SETTING UP BUSINESS GREECE 2024

General Aspects

Location: South - Eastern Europe

Area: 132,049 sq. Km.

Neighbors: Greece is a country in southeastern Europe with thousands of islands throughout the Aegean and Ionian seas. Its neighbors in the north with Albania, North Macedonia and Bulgaria, in the northeast with Turkey.

Capital city: Athens

Other major cities: Thessaloniki, Piraeus, Patras, Heraklion, Larissa, Volos, Ioannina

Membership: in the European Union since 1981 and part of NATO since 1952

Population: 10.482.487 (2021 ELSTAT survey)

Religion: most Greek Orthodox Church, minority of Greek Catholics.

Climate: The climate in Greece is typical Mediterranean, mild and rainy winters, relatively warm and dry summers and, generally, extended periods of sunshine throughout most of the year

Natural resources: Bauxite, from which aluminum is produced, deposits of asbestos, nickel, magnesite, marble, black coal, and lignite (brown coal).

Legal Forms of Business Entities

The most frequently used forms of enterprises in Greece

Legal form Feature

Anonimi Etairia (A.E.)

(Societe Anonyme

S.A)

Form of Government: Parliamentary Republic. The President, elected by Parliament every five years, is Head of State. The Prime Minister is Head of Government. The Ministerial Council, consisting of the Prime Minister, Ministers, Deputy Ministers and Ministers without portfolio, is the collective decision-making body that constitutes the Government of Greece.

Currency: EURO

Gross Domestic Product (GDP): The gross domestic product (GDP) growth in 2022 was 8.4%, with 2023 growth estimated at 5.6%

Unemployment rate: The unemployment rate in Greece is forecast to 9.25% in 2024. The unemployed people in Greece is forecast to 0.87m in 2024. The employment rate in Greece is forecasted to 52.32% in 2024. The total labor force in Greece is forecasted to 5.78m in 2024.

Phone prefix: +30

National Holidays 2024: October 28th The Ochi day, December 25th Christmas Day, December 26th Synaxis of the mother of God, January 1st New Years Day, January 6th Epiphany, March 18th Clean Monday (Movable), March 25th Independence Day, Orthodox Good Day (Movable), Orthodox Easter Monday (Movable), May 1st Labour Day, Holy Spirit Monday (Movable), August 15 Assumption Day.

The shareholder’s liability is limited to the amount subscribed in the company’s share capital. The minimum share capital is 25,000.00 Euro.

The nominal value of a share cannot be less than 0.04 Euro and more than 100 euro. The number of shareholders of a Societe Anonyme can be at least one (1). The Members of the Board of Directors must be at least three (3), but there can also be a singe-member BOD - Administrator. The shareholder’s liability is limited to the amount subscribed in the company’s share capital.

Remarks

In the past a Societe Anonyme had to be incorporated before a Notary Public.

According to the latest Law, if the standard form of AoA is used, then the online services of the Companies Registry (E-YMS) suffice and a Notary Public is not required, except when it is otherwise provided for in the Law (in cases of contribution in kind of real-estate property etc.).

According to Article 17 4548/2018 a contribution in kind (e.g. real estate) against share capital is provided. A Certified Auditor is needed to verify and valuate the contribution in kind.

Private Capital Company (IKE)

Eteria Periorismenis Eythinis (EPE) (Limited Liability Company- Ltd)

General Partnership (Omorithimi Eteria –O.E) /Limited Partnership (Eterorithmi Eteria –E.E)

The shareholder’s liability is limited to the amount subscribed in the company’s share capital. The minimum share capital is 1 Euro. The nominal value of a share cannot be less than 1 Euro. The number of shareholders of an IKE can be at least one (1) and the company can be administered by at least one (1) administrator.

The shareholder’s liability is limited to the amount subscribed in the company’s share capital. There is no minimum required share capital. The mumber of shareholders of an EPE can be at least one (1). The EPE can be administered by one (1) administrator.

The incorporation of an IKE is done through the standard AoAs and online services (E-YMS) of the Companies Registry, except as otherwise provided for in the Law (in cases of contribution in kind of real-estate property etc.)

Branch Office

The partners of a General/Limited Partnership must be at least two.

In case of a General Partnership the partners are liable with their own personal property for the debts of the company, whereas in the case of a Limited Partnership only one partner may be liable with his personal property and the other only with his contribution in the company. There is no minimum share capital required. If the company remains with one partner and provided that no new partner will enter the partnership, the company will be dissolved and the dissolution will be published with the General Commercial Registry within two months

Branches are corporate entities with no legal status, set up by Greek or foreign companies. The branches of foreign entities are subject to registration with the competent Commercial Registry, Chamber of Commerce and the Tax Authority.

