Doing business in Greece

Most business activity in Greece is conducted by corporate entities and there is great variety of corporate types. Shareholders residing abroad will generally opt either for the S.A. type or for smaller businesses the P.C. type. The past few years there has been great improvement in the speed of forming a company and one can actually incorporate one in a matter of 2-3 days once the required documentation is submitted. The basic corporate types and legal forms to conduct business are the following:

Corporate types or legal forms for carrying out business in Greece

A: Personal Companies

General Partnership (G.P./ in Greek “E.”)
Association of two or more (natural or legal) persons.
No minimum capital requirement.
Partners personally and severally liable for the company’s obligations.
Partners personally liable, i.e. with their personal assets, without any limitation for the company’s obligations without any limit.
Decisions pertaining to corporate issues taken under unanimity unless the articles of association (AoA) provides for majority.
Company is managed only by partners.
Company is represented only by partners.
If not specifically provided in the AoA, the management and representation is undertaken by all partners individually.
Legal personality and publicity by its registration with the General Commercial Registry (G.E.MI.).
Incorporation: electronically when standardized “Model AoA (articles of association)” is used. Otherwise, established either by proceeding to file at the GEMI “one-stop-shop” premises of the competent Chamber of Commerce or by proceeding to file at a Notary Public who acts as “one-stop-shop”.
Single-entry bookkeeping (unless turnover threshold of EUR 1,5 million is exceeded).

Limited Partnership (L.P./ in Greek “E.”)
Same with general partnership, with the following exceptions:
At least one limited partner and one general partner.
That limited partner who paid out its contribution is not personally liable for the company’s debt. Otherwise, the limited partner is liable up to the amount of his contribution. The general partner still enjoys personal and unlimited liability.
Company is managed only by the general partner.
Company is represented by the general partner. In the event the AoA provide that the limited partner represents the company, he is personally liable and, for any action of representation he performs unless he provides that the other party was aware that he was a limited partner.
Publicity, establishment same with G.P.
Single-entry bookkeeping (unless turnover threshold of EUR 1,5 million is exceeded).

Joint Venture
Union of persons, legal capacity and bankruptcy ability.
In principle does not enjoy legal personality and is considered as a “de facto” general partnership.
Civil society legal provisions apply as well as general partnership provisions by analogy.
Members are individually, severally liable and without any limitation.
Mandatory G.E.MI. registration If commercial activity performed, in which case it is availed with legal personality and the provisions on general partnerships apply.
Single-entry bookkeeping (unless turnover threshold of EUR 1,5 million is exceeded).

B: Capital Companies

Limited Liability Company (L.L.C or T.D, Single Member L.L.C or L.T.D./ in Greek “E.Π.E.” and “Μονοπρόσωπη Ε.Π.Ε.” respectively)
Commercial company.
Established by one or more natural/legal persons.
It is forbidden to a natural or legal person to participate in more than one Single Member L.L.C.
A Single Member L.L.C. cannot participate in another Single Member L.L.C.
No minimum capital requirement.
Company’s capital divided into parts.
Limited liability of all partners.
Company is managed and represented by the administrator(s)/managing director(s). If not specifically provided in the AoA, then the management and representation is undertaken by all partners acting jointly.
Company’s administrator is personally and severally liable and without any limit for the company’s tax and social security debt due for payment for the first time during his term or following a settlement act before the respective authorities (more specific tax and social security provisions apply).
Important decisions (amendment of AoA etc.) may only be taken by the Partners’ Assembly.
Incorporation: (a) by a notarial deed where the notary acts as a “one stop shop” service or (b) electronically by a private document using the standardized “Model ΑοΑ” at G.E.MI.
Double-entry bookkeeping.

Private Capital Company (P.C., “Single Member P.C.”/ in Greek “Ι.Κ.Ε.” and “Μονοπρόσωπη Ι.Κ.Ε.” respectively)
A simpler and more flexible corporate form than the L.L.C.
Suitable for SMEs.
Established by one or more natural/legal persons.
No minimum capital requirement.
Limited liability of all partners.
Company is managed and represented by the administrator(s)/managing director(s). If not specifically provided in the AoA, then the management and representation is undertaken by all partners acting jointly.
Company’s administrator is personally and severally liable and without any limit for the company’s tax and social security debt due for payment for the first time during his term or following a settlement act before the respective authorities (more specific tax and social security provisions apply).
Important decisions (amendment of AoA etc.) may only be taken by the Partners’ Assembly.
Incorporation: electronically when standardized “Model AoA (articles of association)” is used. Otherwise, established either by proceeding to file at the GEMI “one-stop-shop” premises of the competent Chamber of Commerce or by proceeding to file at a Notary Public who acts as “one-stop-shop”.
Double-entry bookkeeping.

