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Establishing the right company in Greece

company's establishment in Greece

It is a frequent statement that in latter years Greece has become a location where various investments take place. It can also be stated that important legislation, relevant to finance, taxation, import & export, land acquisition, business establishment and function, European or International important legal provisions etc., has been adopted and implemented in order to create and provide the adequate environment for these investments to take place. Hence, to realize and make the investment feasible, it is significant for the investor to determine which vessel shall be established and used for this realization. Thus, the company via which the business will get started and run is an important factor of success.

Consequently, a reference to the forms & types that Greek Company’s legislation foresees and allows to be established is useful. The categories that exist are mainly divided in two basic ones: firstly, the type of private company in the form of Personal General Unlimited (OE) or Limited (EE) Partnership and secondly, the Companies that are divided into either parts – participants and/or shares – shareholders, such as Limited Company (EPE), Private Company (IKE), Société Anonym (S.A.). In further detail:  

Private Capital Company ( PC – IKE) 

General Information

It is the most recent type of company that has been established in the Greek legislation in 2012 and actually serves the purpose of a modern type of co operations and business management with many advantages. In detail:   

  • A form of limited partnership in which the capital is consisted of share parts. However, it is important to state that it is the only type of company that other elements, but capital contribution, establish partnership and provide the person with a partner’s identity, such as previous experience, know how knowledge and expertise, property as the company’s establishment, clientele or financial portfolio In other words, partners can participate in the company without making a capital contribution per se but by contributing ‘sweat equity’ or personal work product or other type of contributions, tangible or intangible, towards capital contribution. The means, worth and methods of valuation of this type of contribution in reference to the capital contribution are valued and agreed upon by the partners and afterwards referred to in detailed proportion and percentage in the Letters of Association of the Company. 
  • The company has no minimum capital requirement.     
  • The Private Capital Company is represented by one or more administrators instead of the board of directors. The administrator might be a partner simultaneously or an employee and the decision actually depends upon the discretion of the partners. 
  • The company is governed by its articles and memorandum of association and its accounts must be published.
  • Statutory audit requirements as per EU directives.
  • A single partner can control and represent this form of incorporation.
  • Double entry accounting and reporting system.
  • Management’s and Partners’ Liability is limited
  • Is  very  similar  to  EPE  with  the  difference  that  is  not  obliged  to  the  formalities governing the EPE, it is a more flexible to administer form of company and the setup costs are lower than EPE.
  • Needed time for incorporation: The procedure is electronic and immediate. However, time might be spent for the issuing and selection of all mandatory documentation.
Pros and Cons

A Private Company is subject to the same corporate tax, and in general the same taxation treatment as a SA and also as the Ltd, type of companies.

The main significant differences between PC and  the two types of companies ( SA and LTD)  is the shorter time period required for the incorporation.

The main significant difference between PC and SA is the absence of the minimum required capital for the Private Company.

On the contrary the absence of minimum required capital for PC implies more reduced solvency and credit rating than SA .

IKE – Private Company Incorporation Package

Business founders need to submit a certified copy or copies of their IDs or their passport. They also need to request to send notice to the Insurance Organization (EFKA) with regard to the company’s establishment. The following steps are made electronically. 

  • Establishment of the company through the General Commercial Register
  • Drafting of the statute of the company (Articles of Association)
  • Drawing up of the required documentation and declarations
  • Issuance of the certificate stating the absence of tax and insurance debt, if required
  • Issuance of the TIN number for the company and the founders
  • Check of the name and the distinctive trade name
  • Submitting all the necessary documentation and declarations in order to register the company in the General Commercial Register
  • Submitting all the necessary documentation in order to register the legal representative in the Social Insurance Registry (if needed)
  • Payment for all the provided fees required for the company establishment (General Commercial Registry, Social Insurance Registry, Chamber’s Subscription Fee etc)
Limited Company (Ltd – Llc – EPE)

It is the well known type of a limited partnership with the capital consisting of share parts. This type of company actually has the features of a partnership and a corporation. It also constitutes a convenient form of organization for both small and medium enterprises. It was a type of company that a large number of businesses chose to establish.   

After the introduction of Private Capital Company (IKE) in Greek legislation, Ltd  company type was not preferred anymore and a vast number of business moved towards the Pr. Company. This is phenomenon pushed to the change of Ltd in year 2018 and nowadays the two type of companies are very similar. In detail we may refer to the following key points:  

~ The procedure is completed electronically in the respective service “General Electronic Commercial Registry” (in Greek: Γ.Ε.ΜΗ. – Γενικό Εμπορικό Μητρώο).

~ The company, after lots of alterations, has no minimum capital requirement. ~ The Company is represented by one or more administrators instead of the board of directors. The administrator might be a partner simultaneously or an employee and the decision actually depends upon the discretion of the partners. 

~ EPE is governed by its articles and memorandum of association and its accounts must be published.

~ Statutory audit requirements as per EU directives.

~ A  single  partner  can  control  this  form  of  incorporation or an employee, no board of directors requirement. 

~ As stated by its title the Members (partners) have limited liability.