Branches do not have their own share capital. They shall appoint at least one legal representative in Greece, file a tax return, pay taxes in Greece for income arising from their activities in Greece, their profit may be credited or remitted to the parent company without being subject to WHT and in general are part of the parent company.

In principal an EPE had to be incorporated before a Notary Public. According to the latest Law, if the standard form of AoA is used, then the online services of the Companies Registry (E-YMS) suffice and a Notary Public is not required, except when it is otherwise provided for in the Law (in cases of contribution in kind of real-estate property etc.).

Organizational Questions

Topic Feature

Commercial Register Companies of all legal forms of the Greek legislation must be registered with the Companies Registry. The Companies Registry (GEMI) is administered, with some exceptions, in electronic form (http://www.businessportal.gr/).

Chamber of Commerce

Bank Account

Remarks

The financial statements of the companies must be published in GEMI, otherwise the Company will be subject to suspension.

Visa, Residence and work permit

Every company will have to be registered with the respective Chamber of Commerce according to its activities and place of seat and will have to renew the subscription annually if it needs its services.

To open a bank account, companies need to submit full legalization documents, such as , an excerpt from the commercial register for the incorporation and the representation of the company, the articles of association of the company etc., as well as identification documents, such as, ID/Passport, utility bills, Tax Identification Number etc., for all bank signatories, authorized bank account users, and beneficial owners.

All EU citizens can set up a business in Greece.

Non-EU nationals may get a work and residence permit in Greece under certain conditions, i.e. if they are executives of a company established in Greece by foreign shareholders or in case of a branch of a foreign company. The duration of the permits differ according to the category permit for which each individual applies. The issuance of a type D Visa precedes the application of a residence permit.

Employment

Topic Feature

Labour law

In Greece there is a very detailed employment legislation. In general, a minimum of 20 days of paid holidays a year for a 5-day work week is guaranteed, in addition to public holidays.

Normal working hours are 8 hours per day and 40 hours per week. In certain professions there are statutory limits on working time due to health and safety regulations. The paid days holidays are increased to 22 after the third year of employment and 25 days after 12 years of employment. There are also flexible working solutions like part time work, definite term employment (provisional work, seasonal work), secondment solutions mainly within groups of companies, secondment solutions from employment agencies, job rotation, on-call work etc.

Social System Basic Social Security Contributions within the framework of employment:

Main Pension Contributions : 36.66% applied on the monthly gross salary (14.12% paid by employees and 22.54% paid by employer)

Taxation Tax Feature

Corporate Income Tax

Personal Income Tax

The standard corporate income tax rate is 22% on all taxable earnings of the corporations. Mainly this tax rate applies to S.A., EPE, IKE, OE, EE, and other legal entities.

The Personal Income Tax Rates (employees, freelancers, individual business, pensioners) are the following:

Remarks

An income tax advance of 80% is applied which is payable and offset the following year.

Special Solidarity Contribution

Withholding Tax (WHT)

Value Added Tax (VAT)

The one-off compensation due to the termination of the employment relationship (severance compensation) is taxed independently, according to the following scale:

0-60.000 tax rate 0%

60.000-100.000 tax rate 10%

100.000-150.000 tax rate 20%

Over 150.000 tax rate 30%

Dividends : 5%

Interest : 15%

Royalties: 20%

Standard VAT rate : 24%

Dividends distributed by Greek company to a foreign shareholder are not subjec to WHT if the shares are maintained by the shareholder at least 24 months and the participating percentage is above 10%.

Reduced VAT rate: 13% still applies to raw products (meat, chicken, fish, milk, fruits, vegetables, oil etc), flowers. fertilizers, hotel and home care services, etc and 6% mainly applies to pharmaceutical products, electricity, gas, books, theatre and cinema tickets etc;

Lesvos, Chios, Samos, Kos and Leros have reduced VAT regime with a 30 percent discount on VAT rates (17%, 9% and 4% respectively)

Imports are subject to VAT at the same rates as the domestic supply of those products. When the imported products are re- exported, VAT is refunded.

