LEGAL PROCESS FOR ESTABLISHING A COMPANY IN GREECE

Establishing a company in Greece is an attractive opportunity, especially for foreign investors wishing to conduct business in this country, which is part of the European Union. For this process to be successful, it is necessary to follow the steps defined within the framework of Greek commercial and corporate law. Below is comprehensive information about the company formation process and legal requirements in Greece.

Company Types and Selection

Before starting to set up a company in Greece, it is important to choose the appropriate company type. The most common company types are:

1. Joint Stock Company (JSC): Suitable for large-scale investments. Minimum capital requirement is €24,000.
2. Limited Liability Company (LPC): A preferred structure for small and medium-sized enterprises, with a minimum capital of €4,500.
3. Small and Single Shareholder Limited Company (SLC): A flexible structure with no minimum capital requirement.
4. Sole Proprietorship: A structure established and directed by a single person, operated with low capital.
5. Partnerships (General Partnership – OE and Limited Partnership – EE): These are partnership structures where partners have limited or unlimited liability.

The choice of company type depends on the size of the investment, the ownership structure, and the business model.

Installation Process Steps

1. Choosing and Registering a Company Name: The first step in company formation is determining and registering a company name with the Hellenic Chamber of Commerce (GEMI). A preliminary search should be conducted to ensure the company name has not been previously used by another company.
2. Preparation of the Articles of Association: Articles of association, prepared in accordance with Greek commercial law, are central to the company formation process. These articles include important elements such as the company's management structure, capital distribution, objectives, and areas of activity. Depending on the company's structure and the responsibilities of the partners, these documents may need to be notarized.
3. Obtaining a Tax Identification Number and Registering with the Tax Office: A tax identification number (AFM) must be obtained for the company to begin operations. The company founders obtain this number by applying to the tax office. Simultaneously, the necessary records for the company's accounting system are also completed at this stage.
4. Capital Investment and Bank Account Opening: The company's capital must be deposited into an established bank account. For both joint-stock and limited liability companies, holding the minimum required capital amount in a blocked account at the bank is a requirement for completing the company's incorporation.
5. Registration with the Greek Commercial Register (GEMI): Registration with the Greek Commercial Register is mandatory for the legal recognition of a company. This registration process ensures the company is officially registered and can conduct commercial activities. Registration with the commercial register is usually accomplished by submitting a file containing incorporation documents, capital information, and the company's areas of activity.
6. Insurance and Social Security Registrations: All companies planning to employ workers in Greece are required to register with the social security system. This registration is done with the Social Security Institution (EFKA) and ensures the payment of mandatory insurance premiums for the company's employees.

Legal Requirements for Company Formation in Greece

1. Requirements for Foreign Investors: As Greece is a member of the European Union, EU citizens can establish companies in Greece without any restrictions. Non-EU citizens, however, may need to have a residence permit in Greece and meet certain investment criteria.
2. Tax Obligations: Companies operating in Greece are subject to various tax obligations, including VAT (Value Added Tax), corporate tax, and income tax withheld from employee wages. The VAT rate is generally 24%, although it may be lower in some sectors. Additionally, the corporate tax rate is set at 22%.
3. Annual Reporting and Audit Requirement: Joint-stock and limited liability companies are required to submit annual activity reports and undergo accounting audits each year. Greek commercial law mandates that companies of a certain size be audited by independent auditors.

Documents Required During Company Formation

• Articles of incorporation (may be notarized depending on the type of company),
• The company's articles of association,
• Identity documents and passports of the company founders,
• Bank statements proving that the capital investment has been made
• Application form and registration documents to the Hellenic Commercial Register (GEMI),
• Documents proving that a tax identification number has been obtained
• Social security registration documents.

Advantages of Establishing a Company in Greece

Establishing a company in Greece offers numerous advantages, particularly for investors seeking access to the European Union market. Greece's strategic geographical location provides easy access to European, Asian, and African markets. Furthermore, tax advantages and incentive programs are available in Greece, with various tax reductions and investment incentives specifically targeting foreign investors.

Conclusion

Establishing a company in Greece can be a highly advantageous process if the correct steps are followed and local legal regulations are complied with. Investors can establish their companies quickly and effectively by acting in accordance with Greek commercial law. For foreign investors, obtaining local legal advice is important to prevent potential legal problems and expedite the process.