Greece

SETTING UP IN BUSINESS

Introduction

Greece has never been a particularly fashionable destination for foreign investors. The headline rate of corporation tax is relatively high, although it has fallen in recent years and is set to drop below 30% from 2006 onwards. However there are plenty of tax-efficient business opportunities if you know your way around. We know exactly where to look.

Why is this a good time to open a company in Greece?

• massive investment in infrastructure projects, largely financed by the EU
• economy strongly boosted by Olympic Games in 2004
• Greek consumer spending is higher per capita than any other EU member

What are the main types of Greek company?

There are four main forms of Greek business entity, and they are as follows:

• limited liability corporation (EPE)
• stock corporation (AE)
• partnerships
• branches

What are the main features of an EPE company?

• the minimum share capital for an EPE company is €18,000
• must be paid up at formation, at least half of it in cash
• the minimum number of shareholders is usually two
• popular format because of limited liability
• statutory financial reporting requirement

What are the main features of an AE company?

• the minimum share capital for an AE is €60,000
• the standard format for major public companies
• widely adopted by sole proprietors because of flexibility
• board of directors and auditors required

What are the main features of a partnership?

• available either as a general (OE) or limited (EE) partnership
• foreign investors tend to prefer limited-liability EE partnerships
• minimum of two partners, no minimum share capital required, but usually €1000
• much lower level of regulatory intervention

What are the main features of a branch?

• foreign parent must meet Greek share capital requirements
• foreign parent responsible for legal and tax affairs of branch
• branch required to register with Greek authorities
• minimum of one director; no formal accounting requirements
• must appoint a local representative who is jointly and severally liable for payment of taxation
• bank guarantee may also be required

How easy is it to recruit staff in Greece?

Greece has significant unemployment and labor costs are among the lowest in the EU. The workforce is well educated however and recruitment is straightforward. It is advisable to use a local recruitment agency so contact us for help with this.

What is the regulatory environment like?

The business environment in Greece is surprisingly liberal given the country’s reputation for bureaucracy. Regulatory standards are in line with other EU member states. There are no import restrictions or tariff barriers and capital and earnings can be freely repatriated. Greece has double taxation treaties with a number of other countries. Nonetheless it is important to note that Greek tax regulations are detailed, complex and change frequently, and it is therefore strongly advisable to consult a local specialist for tax planning.

Are there financial incentives available?

The Greek government continues to offer investment incentives to promote regional development, environmental protection and energy-efficient initiatives. The scale of the incentive depends on the industry and the location, but will typically involve grants, interest subsidies or tax allowances. There are special incentives for certain projects relating to mining and tourism.

And what about banking facilities?

The Greek banking sector has changed beyond recognition in recent years. It has expanded rapidly as a result of deregulation and merger activity. Investors can choose from a range of private and state banking facilities including venture capital and finance for new companies. Private banks may offer more flexibility than their state-owned counterparts. You will need to open a bank account in Greece, and we can advise you on this.