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02 September 2019
An important consideration before doing business in Greece is choosing the most suitable corporate entity. A number of parameters may play an important role in making the correct choice, including:
Greek law offers several corporate entity options, which will be immediately familiar to investors with a continental European legal background and somewhat familiar to investors with an Anglo-Saxon background. A one-stop service is available (with limitations) for the incorporation of all company types, provided that they use basic (ie, template) articles of association; however, there are no 'off-the-shelf' companies in Greece. This article outlines the basic types of Greek corporate entity (excluding maritime entities).
Partnerships (L4072/2012 Article 249 et seq) include:
The partnerships legislation was amended recently by L4072/2012, although it maintains a strong association with the companies chapter of the Civil Code (PD 456/1984, Article 741 et seq).
General partnerships involve the unlimited personal liability of the partners as a whole and inter se.
In a limited partnership, there is at least one general partner (with unlimited liability as above) and limited partners with liability limited to their contribution. Limited partners may not be involved in the administration of the company; if they perform administrative acts, they automatically acquire general partner status.
Partnerships are cheap and easy to set up and run. Notwithstanding the liability, the upside is simplified bookkeeping (up to a certain level of turnover) and single-tier taxation (corporate tax only and tax-free distributions) irrespective of turnover. Greek and foreign legal entities can form and administer partnerships; this is not unusual in specific purpose joint ventures (eg, construction joint ventures).
Limited liability companies include:(2)
Greek EPEs resemble the French and Italian SaRL, the German GmBH and other similar EU company types. The law on EPEs was recently amended for the first time in 63 years by L4541/2018; however, the amendments left much to be desired. The basic characteristic of an EPE is the survival of the partnership element, by a dual voting system (decisions are reached by majority of the number of partners and by majority in the capital participation). Although several aspects of EPEs such as the dual voting requirement make this company type prima facie unattractive, they can be beneficial in cases where the balance of control or the security implied by the requirement of notarial acts for statutory amendments (also the change of statutory administrators) are important. EPEs are also interesting for tax purposes in jurisdictions which favour the partnership element (as regards foreign participations of their tax residents).
IKEs were introduced by L4072/2012 to cover the need for a versatile, low-cost, fast-to-incorporate and simple-to-run commercial entity with limited liability devoid of partnership elements. An IKE is a hybrid company type, somewhere between a limited liability company and a joint stock company. Due to their flexibility and low cost, IKEs are increasingly popular.
Joint stock companies (L4548/2018) include:(3)
After almost a century and several patches, the law on joint stock companies, CL2190/1920, was replaced by L4548/2018 from 1 January 2019. The new law incorporates almost all applicable EU legislation on joint stock companies.
The Greek joint stock company is in the same family of companies as the French société anonyme. the Italian SpA, the German AG and most other similar continental European company types. The law offers a considerable amount of flexibility for shareholders to tailor articles of association according to their needs. There is little need for shareholders agreements and other external arrangements, as most matters dealt with in such agreements can be directly incorporated in the articles of association of the company, with immediate effect. The new law also introduces several simplifications for very small and small companies, including:
Foreign companies can establish branches in Greece, which will be subject to few corporate obligations regarding their establishment and administration. In all other respects (eg, tax and employment), branches are subject to the same legislation as domestic entities. Branches cannot take advantage of tax treaties to avoid double taxation.
For further information on this topic please contact Dimitri N Cocalis at Cocalis & Partners by telephone (+30 210 361 3661), or email (firstname.lastname@example.org.). The Cocalis & Partners website can be accessed at www.cocalispartners.gr.
The materials contained on this website are for general information purposes only and are subject to the disclaimer.
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Dimitri N Cocalis