Types of Companies and Business Entities in Greece
Business activities in Greece can be carried out within the framework of various types of business entities, the most prominent of which in Greece are:
- General Partnership – A partnership consisting of at least two individuals. The partners are responsible for all the company’s liabilities, irrespective of their investment size. However, assets and/or profits are divided according to the agreement between the partners.
- Limited Partnership – Similar to a general partnership, the main difference lies in the liability of the partners. Limited partnerships have two types of partners: limited and general. Limited partners finance the partnership and are liable up to the amount of their investment. The general partner assumes full responsibility for the partnership’s duties and acts as its sole manager.
Both general and limited partnerships are suitable for small businesses providing professional services.
- Limited liability company – This is the most common form of business entity in Greece. The company’s authorized capital consists of shareholders’ investments, and their liability is limited to their invested amount. Note that the costs of setting up and operating an LLC in Greece are significantly higher than the global average.
- Joint Stock Company – In this entity, the company’s capital is divided into shares. Shareholders’ liability is limited to their investment amount. The board of directors manages the company’s business activities. It’s important to note that this entity is considered a commercial company even if its primary purpose isn’t commercial activity.
- Private company – The capital is held by a private entity or a limited number of partners and does not include public shareholders. To become a partner, one must purchase at least one share from the company. Partners’ liability is limited to the number of shares they hold, and these shares cannot be publicly traded.
- Branches and representative offices – If you are not interested in establishing a full-fledged company in Greece but still wish to have a presence in the country, Greece permits the creation of either a branch or a representative office of a foreign company within its borders. This presence can take the form of a local branch office or involve the foreign company taking control of a Greek company through shareholding. These business entities aim to facilitate a range of business activities for foreign companies in Greece, including management, operations, brokerage, and leasing. Additionally, they serve as a platform for assessing future business opportunities in the country.
When considering starting a business in Greece, it is crucial to consult local professionals to understand the tax, legal, and regulatory implications. Our firm has extensive connections with accountants and lawyers in Greece who assist our clients in business setup, bank account opening, asset purchasing, and more.
To read more about Types of companies in Greece and their formation Click here.
How to register a company in Greece
In Greece, starting a business involves a series of administrative, legal, and economic steps. The first step for aspiring business owners is to choose an appropriate business entity that aligns with their company goals.
Once you have decided on the business entity, it’s crucial to ensure that your desired company name is available. The chosen name must be approved and registered with the General Chamber of Commerce.
The next step involves drafting the company’s articles of association. This document should outline the purpose of the company and must be written down. For some business entities, the articles of association must be notarized to complete the registration process. Additionally, you’ll need to open a business bank account and deposit the required initial capital, in accordance with the selected business entity’s requirements.
Your company must be registered with the relevant local Chamber of Commerce as well as the Global Markets Entity Identifier (GEMI). Upon registration, your company will receive a registration number, which is essential for conducting any official transactions. Moreover, you must register your company with the local tax office (DOY-Internal Revenue Service) to obtain a tax identification number, which will be necessary for all your future tax obligations.
Certain sectors like healthcare, restaurants, tourism, and real estate may require specific licenses or permits by law. Therefore, it’s important to consult with the relevant administrative authorities to obtain any necessary permits.
Although the process for setting up a company in Greece may seem complicated, the entire operation can usually be completed in just a few days. However, it’s highly recommended to seek professional advice from lawyers or accountants at the outset to expedite the bureaucratic procedures efficiently and professionally.
Establishing a company in Greece provides access to both international and European markets. So, despite the administrative complexities, the potential benefits make the effort well worth it.
Benefits of registering a company in Greece
One of the most significant advantages of registering a company in Greece is its membership in the European Union. This means that your business will operate under tailored trade and tax regulations shared among EU member states. For business-to-business (B2B) transactions within the EU, the Value Added Tax (VAT) mechanism is commonly applied, simplifying the taxation process. Moreover, EU guidelines aim to prevent double taxation on profits transferred between countries, streamlining investment management across the Union.
Another benefit is Greece’s network of double taxation treaties with various countries, including Israel. These treaties prevent double taxation on different types of income and may reduce the withholding tax rates on dividends, royalties, and interest paid in the treaty countries.
Following the economic crisis that the country has experienced over the past two decades, the Greek government, in cooperation with the European Union, offers a wide range of incentives to attract foreign investment. These incentives are especially targeted towards sectors such as tourism, energy, and the environment. They may include significant tax reductions and state-backed financing options. Additionally, Greece is one of the most popular tourist destinations in the world, offering substantial business opportunities, particularly for companies operating in the tourism sector.
For details on the tax treaty between Greece and Israel and other tax incentives in Greece, click here.
To navigate the registration process most efficiently, it’s advisable to consult professionals experienced in Greek business regulations. Our firm offers comprehensive services in setting up a company in Greece, among other areas. Contact us, and we would be delighted to arrange an introductory meeting with you.
