Entering the Greek Market
The Greek Market
Foreign companies expanding into the Greece will be met with a highly educated and skilled workforce, and a recovering economy with a range of incentives for foreign investments. However, setting up shop in an unfamiliar place comes with its own challenges. Foreign businesses must comply with employment, tax, payroll, and corporate legislation whilst ensuring that their employees are working productively and efficiently. The alternative solution to overcoming these issues involves working with a Professional Employer Organization (PEO) such as Bradford Jacobs, using our Employer of Record (EOR) in-country experts to handle every aspect of compliance.
Starting a Business in Greece
Greece is in a strategic position to explore markets in Africa, Asia, and Europe. With a dominant services industry (contributing about 68% of Greece’s national GDP), as well as a rich and vibrant culture, Greece attracts 20 million tourists each year. Greece also boasts a strong shipping industry and infrastructure. Despite previous economic troubles, Greece enjoys a strong stock market – in 2019, the Athens Stock Exchange became one of the best performing stock markets in the world.
To start a business in Greece you must go through the registration procedure, which is multi-layered and somewhat complex. Greece has introduced new measures to make the establishment procedure quick and easy, but the documentation requirements are thorough.
The necessary steps to start a business in Greece include:
- Obtain a business address in Greece.
- Decide on the company type that suits the nature of your business and business goals in your new territory – The Greece Limited Liability Company (EPE), The Greece Public Limited Company (AE), The Greece Private Capital Company (IKE), or a branch.
- Have the appropriate registration documents certified by the Athens Bar Association and carry the Special Apostille of Hague Convention. The documents will also need to be translated into Greek.
- Confirm the company name and register the company with the unique registration office – GEMINET. Once approved, the company will be issued the Lawyers Welfare Fund certification, the registration number, and the Greek Business Registry (GEMI) number.
- Open a corporate bank account and deposit appropriate share capital, accompanied with the founders/shareholders’ documentation.
- File documents with the Chamber of Commerce and Industry, and once registered, will receive the company seal.
- Register with the Greek Tax Authorities and apply for a Tax Identification Number (AFM) with the local Tax Office/Internal Revenue Services (EFORIA).
- Apply for an employer’s social security number with the Unified Social Security Fund (EFKA).
- Once incorporated, file the subsidiary’s Articles of Incorporation with the Official Gazette.
- You will also need to apply for permits and residencies for employees if you would like to send employees to help set up the subsidiary.
You must also register all employees at the Manpower Employment Organization, no later than 30 days from hiring.
Expanding Business into Greece
Foreign companies expanding into Greece want to tap into an advancing economy that is renowned for its high standard of living and rapidly improving business climate. Greece is also a world leader in maritime support, and its location proves to be a great asset with access to the Asian, African, and Eastern European markets, as well as access to the EU Market. Business opportunities in Greece include tourism, shipping, security, IT, biotechnology, cosmetics, healthcare, textiles, agricultural products, renewable energy, and property management sectors. All these sectors are also opportune targets for international expansion, and can be expanded into locations such as Alexandropoulos, Athens, Heraklion, Larissa, Patra, and Thessaloniki.
Greece Business Facts
- Capital City – Athens
- Population – 10.7 million
- Regions – Attica, Crete, Central Greece, Central Macedonia, Eastern Macedonia and Thrace, Epirus, Ionian Islands, Northern Aegean, Southern Aegean, Peloponnese, Central Greece, Western Greece, Western Macedonia, Thessaly, Monastic Republic of Mount Athos.
- Official language – Greek
- Economy and world ranking – 79 in the Doing Business Rank (2020), GDP (194.38 billion dollars)
- Leading sectors – shipping and shipbuilding, tourism, food and tobacco processing, textiles, chemicals, metal products, mining, and petroleum
- Main exports – petroleum, aluminum, medicine, fruits, and nuts (fresh or dried), vegetables, (prepared or preserved) and fish (fresh or frozen).
- Main imports – crude oil, ships, boats and floating structures, petroleum products, medicine, motor vehicles, and natural gas.
- Main trading partners – Italy, Germany, Cyprus, France, Bulgaria, and Turkey
- Government – Unitary parliamentary republic
- Currency – Euro
Advantages and Challenges of the Greece Market
Advantages of expanding into the Greek market:
Low labor costs: Labor costs in Greece are low compared to other countries in the EU.
Educated workforce: Greece possesses an educated workforce – it has one of the highest numbers of degree-educated adults, according to the 2019 OECD report. Favored fields include science, technology, and engineering.
