinary income taxed at 20% for corporations and partnerships Capital Gains = Selling Price - Book Value. Gains from the sale of parts of a limited liability company are taxed at a flat rate of 20% Capital Gains Taxation Shares of Non-Listed Companies

29. Value-Added Tax Standard Rate 23% Lower Rates Newspapers, magazines, books and theater tickets 5.5% Goods considered to be essential items (food, pharmaceuticals, transportation, electricity, etc) 11% The rate is further reduced to 16%, 8% and 4% for taxpayers established in the Dodecanese and in other islands of the Aegean except Crete

30. Real Estate Taxation For Individuals For years 2010, 2011 and 2012, for property value exceeding € 5,000,000 a 2% tax rate is imposed. Value of Property ( €) Tax Rate 0 – 400,0000% 400,001 – 500,0000.1% 500,001 – 600,0000.3% 600,001 – 700,0000.6% 700,001 – 800,0000.9% Exceeding 800,0001%

31. Real Estate Taxation For Legal Entities Tax Rate of 0.6% value no less than 1€/m2. Tax Rate of 0.3% or 0.1% depending on non-profit making character of the entity and the use of property. For years 2010, 2011 and 2012 a 0.033% tax is imposed on taxable real estate for self-used real estate of hotel enterprises without applying the minimum limit of 1€/m2.

32. Real Estate Taxation Transfer Tax This transfer tax is applicable both to individuals and to legal entities. Old buildings All real estate transfers are subject to tax at a rate of 8% until € 20,000 - part of sales price and 10% for the excess amount. New buildings Only VAT applicable

33. Inheritance and Gift Taxation Type of Category (based in the degree of kinship) Taxable Scale ( € ) Tax Rate CATEGORY “A” (spouse, child, grand-child, parents) 0 – 150,0000% 150,001 – 300,0001% 300,001 – 600,0005% Above 600,00010% CATEGORY “B” 3rd or higher degree of kinship with the deceased (brother, sister, step-mother, step-father, father/mother-in-law, etc) 0 – 30,0000% 30,001 – 100,0005% 100,001 – 300,00010% Above 300,00020% CATEGORY “C” All others heirs or legatees not included to previous categories 0 – 6,0000% 6,001 – 72,00020% 72,001 – 267,00030% Above 267,00040%

34. Other Taxation Tax on Transfer of Shares Listed Shares Listed shares on the Athens stock exchange are subject to 0.15% tax out the transfer value until the end of 2010. Non-listed Shares Transfers of non-listed shares are subject to 5% income tax to the relevant transfer value. This transfer value cannot be lower the result of a calculation according a decision issued by Ministry of Finance.

35. Other Taxation Dividends, Royalties & Interest Dividends 40% tax rate Royalties & Interest Greece enjoys a transitional regime Withholding tax on interest and royalty payments effected between associated EU companies  Tax rate of 5% until June 30, 2013 In case the EC Directive and DTA do not apply, withholding tax on Royalties is 20% Interest is 40% 25% on remunerations or royalties paid to foreign companies with no permanent establishment in Greece as well as to foreign companies that undertake studies and designs etc. in Greece

36. Other Taxation Service Fees 20% withholding tax Tax on TV Advertisements 20% tax rate Compensation for the interruption of the employment relationship are subject to income taxation as follows: € 0 – 60,000 0% € 60,001 – 100,000 10% € 100,001 – 150,000 20% More than € 150,000 30%

37. Audit Requirements The companies subject to audit are the companies that for two years in a row fulfil two (2) of the following criteria Total assets > €2,500,000 Annual revenue > €5,000,000 Employees > 50 (average number) during the accounting year

38. Thank you If you need any further information, please contact: info@prooptikiltd.gr