How to open a company in greece

A Complete Guide to Open a Company in Greece

Starting a company in Greece has become an increasingly attractive option for entrepreneurs and investors. With its strategic location bridging Europe, Asia, and Africa, Greece offers access to over 450 million EU consumers. The country’s economic growth rate reached 3.5% in 2023, while foreign direct investment soared to €6 billion, highlighting its rising appeal. Additionally, Greece boasts some of the lowest labour costs in Europe, making it a cost-effective destination for new businesses. In this blog post, we will learn about the step-by-step process of opening a company in Greece and navigating its business landscape effectively.

Understanding the Business Landscape in Greece

Greece has made significant strides in its economic recovery, offering a more favourable environment for businesses. After years of financial challenges, the country has achieved steady growth, with Gross Domestic Product (GDP) expanding consistently in recent years. This growth is supported by government initiatives to foster a more business-friendly climate.

Key industries in Greece include tourism, agriculture, shipping, and technology. Tourism alone accounts for a significant share of the national income, drawing millions of visitors annually. The government has also prioritised technology and innovation, incentivising startups and foreign companies to invest in the sector.

Infrastructure improvements funded by the European Union have strengthened the country’s transportation networks, making it easier to access key markets. Coupled with incentives such as tax breaks for foreign investors, Greece has become a hotspot for entrepreneurs looking to establish a strong foothold in the region.

Types of Business Entities in Greece

Sole Proprietorship

A sole proprietorship is a straightforward option for individuals looking to start a small-scale business in Greece. This entity is owned and operated by one individual who bears unlimited liability for business debts. Sole proprietors benefit from simplified tax procedures, making it an appealing choice for freelancers and small businesses.

Limited Liability Corporation (EPE)

An EPE is a popular choice for small and medium-sized enterprises. It requires a minimum share capital of €4,500, divided into shares. This structure protects shareholders by limiting their liability to the amount of capital they have contributed. The EPE also involves statutory financial reporting, which adds a layer of accountability and transparency.

Private Capital Company (IKE)

Introduced in 2012, the IKE is a flexible corporate form that requires minimal capital, often as low as €1. This structure offers limited liability to its members, making it particularly attractive for startups. The IKE allows members to contribute to the company in various forms, such as cash, property, or labour.

Stock Corporation (AE)

The AE is suitable for large-scale enterprises that require significant capital investment. With a minimum share capital of €60,000, this entity is ideal for businesses planning to engage in public trading. An AE must have a board of directors and adhere to strict financial reporting requirements.

Partnerships

General partnerships (OE) and limited partnerships (EE) are viable options for collaborative ventures. These structures do not have minimum capital requirements and typically involve at least two partners. While general partnerships have shared liability, limited partnerships offer liability protection for certain partners.

Branch Offices

Foreign companies can establish a branch in Greece to expand their operations. Branch offices must register with Greek authorities and appoint a local representative. This option allows international businesses to operate in Greece without creating a separate legal entity.

Steps to Open a Company in Greece

Choose a Business Structure

Selecting the appropriate business structure is the cornerstone of registering a company in Greece. This decision affects your business’s operations, tax obligations, and liability protections.

Consider factors such as the scale of operations, desired liability limitations, and long-term growth plans. Consulting a legal or financial advisor during this step can help ensure your choice aligns with your business objectives.

Secure a Company Name

Securing a company name is a pivotal step in the registration process and reflects your brand identity. Greek regulations require the name to be unique and free of potential conflicts with existing businesses. Begin by brainstorming a name relevant to your business and appealing to your target market. Then, check its availability through the General Commercial Registry (GEMI) database. This ensures that your chosen name complies with legal standards and is not already in use. If your preferred name is unavailable, GEMI may suggest alternatives, or you can refine your choice to meet the requirements. Once approved, the name is officially reserved for your business.

Draft Articles of Association

The articles of association serve as the backbone of your company’s legal framework. These documents detail essential information such as the business’s objectives, ownership structure, decision-making processes, and operational guidelines. The articles must be drafted in Greece and adhere to specific legal requirements. They are typically prepared with the assistance of a legal professional to ensure compliance. Key sections include the rights and responsibilities of shareholders, rules for appointing directors, and guidelines for profit distribution. Once completed, the founders must sign these articles and notarise to validate their authenticity before submission.