Real Property Tax a. Income of individuals from real estate property (€) Tax Rates %

b. Income tax rate of companies from real estate property 22%

c. Transfer Tax Rate of Real Estate Property: 3,09% on the agreed price or on the regulated price, whichever is higher including municipality fee. The tax burdens the buyer.

d. ENFIA

The annual unified real estate tax (ENFIA) is imposed annually on real estate property in Greece, owned by individuals and legal persons. The legal rights that are subject to the ENFIA are the following:

• full and bare ownership;

• usufruct;

• preserved occupation;

• surface rights;

• exclusive use of a parking spot, auxiliary space and pool; and

• (in exceptional situations) possession and occupancy rights.

In cases of co-ownership, each owner pays according to his/her percentage. In the case of a usufruct, the allocation of tax is defined according to the age of the bare owner and the beneficiary of the usufruct. If the beneficiary of the usufruct is not an individual, the tax attributable is equal to 80% of the full ENFIA.

ENFIA is calculated based on coefficients relating to the surface, the usage, the year built, the floor, the location of the real property (regulated rates per area). There is also supplementary tax imposed on the total value of the real estate property at a rate depending on the value of rights and the usage of the property.

Non-resident Taxation

Non-resident individuals and companies in Greece receiving income generated in Greece are subject to Greek Income Tax Code. In case of application of Double Taxation Treaties taxation of this income maybe avoided according to the provisions of each DTT between Greece and the other countries.

Greece has introduced non-dom regimes with tax incentives for Non residents who wish to transfer their tax residency to Greece. To qualify for the Greek non-dom tax regime, you must:

Invest at least €500,000 in Greece directly or indirectly, through a majority-owned company.

Finalize the investment within 3 years from filing the relevant application.

Be a non-Greek tax resident for the 7 out of the last 8 years.

If you transfer the tax residence in Greece the following are the benefits from the non-dom residence scheme:

Flat annual tax of €100,000 on the global income earned outside Greece.

Flat annual tax of €20,000 for each additional family member.

No obligation to declare any income earned outside Greece.

Exemption from inheritance and donation tax for assets located outside Greece.

Full implementation of double tax treaties between Greece and other countries.

The non-dom regime lasts for a maximum of 15 years. It may be terminated at any time if:

The tax- payer do not pay the tax obligations.

The tax-payer decide to withdraw.

Alternative taxation regime for relocated employees

For tax years beginning on or after 1 January 2021, a new regime for the alternative way of taxing income from salaried employment, as well as from business activity arising in Greece, for individuals transferring their tax residence to Greece, is available.

For inclusion in this regime, and exclusively for the filling of new jobs, the individual transferring their tax residence to Greece is subject to favourable taxation for the income from salaried employment obtained in Greece, if cumulatively:

1. was not a Greek tax resident for the previous five of the six years prior to the transfer of one’s tax residence to Greece

2. transfers one’s tax residence from an EU member state or EEA country or from a country with which an administrative cooperation agreement in the field of taxation with Greece is in force

3. provides services in Greece in the context of an employment relationship with a Greek legal entity or with a permanent establishment (PE) of a foreign company in Greece, and

4. declares that one will remain in Greece for at least two years.

If the taxpayer’s application is accepted, an exemption from income tax is provided for 50% of one’s employment income / income from individual business activity earned in Greece during the tax year. Furthermore, for individuals subject to the alternative taxation provisions, the annual deemed income will not apply to the amount resulting from the residence or passenger car. This is also very important.

The application for the transfer of the tax residence and the inclusion in the new regime is filed to the Tax Administration by the individual as follows:

For the commencement of service/business activities that takes place by 2 July of the year in question, the application shall be submitted by the end of that year and shall be considered for said year. If the taxpayer applies within the year following the assumption of service or commencement of operations, the application shall be considered for the taxpayer’s inclusion in the special tax regime for the year following the assumption of service.

For an assumption of service or commencement of operations that takes place after 2 July of the year of relocation, the application shall be submitted by the end of the following year and shall be considered for the taxpayer’s inclusion for that year.

The provisions on alternative taxation shall apply to the income of the tax year for which the individual files one’s application and expires after a total of seven tax years, with no possibility of further extension.

This guide has been prepared by EUROFAST, an independent member of Antea

EUROFAST

Leof.Andrea Syngrou 236.,(4th floor)

Kallithea 17672, Athens, Greece

Tel: +30 210 8257 720

athens@eurofast.eu

www.eurofast.eu

Mallorca, 260 àtic 08008 – Barcelona

Tel.: + 34 93 215 59 89

Fax: + 34 93 487 28 76

Email: info@antea-int.com

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