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Establishment of Companies in Greece

            The commercial relations between Greece and CIS countries go a long way back. Provided that a number of certain conditions are complied with, the Greek legislation grants special no less opportunities for foreign nationals to start and conduct business in the country, providing them with the right to participate in the management of the enterprise as well as with the right to own in full company’s capital and company’s securities. Thus, both individuals and legal entities are entitled to be founders, managers, directors, board members, legal partners, shareholders of the relevant types of companies, established in Greece under the current legislation.

            Taking into account specific features and characteristics of each activity type, it is necessary to decide,  which of organisationall and legal entity forms to give preference to, from the economic feasibility point of view, and primarily to decide whether to choose an individual or a corporate form of business for the beginning of one's enterprise.

            So, let’s talk of the forms of business enterprise, which are the most popular and wide-spread for foreign businessmen in Greece.

            The form of individual business is particularly widely used, because of its obvious advantages, which involves freedom to choose permissible activities, methods and, to some extent, the size of production, which is absolutely suitable for small and medium-size businesses and enterprises. Individuals have the right to be engaged in entrepreneurial activities without being obliged to form a legal entity as an individual entrepreneur, as well as to create legal entities on their own or jointly with partners. With respect to business activities carried out without the formation of a legal entity, the rules and regulations, which are governing the activities of legal entities, are applied. An individual entrepreneur is responsible for his obligations with his personal property. For conducting an individual entrepreneurial activity, a third country national will need a special residence permit, which is issued subject to certain prerequisites and certain economic means.

            In the event that the type of activity requires more extensive development, the corporate form of business is more suitable. In this case, an enterprise or an organization belongs to two or more persons, establishing partnership relations between them, which are determined depending on the type of the company that is being established.

            The main forms of a corporate enterprise in Greece are a limited liability company and a joint-stock company.

            The joint-stock company (Ανώνυμη Εταιρεία, abbreviated as AE) is the most common legal form of enterprises for large companies in Greece. Foreign companies often use this form when establishing subsidiaries and affiliates. The founders are responsible for the obligations of the joint-stock company only within the limits of its property. The pre-established share capital is divided into shares. The organizational and legal form of AE is chosen not only by large firms, but also by medium and small enterprises. There is a minimum authorized capital of AE in Greece and just one founder is actually enough for the opening of AE.

            Now we could move on to the description of the functions of the Limited Liability Company (Εταιρεία Περιορισμένης Ευθύνης, abbreviated EPE). This organizational and legal form of activity is increasingly attracting the attention of small and medium-sized enterprises. Due to the reform of the Greek legislation on joint-stock companies, ΕΠΕ is becoming an increasingly popular alternative to the joint-stock company. Compared to AE, limited liability companies have the advantage of lower authorized capital, but at the same time have the disadvantage of not being anonymous: the information data concerning each founder, including those who acquire shares in the EPE after its foundation, is published.

            Another type of corporate business is represented in the form of Private Capital Company (Ιδιωτική Κεφαλαιουχική Εταιρία, abbreviated ΙΚΕ). This is a relatively new form of commercial organization in Greece, which can be formed by one or several persons. The charter has the form of a private contract. The requirements for the share capital are minimal and limited to one (1) euro. The responsibility of the founders is commensurate with their contributions to the authorized capital and does not extend to the personal property of the partners. The duties of the founders in the company's activities are divided according to the capacity and resources of each and every one of them. This form of management is especially convenient for the family business and for young entrepreneurs. The transfer of the company's legal address outside the country can be permissible, but the activity of the company registered in Greece continues to be regulated by local legislation.

            I would like to particularly single out in a special way quite pertinent idea for the corporate business that grew topical in Greece, i. e. - the form called Shipping Company (Ναυτιλιακή Εταιρεία Πλοίων Αναψυχής, abbreviated as ΝΕΠΑ). The matter at hand here is a trading company, the sole purpose of which is to purchase, operate or manage pleasure-type vessels flying the Greek flag. The authorized capital of the company is formed by the founders in the amount of not less than ten thousand (10,000) euros. According to the charter, ΝΕΠΑ is managed by a board of directors, which consists of at least three members, regardless of whether they are shareholders of the company or not. The joint-stock company and limited liability company can be transformed into ΝΕΠΑ, however the change in the organizational and legal form of the shipping company itself is not allowed by law due to the impact of a simplified tax policy on it.

            From the point of view of the advantages of taxation and long-term business development for third-country nationals, the most beneficial action for a foreign company is the establishment of a branch or subsidiary in the territory of Greece.

            As a rule, the process of documentary preparation and the procedure for registering a branch or a subsidiary of a foreign company takes place and is accompanied by a lawyer. It is important to initially know the legal subtleties of the execution of documents in the country that provides territorial and tax preferences for the implementation of economic activities.

            Along with the director of a branch of a foreign company, residence permit in Greece can also be issued for members of his family: spouse, or underage children. The first residence permit is issued for a period of two years, with a subsequent extension for three years.

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