Pros and Cons: 

Generally speaking a Limited Liability Company has the same characteristics as a Private Company and is treated by the tax legislation the same way.

However, nowadays, the Private Company is mostly preferred due to its smooth way of incorporation and less publication needs

Société Anonyme (SA)

A Société Anonyme, Anonymous Company, is a corporation with limited liability for each shareholder up to the amount contributed to the share capital. Again, this type of company the latter years (i.e. 2018 and onwards) has faced numerous alterations to all legal prerequisites for each establishment. In the past, an establishment of an anonymous company was carried out by a Notary Public who was operating as a One Stop Authority. Nowadays, such a prerequisite does not exist and a SA may be established via easier methods. It is necessary to submit all necessary documents electronically to the appropriate authority (GEMY) as above mentioned and since all necessary requirements are met the company is completed and established. 

An anonymous company in Greece might be directed and represented by one person as a founding shareholder. In other words, SA does not need a Board of Directors or a number of shareholders. One shareholder might perform the whole company’s management, directorship and representation. Of course, it can have more shareholders if that’s desirable, in which case the Articles of Association will be signed by all shareholders regardless of their percentage, which can be either individuals or any kind of legal entities. The minimum amount for share capital is that of 25.000 € which will be deposited at the bank after the registration of the company and shall be declared by a decision of the Shareholder/s. In addition:     

  • A limited liability company with either bearer or registered shares
  • One or more natural or legal persons.
  • The procedure takes place electronically in the respective service “General Electronic Commercial Registry” (in Greek: Γ.Ε.ΜΗ. – Γενικό Εμπορικό Μητρώο).
  • Minimum  capital  requirements  of  € 25,000.
  • Statutory  audit  requirements  as  per  EU  directives.  (Any  two  of  the  following three  factors:  Turnover  over  €  8.00  m,  total  assets  over  €4.00m  and  over  50 people staff).
  • A one person S.A> company can be formed.
  • Double entry accounting and reporting system.
  • Needed Time of incorporation immediate. 
Pros and Cons

The S.A. (Societe Anonyme) is usually preferred by enterprises that have provision for high turnover and also that aspire to get in the Stock Exchange.

There is a need for at least 25 000 euros capital.

This corporate type is considered more trustworthy by the banks due the existence of the capital.

Personal Unlimited Partnership / Personal Limited Partnership (OE & EE)

There are 2 types of partnership: General partnership and limited partnership.

A personal unlimited partnership (OE) is an entity in which all the partners are fully responsible for the debts of the entity with their personal estate, without limitation. These forms of companies were 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 the general commercial registry authority. 

A personal limited partnership (EE) is very similar to the unlimited partnership except of the liability of the limited partner/s, which is limited to his/their contributed capital. Still, it is absolutely necessary to have at least one partner with unlimited liability for this company to be established. Limited liability partners are unable to be administrators and directors of the company.    

  • The establishment of a general partnership requires the cooperation of at least two parties that are mutually obliged in pursuing a common commercial purpose.
  • The agreement between the parties (the partners) must be filed by General Electronic Commercial Registry” (in Greek: Γ.Ε.ΜΗ. – Γενικό Εμπορικό Μητρώο).
  • For the formation of a general partnership it is not required a notarial deed; only a private agreement is needed.
  • The partners can be either equally liable as per their capital contribution (OE) or one partner can have unlimited liability and the rest of the partners no liability (EE).
  • In addition, a specific minimum amount of share capital is not required.
Pros and Cons: 

General Partnerships are usually chosen by small and medium-sized enterprises, where personal involvement prevails the capital factor. 

The main disadvantage of such companies is establishing a personal, jointly and severally, liability in all General Partnerships for the debts of the company to third parties (certainly including the government and public entities). Only Greek and European Nationals, as well as Third Country Nationals holding the required residence permit may participate as equal partners in this corporate form.

General Notes: 

In order to participate or to form a company we should have in mind the following useful details:

Founders/shareholders: full name, profession, domicile and nationality.

The company name: the company name may either be formed by the name of one or more of its shareholders / partners etc., or by the business object and in all cases must include the additional designation “Ltd – Llc – Pr.Co. – SA ..”.

The registered office: must be established within the area of a Greek municipality or community.

The object of the company: i.e. the kind of business that it will conduct. A specific form of company may not carry on business that according to the law is conducted only by another type of company, i.e. banking and insurance business is provided by companies in the form of S.A. only.

The duration of the company: The company is formed for a fixed period, as stipulated in the statute and then terminates business or may it continue without a fixed duration. 

The contribution of each founder and the type/kind of contribution

Registration and Publication Electronic Procedures

The announcement of the registration and a summary of the deed containing the names of the partners, the company name, the registered office, the object of the company and the capital, the way of representation of the company etc. must be published, under the supervision of the partners or the managers, in the General Archives of Companies GEMY as above mentioned.  

Establishment of a foreign company in Greece can be accomplished through various ways. One of these ways is by 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 and stamped with Apostile), Certificate of good standing, etc. In addition, foreign branches need a legal representative in Greece. After registration at the general commercial registry and receiving a vat number the foreign branch may act as the mother company or as a Greek company. 

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