Public Limited Company – Société Anonyme (S.A.) (A.E) (“Single Member S.A”)
Ideal for medium and large enterprises.
Minimum initial capital of EUR 25,000.
Company’s capital divided into shares.
Only nominal shares.
Limited liability of all shareholders.
Company is managed and represented by the Board of Directors with at least 3 members. It is possible for the BoD to assign its powers to specific persons (even if outside the BoD). Alternatively, it is possible to appoint a sole Managing Director.
Company’s legal representatives are personally and severally liable and without any limit for the company’s tax and social security debt due for payment for the first time during his term or following a settlement act before the respective authorities (more specific tax and social security provisions apply).
Important decisions (amendment of AoA etc.) may only be taken by the Shareholders’ Assembly.
Incorporation: (a) by a notarial deed where the notary acts as a “one stop shop” service or (b) electronically by a private document using the standardized “Model ΑοΑ” at G.E.MI.
Double-entry bookkeeping.

C: Other

Branch of a foreign company in Greece
Established through registration with G.E.MI.
At least one legal representative shall be appointed.
Company’s legal representative is personally and severally liable and without any limit for the branches’ tax and social security debt (more specific tax and social security provisions apply).
When the “parent company” resides in a third country and has the form of an S.A., then the minimum capital of EUR 25,000 shall be satisfied at the “parent” company level.
Same tax and accounting obligations with their “parent company” (e.g. a branch of an LLC/LTD or S.A. will have double-entry bookkeeping).
Profits taxed at the same rates applicable to domestic companies.
Other corporate types dictated by EU law such as (a) European Economic Interest Grouping (“EEIG”), and (b) the European Company (“Societas Europaea” or “SE”) which are not frequently followed in practice.
Other specific corporates types and legal forms such as (a) Shipping Company (Law 959/1979), (b) Office/Branch of foreign shipping entities of Law 27/1975, (c) Office/Company of Compulsory Law 89/1967, (d) Limited partnership by shares, etc.
Depending on the company’s activity there are sector-specific corporate law provisions adjusted to the S.A. (e.g. credit institutions, leasing companies, factoring companies, credit companies, electronic money institutions, guarantee institutions, collective investment funds (and their subcategories), S.A.s with securities listed in a regulated market, sports companies, road transportation companies etc.) or the LLC corporate type (e.g. road transportation companies).
An individual may also pursue business activity without using any of the abovementioned corporate entities or legal forms. In that case he/she shall register at the competent registry and tax office.

Licensing

Depending on the activity pursued by an enterprise, an establishment permit and an operation license may be required. In some cases, specific (sub)licenses may be required to lead to obtaining an establishment permit and an operation license. An establishment permit is required in limited instances, usually when the activity entails higher risk to health and safety of persons, the environment and goods. The licensing procedure has in general been improved the past few years and is mostly carried out through notifications to the competent authorities (by electronic means as well). In other words, once the notification has been made, the enterprise may pursue the licensed activity and is not required to expect for the scrutiny on the documentation filed and perhaps an inspection. If, however, following such a scrutiny or inspection, the authority verifies that the conditions of licensing were not met, the enterprise shall immediately cease the activity under license and face the penalties provided by law for carrying out an activity without complying with the licensing rules. In other limited cases, a prior scrutiny of the petition and documentation or even an inspection of the installation is required before the enterprise commences its activity under license.

Taxation

Residence: A company incorporated under Greek Law or that has its registered seat in Greece or its place of effective management in Greece (real seat doctrine) at any time during a tax year is considered resident for tax purposes in Greece for that tax year.

Taxable income: corporate tax is imposed on a company’s total net annual profits before the distribution of dividends. Normal business expenses are deductible for tax purposes, provided they are not included on a list of nondeductible expenses, are incurred within the ambit of the company’s operation, and reflect real transactions that are recorded in the books in the year incurred.

Corporate income tax rate is 24% for income earned and generally applies to all forms of legal entities in Greece as well as income generated in Greece by branches.

Dividend withholding tax rate is 5% (reduced from 10%) for dividends received on or after 1 January 2020.

