How to establish a business in Greece
In the past five years there have been significant changes made which simplify procedures for the establishment of a business in Greece. These procedures have contributed greatly to a vigorous effort for attracting foreign and investments.
Introduction
In Greece there are a variety of different legal entities for doing business. Foreign entities can establish a Greek company or a foreign branch for the purpose of operating in Greece. They can also join a co-partnership with another enterprise or establish a head office in Greece with Law 89 in order to provide services to their mother company or any other related company that needs a representative office Greece. In addition, individuals can operate as freelance professionals.
A company with a registered office in Greece (except for Law 89) is a Greek company, even though all of its members may be foreign.
Taxation in Greece has to do with the type of entity and can be explained extensively in accordance with the enterprise.
Anonymous Company
An anonymous company is a corporation with limited liability for each shareholder up to the amount contributed to the share capital by that shareholder. This company is similar to the French “Société Anonyme” and is typically used by the largest Corporations in Greece.
An establishment of an anonymous company is carried out by a Notary Public, who is operating as a One-Stop Authority. The Notary Public submits all necessary documents to the appropriate authorities and undertakes all requirements to deliver the company completed. The whole procedure takes only a few days.
After completing the registration process with the Commercial Registry, the company is established and ready to begin work.
The company will acquire a VAT number when the Notary Public finishes its involvement in the process and the accountant or CEO of the company will take over from there.
An anonymous company needs only one person to act as a founding shareholder. It can have more shareholders if that’s desirable. The articles of association will be signed by the shareholders, which can be individuals or any kind of legal entities. The minimum amount for share capital is 24.000 euro, which will be deposited at the bank after the registration of the company.
The Board of Directors jointly oversee the activities of the company and must consist of at least three members who are elected by the shareholders at general assembly. The day-to-day management of an anonymous company is carried out by the Chief Executive Officer.
LTD or LLC – (Limited Liability Company)
A Limited liability company is an entity which has been mostly abandoned when Private Capital companies were established. This type of company works as a partnership with limited liability for the owners. Although it has less bureaucracy than an anonymous company, it does not have the option to become listed, as well as some other options. Partners are liable up to the amount of their capital contribution, and it is necessary that all the partners be insured for social security, whether they are managing directors or not. Similar types of companies are French Sarl and German GmbH
This type of company is seldom used anymore because Private Capital companies are easier and more efficient to set up. These companies cost less to establish and are convenient for small or medium sized operations or when anonymous companies are not necessary.
The establishment of an LTD company is carried out by a Notary Public who is acting as a One-Stop Authority. The Notary Public will finalize the tax registration of the company and will also publish the articles of association to the commercial registry.
Limited liability companies can be established by one or more partners and there are no minimum capital requirements. The capital must be deposited to the bank account of the company after establishment.
An LTD company is represented by one or more administrators, but it is not necessary that these administrators be partners of the company. The general assembly can also elect an employee to be an administrator.
Private Capital Company – (PC)
The Private Capital Company was established in 2012. This type of company has many advantages. There is no need for a Notary Public; a private agreement containing all the articles of incorporation is sufficient.
It has much in common with the anonymous company and has less bureaucracy. Private capital companies also have a great advantage in that partners can participate in the company without making a capital contribution. They can contribute “sweat equity” or personal work product or other products of value towards capital contribution. The means and methods of valuation of capital contribution are valued, evaluated and agreed upon by the shareholders or partners.
The private capital company has no minimum capital requirement. It has limited liability and can also be a single person company.
A private capital company is represented by one or more administrators who must also be partners. The general assembly can also elect employees as administrators.
Personal Unlimited Partnership- (OE)
A personal unlimited partnership is an entity in which all the partners are fully responsible for the debts of the entity with their personal estate, without limitation.
These kinds of entities are normally used by small enterprises with low risk exposure, having low cost and are easy to handle. An article of association is necessary and is also established through a One-Stop Authority to the general commercial registry.
Personal partnership has no minimum capital requirement and is administered by one or more partners.
Personal Limited Partnership – (EE)
A Personal Limited Partnership is exactly the same as an unlimited partnership except for the liability of the limited partners, which is limited to their contributed capital. However, it is necessary to have at least one partner with unlimited liability. Limited liability partners are unable to be administrators.
Single Entrepreneurs/Freelancer Professionals
Entrepreneurs may operate in Greece individually as freelancers. Especially professionals such as lawyers, and brokers, etc. They can operate individually as a business, being fully liable for any and all debts and obligations which may occur.
Establishment of a Foreign Company Branch
Establishment of a foreign company in Greece can be accomplished through establishing a branch, which acts like a Greek company but needs certain documentation, such as: Articles of Association of the foreign company (which must be translated with Apostile), Certificate of good standing, etc. Also, foreign branches need a legal representative in Greece. It is not necessary for said representative to reside in Greece, however, it is necessary for an authorized person to receive correspondence in Greece.
After registration at the general commercial registry and receiving a vat number at the competent tax office, the foreign branch will act as the mother company or as a Greek company.
Liabilities for the representatives in Greece are exactly the same with members of a board of directors at an SA.
Branch for shipping companies / Law 89/1967 office or Law 27/1975
Foreign shipping entities may establish an office under the law 89/67 or a company under the provisions of Law 27/1975, Greek or foreign flagged. Law 89/67 has the purpose of providing (to their head offices or to their foreign affiliates), consulting services, repairing services, accounting support, central data processing services and can also expand to business administration, quality control of production, project planning services, advertising and marketing services. There is an obligation of minimum personnel for Law 89 entities of at least 4 persons. The office is also required to import foreign exchange through bank remittances of at least EUR 100 000. Under the article 25 of Law 27/75 shipping companies can establish an office in Greece for several activities related to the operation, management, chartering and etc, for Greek or foreign flagged non-passenger ships greater than 500 registered tons. Offices under Law 27/75 can represent foreign ship owning companies or other foreign companies with shipping activities. The office is also required to import foreign exchange through bank remittances of at least EUR 100 000.