Register with GEMI

Registering with the General Commercial Registry (GEMI) is a mandatory requirement for all businesses in Greece. GEMI is the central business entity database, promoting transparency and regulatory compliance. This step involves submitting the articles of association along with supporting documents, such as proof of identity for the founders, the reserved company name approval, and any other required certifications. Registration ensures that your business is legally recognised and listed in the public registry. Once approved, GEMI issues a unique registration number, your business’s official identifier in Greece.

Obtain a Tax Identification Number (TIN)

A Tax Identification Number (TIN) is essential for conducting all financial and legal activities in Greece. Without a TIN, your business cannot file taxes, open a bank account, or engage in commercial transactions. To obtain a TIN, visit the local tax office with the required documents, including your company’s registration certificate and personal identification. The process involves filling out an application form and providing information about your business’s activities. It is crucial to ensure the accuracy of the submitted information, as errors can delay the issuance of your TIN. Once obtained, the TIN must be used in all tax-related dealings.

Open a Business Bank Account

A business bank account is fundamental for managing your company’s finances and ensuring smooth operations. In Greece, businesses must maintain a local bank account for paying taxes, processing employee salaries, and managing vendor payments. To open an account, you need your company’s registration certificate, TIN, and proof of the directors’ identities. Some banks may require additional documentation, such as a business plan or references. Take the time to compare banking options, as fees and services can vary significantly. A well-chosen bank account can streamline your financial management and improve cash flow efficiency.

Social Security Registration

Registering with the Greek social security system is a legal obligation for all employers. This step ensures compliance with labour laws and facilitates contributions to employee benefits, such as pensions, healthcare, and unemployment insurance. To register, submit your business’s details and employee information to the relevant social security office. You will receive a registration number that must be included in payroll filings and tax documents. Employers are responsible for deducting social security contributions from employees’ salaries and remitting them to the authorities. Staying compliant with these requirements avoids legal penalties and fosters employee trust and satisfaction.

Steps to Open a Company in Greece with Costs and Timeline

Navigating Tax and Legal Requirements

Businesses operating in Greece must comply with a comprehensive framework of tax and legal regulations. Understanding and adhering to these obligations is essential to ensure smooth operations and avoid legal penalties.

Corporate Tax Obligations

Greece imposes a corporate tax rate of 22% on net profits, which applies to all registered businesses, regardless of their size or industry. This tax is calculated annually and must be paid in instalments as per Greek tax regulations. In addition to corporate tax, businesses that distribute profits to shareholders are subject to a 5% dividend withholding tax. This applies to both domestic and international shareholders, ensuring fair revenue collection for the state.

Value Added Tax (VAT)

VAT is another significant tax requirement for businesses in Greece. The VAT rates range from 6% for essential goods such as medical supplies and books, to 24% for non-essential items and services. Businesses must register for VAT at the time of company registration and file VAT returns regularly. Depending on the industry, reduced VAT rates of 13% may apply to specific goods, such as food products and hotel services. Accurate record-keeping and timely filings are crucial to avoid penalties.

Additional Taxes

Certain industries and business activities are subject to additional taxes in Greece. For instance, companies owning real estate must pay property tax, which is assessed annually based on the property’s value. Other taxes may include special levies for specific sectors, such as tourism or shipping. Consulting a tax advisor familiar with Greek regulations can help businesses manage these obligations effectively.

Employment Law Compliance

Employment laws in Greece are robust and aim to protect employee rights. Employers must comply with regulations concerning minimum wages, working hours, overtime payments, and employee benefits such as paid leave and social security contributions. The minimum wage is reviewed periodically by the government to ensure fair compensation. Contracts must clearly outline the terms of employment and adhere to these legal standards.