Other Rates:
Business income and employment income are taxed at progressive rates from 9% to 44% (the lowest rate applies on income not exceeding EUR 10,000, while the highest rate applies on income exceeding EUR 40,000). Tax deductions are envisaged for employment income (if certain conditions are met, business income may be considered as employment income).
Special solidarity contribution is envisaged for any kind of income that natural persons earn in addition to income tax and with rates from 0% to 10% calculated on the person’s total income (the lowest rate applies on income not exceeding EUR 12,000, while the highest rate applies on income exceeding EUR 220,000). Especially for 2020, no special solidarity contribution is due apart from employment income whereas in 2021 only employment income will be exempted from solidarity contribution.
Tax incentive scheme in place for foreign tax residents that (a) receive employment income, (b) constitute high net worth individuals-investors (EUR 500,000 investment is required) and (c) pensioners receiving pension abroad. Once the tax residence is transferred to Greece, the (a) category is availed with 50% reduction on the tax due for the employment income, the (b) category is taxed with EUR 100,000 for all its income generated abroad and the (c) category is taxed with 7% on its pension income received from abroad. Any other income generated in Greece is taxed based on the general provisions.
Interest is taxed at a rate of 15%, and royalties at 20%.
Rental income is taxed at progressive rates from 15% to 45% (the lowest rate applies on income not exceeding EUR 12,000, while the highest rate applies on income exceeding EUR 35,000).
Capital accumulation tax is set at 1%. This is usually levied in case of capital increase.
Basic stamp duty is set at 2,4% or 3,6% depending on the parties’ capacity.
For property taxes on real estate see section for “Real Estate” hereinunder.
Value Added Tax: The standard VAT rate is 24%, the reduced rate is 13%, and the super-reduced rate is 6%.
Filing & Disclosure requirements: Filing of annual tax income statements for businesses usually take place by June 30^th. Publication of annual financial statements is required for capital companies and takes place by September 30^th (the deadline for the annual shareholders’ or partners’ meeting approving the financial statements is September 10^th) It is possible that the State provides for extension of the said deadlines.

Money laundering

Law 4734/2000 transposed the 5^th AML Directive (Directive 2018/843/EU).
Companies shall register their ultimate beneficial owners at the UBO registry and keep record certifying UBOs.

Employment law framework

The employment agreement does not have to be in writing, unless required by law, however, the employer shall announce the commencement of the employment relationship by the competent authority and shall notify the employee in writing, within two months of the commencement of the employment relationship, of the material terms of the employment contract.
Full time employment is considered that of rendering work for 40 hours weekly, 8 hours daily per 5 days or if permitted by sector specific legislation 6 hours and 40 minutes daily, per 6 days. Overtime is compensated and the additional to the wage, compensation rate, varies, depending on the excess of hours per day, per week and per year as well as if prior notification requirements are met.
Minimum monthly salary is set at €650 gross (i.e. includes the employee’s social security contribution and excludes the employer’s social security contribution that is also due based on the gross wage). For workers, the minimum daily salary is set at EUR 29.04. The minimum salary varies in case there is a collective agreement (business specific, sector specific and/or profession specific) in place that the business is obliged to follow. Work experience till 14 February 2012, signifies higher minimum salary depending on its duration. The employer is liable to withhold the employee’s social security contribution from the wage and pay the social security fund (EFKA) the entirety of the social security contributions (employee’s and employer’s contributions).
The employer shall pay the monthly salary as well as the Easter benefit (½ of the monthly salary), the leave benefit (½ of the monthly salary) and the Christmas benefit (corresponding to an additional monthly salary). Therefore, the employer’s employment cost is 14 times the monthly salary.
Indicatively the employee’s social security contribution from 1/1/2021 is 14.12% of the gross wage and the employer’s contribution is 22,54% of the gross wage (i.e. 36.66% in total). The contribution may vary depending on the employee’s specialty.
Employees are eligible for vacation leave at a full pay. Employees that are working 5 days a week are entitled to a minimum of 20 prorated days of leave once employed for one full year (6 days working employees are entitled of 24 days). Employees working less than 12 months are entitled to a respective fraction of that duration. For the second year of work, employees are entitled to the abovementioned leave and once they complete 12 months of employment, the leave rises to a total of 21 (6 days working employees are entitled of 25 days). For the third year of work, employees are entitled of leave to a total of 21 or 22 days depending on whether the have completed 24 months at the same employer (6 days working employees are entitled of 25 or 26 days respectively). For the fourth year and thereafter, employees are entitled to a total 22 days (6 days working employees are entitled of 26 days) Employees with 10 years of service for the same employer or 12 years of service with any employer, are entitled to 25 days leave per year (6 days working employees are entitled of 30 days respectively).
For the first three days of sick leave, employees are generally entitled to 50% of wages owed. Employees are eligible for sick pay leave from social insurance beginning on the 4th day of the illness.
Health insurance: employees who have worked at least 50 days within the past 15 months are generally eligible for free health and dental care through social security.
Notice of termination – payment in lieu of notice: This is only applicable to employment contracts of indefinite term. Prior notification is not required, and compensation is calculated according to the years of service at the same employer and whether a prior notification has been provided. If an employer terminates a fixed-term contract early, it must pay the employee for the remainder of the term. Employment contracts of indefinite duration shall be deemed probationary employment periods for the first 12 months from the date of effect and may be terminated without prior notice and without dismissal compensation, unless otherwise agreed by the contracting parties.
Third country nationals shall legally reside in Greece (residence permit, filing or refugee petition etc.) to be employed