Emerging economy: Greece’s economy is on the rise, making it a considerable attraction for investors.
Language: English is the favoured language for doing business in Greece.
Trade: It is the largest economy in the Balkans and has free-trade agreements with all the Balkan nations.
Ease of Business: Reforms in Greek Law make it easier for foreign businesses to expand and set up.
Tax incentives: Reform programs for the economy have reduced corporate tax levels, dividend payments and indirect labor costs.
Travel: Due to its low cost of living expenses, high consumer spending, and strong tourism industry, Greece is a top travel destination for many around the world.
Logistics: The motorways and waterways of Greece are highly developed due to updates made with the help of EU Funds, improving trade and transport.
EU Benefits: Greece is a member of the European Union and enjoys the same trade benefits of other EU nations.
The biggest challenge facing the Greece Market now is the effects of COVID-19, like many other nations around the world. Other challenges include its recovering economy after a lengthy financial struggle, and extensive bureaucracy procedures, but recent legislation is working towards its improvement and ease of access and completion. The 100 per cent solution is to consider the alternative to setting up a subsidiary by working with Bradford Jacobs. Our PEO international recruitment specialists will find the perfect fit for the roles you need to fill. Then our Employer of Record (EOR) in-country consultants will handle all the complexities of Greece’s employment laws, tax regulations and payroll, ensuring your Greek expansion plans move smoothly and effortlessly.
Limited Company / Subsidiary or Branch in Greece
A subsidiary established in Greece is considered a legal entity separate from its parent company, with independent administration and management. There are many advantages for companies that take this route – it provides more freedom in exploring the market and enhancing international credibility.
A branch, however, is quite different. A branch established in Greece does not have independence from the foreign company, and it is not treated as a resident corporation of Greece.
The main characteristics of a subsidiary:
- A subsidiary is a legal entity in Greece, with the option of a private limited liability company (EPE) or a company limited by shares (AE), both with their own advantages.
- Benefits from independence, but majority of capital is owned by the foreign parent company.
- Subsidiaries are subject to the same taxation principles as Greek resident companies.
- Both subsidiary types require investors’ documentation and proof of capital.
- Must appoint a statutory auditor on certain requirements.
- The liability of investors is limited to the amount of their investment in the company.
Main characteristics of a branch:
- The foreign parent company must meet Greek share capital requirements.
- Foreign parent company is responsible for legal and tax affairs of the branch.
- Branch must register with the Greek authorities.
- Branch requires the minimum of one in-house director.
- Branch must also handle formal accounting requirements.
- Branches must also appoint a local representative in Greece who is liable for payment of taxation.
- A bank guarantee (possibly).
- The parent company is liable for all obligations and activities of its branch.
There are other notable differences too. A subsidiary requires its own documentation, such as its own Articles of Association, whereas a branch only needs to use the documentation of the foreign parent company. Subsidiary companies are taxed on worldwide income, and branches are only taxed on their local or Greek income.
Legal Structures for Greece Market Entry
Depending on the company structure that you choose to set up, establishing a subsidiary or branch requires meeting certain legal requirements. A subsidiary is incorporated under Greek law, whereas a branch must operate under certain local laws (taxation, social security etc.), but are incorporated under the laws of the parent company’s country and uses the company’s Articles of Association.
The legal structures of a private limited liability company (IKE or EPE) are:
- The minimum number of people required is 1 director and 1 shareholder for the incorporation of these subsidiary types, who do not have to be residents of Greece.
- The minimum share capital required is EUR 4500 for an EPE (and EUR 1 for an IKE), which must be paid at formation, with at least half of it in cash.
- Statutory financial reporting is also required, and an auditor must be appointed if the company’s annual turnover is over EUR 5 million, or the company has over 50 staff members.
- The legal requirements for a stock corporation (AE):
- The minimum share capital required is EUR 60,000 and must have at least 1 shareholder and 3 directors – residency is not required. The capital must be paid within 2 months of the business’ set-up.
- The company is also required to appoint a statutory auditor and a board of directors.
Public limited companies must also file annual financial statements and meet other local registration requirements (tax, social security, etc.).
The legal requirements for a branch:
- This company type requires at least one director and one legal representative (who must be a resident of Greece).
- Branches will also need a local bank account, tax registration and social security registration for any onboarding/recruitment.
- Branches are also required to file annual financial statements, and annual tax returns.