Financial Reporting and Audits

Certain business structures, such as limited liability companies (EPE) and stock corporations (AE), must maintain detailed financial records and undergo regular audits. Certified professionals conduct these audits to ensure compliance with accounting standards and transparency in financial dealings. Annual financial statements must be submitted to the relevant authorities, including the General Commercial Registry (GEMI) and tax offices.

Staying Updated

Greece’s tax laws and legal regulations are subject to change, and businesses must stay updated to remain compliant. Regular consultations with legal advisors, accountants, or professional service providers can help companies to navigate these complexities. This proactive approach ensures smooth operations and reduces the risk of legal or financial issues.

Hiring Employees in Greece

Hiring in Greece is relatively straightforward due to the availability of a skilled and multilingual workforce. With an unemployment rate of approximately 12.5%, businesses have access to a large talent pool. Labour costs in Greece are among the lowest in Europe, making it an economically viable option for employers.

Recruitment typically involves advertising positions through local job boards or agencies. Employers must provide written contracts detailing the terms of employment, including salary, working hours, and benefits. Compliance with labour laws is essential to avoid legal issues and ensure a productive workplace.

Benefits of Using a Professional Service Provider

Navigating the complexities of company registration in Greece can be daunting for foreign investors and entrepreneurs. Professional service providers, such as company formation agencies and legal consultants, can simplify this process significantly. These experts offer end-to-end assistance, ensuring compliance with local regulations while saving time and resources.

Employer of Record (EOR) Solutions

For businesses not planning to establish a legal entity in Greece, EOR solutions are a practical alternative. An EOR manages all employment-related responsibilities, including compliance, payroll, and tax filings. This allows companies to focus on their core operations while mitigating the risks associated with local labour laws.

Virtual Office Services

Virtual office services provide businesses with a registered office address in Greece, a crucial requirement for company registration. These services often include mail handling, meeting space rentals, and administrative support, enabling businesses to maintain a professional presence without needing physical office space.

Common Challenges and Solutions

Bureaucratic Hurdles

One of the most common challenges in opening a company in Greece is bureaucracy. The registration process often involves multiple steps and interactions with various government agencies. To overcome this, hiring a local consultant or using professional services can streamline the process and ensure all requirements are met efficiently.

Language Barriers

For non-Greek speakers, the language barrier can be a significant obstacle. Legal documents and government communications are often in Greek, making it challenging to navigate the system. Employing a bilingual consultant or translator can alleviate this issue and ensure accurate understanding and compliance.

Compliance with Local Regulations

Greek regulations are detailed and vary depending on the type of business entity and industry. Missing deadlines or failing to meet specific requirements can result in fines or legal complications. Regular consultations with legal advisors or accountants can help businesses stay updated on regulatory changes and maintain compliance.

Access to Banking Services

Opening a business bank account in Greece can be time-consuming, especially for foreign entrepreneurs. Banks require comprehensive documentation and may have stringent requirements. Partnering with a professional agency specialising in company formation can simplify this step by liaising with banks on your behalf.

FAQs

How much does it cost to register a company in Greece?

The cost of registering a company in Greece depends on the business structure. A Private Capital Company (IKE) can start with a minimum capital of €1, while a Stock Corporation (AE) requires at least €60,000. Additional costs include legal fees, registration charges, and notary expenses.

What is the most profitable business in Greece?

Tourism-related businesses are among the most profitable in Greece due to the country’s high visitor numbers. Other lucrative industries include agriculture, renewable energy, shipping, and technology startups, all benefiting from government incentives and market demand.

How long does it take to open a company in Greece?

It typically takes 7 to 14 days to register a company in Greece. The timeline depends on the business structure, availability of required documents, and the efficiency of the General Commercial Registry (GEMI) and tax authorities.

How much is business tax in Greece?

The corporate tax rate in Greece is 22% of net profits. Businesses must also account for other taxes such as Value Added Tax (VAT), which ranges from 6% to 24%, and a dividend withholding tax of 5% for distributions to shareholders.

Do foreigners pay taxes in Greece?

Yes, foreigners pay tax in Greece if they earn income. Tax obligations depend on residency status and the type of income earned. Non-residents are taxed only on Greek-sourced income, while residents are taxed on worldwide income.