Real Estate

Any foreigner can engage in a real estate transaction regarding a property in Greece (the only limitation regards the conclusion of agreements pertaining to properties or the transfer of shares/parts of companies that own properties, located in the so-called border areas, by non-EU nationals or entities residing outside the EEA, in which case the approval of a special committee is required).
The purchase procedure usually involves: (a) performance of legal due diligence (search of the title deeds before the competent cadastral office and or the land registry), (b) performance of technical survey, (c) in many instances the conclusion of a notarial pre-agreement providing a deposit (in many cases private agreements are concluded even though they are considered void since they do not bear the notarial feature), (d) issuance of a Tax Identification Number for the buyer, (e) opening of bank account (not compulsory though it is suggested), (f) issuance of all required documents and certificates by the seller and submission to the notary, (g) finalizing the draft of the notarial sale-purchase agreement, (h) signing by the parties of the property transfer tax statement, submission before the competent tax authority and payment of the transfer tax, (i) , conclusion of the notarial sale-purchase agreement (the deed), i.e. signing of the final contract before the notary.
A sale-purchase agreement for real estate property in Greece is concluded only through the signing of a notarial sale-purchase agreement by the seller and buyer (or their proxies) before a notary.
The notarial sale-purchase agreement must be registered at the competent Land Registry Office / Cadastral Office. If not, the transfer of the right of ownership (the acquisition) is not effected. The registration fee amounts to approximately 0.475% on the purchase price or objective tax value, whichever is higher. It is paid by the buyer.
Unless VAT is applicable, Property Transfer (FMA) tax applies and is set at 3.09% of the purchase price or tax objective value, whichever is higher.
When properties with building license issued after 1/1/2006 and when the seller is subject to VAT, then VAT (currently 24%) applies. However, owing to recent legislation, one can deviate from VAT rules if certain condition are met and in that case Property transfer tax (FMA) will apply.
VAT or the transfer tax is paid by the buyer.
Property (ENFIA) tax varies from EUR 0.0037 to 11,25 depending on the surface and tax value.
Companies that own real estate property are liable to pay Special Property (EFA) tax which is set at 15% of the commercial value. The purpose of that tax is to combat money laundering. There are various exceptions to that tax and in any event, companies are exempted when the company retains a file and can certify that all UBOs have a Greek TIN.
Municipal Duty (TAP) tax which is set at 0.025% to 0.035% of the tax objective value.
It shall be noted that non-EU nationals may benefit from the Golden Visa program (the buyer and his family, entitled of a renewable 5year residence permit) as long as the minimum amount of the real estate investment is EUR 250,000.

Foreign investment

Schemes in place with incentives to attract foreign investments.
No exchange controls in place.
State funding in place in certain sectors according to the programs in force.

Recognition and enforcement of judgements

Respective EU law applies.
Lugano Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters of 30.10.2007 (EU and EEA countries).
Hague Convention of 30 June 2005 on Choice of Court Agreements.
Convention on the Contract for the International Carriage of Goods by Road (CMR).
UNCITRAL Model Law on Cross-Border Insolvency of 30.05.1997.
Convention Concerning International Carriage by Rail (COTIF) of 9.05.1980, as amended by the Vilnius Protocol of 03.06.1999.
New York Arbitration Convention on the Recognition and Enforcement of Foreign Arbitral Awards, New York, 10 June 1958.
Several bilateral agreements in place (with Albania, Armenia, Bulgaria, Germany, Georgia, China, Cyprus, Lebanon, Hungary, Ukraine, Poland, Romania, successors of USSR except Estonia-Lithuania-Latvia-Georgia, successors of Yugoslavia, Syria, successors of Czechoslovakia, Tunisia).