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Create your Greek Private Company (IKE) in Greece
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How can a lawyer help with company formation in Greece?
Are you looking to form an IKE (Individual Company of Limited Liability) in Greece? As lawyers, Lexidy provides valuable assistance in the process. To get started, please fill out the form with your details and requirements.
Our legal expertise helps with various aspects of the formation process, including selecting a unique name, preparing and filing necessary registration documents, advising on legal structure, preparing contracts and agreements, ensuring compliance with Greek laws and regulations, and providing ongoing legal support.
With our guidance, you can ensure that your company is set up for success and has a strong legal foundation. So why wait? Fill out the form today to get started.
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Don’t try to go through the Greek Company Formation process on your own. Seek the help of an experienced corporate lawyer to increase your chances of success and make the process as smooth and stress-free as possible.
There are several ways of doing business in Greece, the most common being by setting up a Greek limited liability company called Greek Private Company (IKE)!
To set up a Greek Private Company, there is a list of bureaucratic and legal steps that a foreign entrepreneur must complete.
If you want to incorporate and register a Private Company (IKE) in Greece, you can find the basic steps in the following Article , along with a detailed summary of those procedures, and the estimated time and cost for each step.
What is an IKE company?
– a private limited company (PSC) acquires legal personality and is a commercial company, even if its purpose is not a commercial enterprise.
– The partners of an IΚE are not liable for its debts, but their liability is limited up to the share capital amount with which they contribute to the company.
– An IKE may also be formed by a single person (natural or legal), i.e. it may be a one-person company from the outset or may subsequently become a one-person company.
– An IKE always has capital, with a minimum amount of capital of one (1) euro, corresponding to one company share.Furthermore, its uniqueness in relation to other legal entities is that the contribution to the capital can either be monetary, non monetary, by providing services instead of money and guarantee contributions.The latter are liable for the debts of the company for three years after its dissolution.
– All capital companies, including the IKE companyhas the same tax treatment, i.e. it keeps C category books (βιβλία τρίτης κατηγορίας όχι διπλογραφικά) and its net profits are taxed with a flat tax of 22%, following the decuction of the expenses from its annual turnover(see Articles 101 § 1, 109 § 1 and 55 § 1 of Law 2238/94, as applicable after the amendments of the recent Law 4110/2013).
– The corporate type of the Private Capital Company (PCC) was introduced in 2012 by Law no. 4072/2012 and ensures legal personality by making the company established within the Greek General Chambers of Commerce, regardless of the commerciality of its purpose. Only the company with its own property and not its members is liable for corporate obligations towards third parties.- As it comes in the decision making, he corporate form of IKE provides flexibility in as the meeting can beconvened by the manager 8 days before the day of the meeting and the partners are even informed by e-mail. Yet, the company is not a prerequisite to have a board of directors for its operations, as it can only have even one person as the administrator, to sign all relevant documents and make all transaction, binding the company and on behalf of it.
Types of Business Entities in Greece
According to Greek law, a company is any association of persons whose aim is to achieve a common purpose, which is not contrary to the law or morality (economic, cultural, etc.). A company therefore does not have to have a commercial purpose and seek profits, unless by its activity or by definition it is characterised as commercial.
The main distinction between companies is made between companies with share capital, such as the public limited company and the limited liability company, and companies with personal status, such as the civil partnership, the partnership of limited liability, the general partnership and the limited partnership. Recently, the corporate type of Private Company Limited by Shares has been introduced in Greek law.
Foundations, legal persons under public law and the Civil Code society are not considered companies.
Public limited company ( S.A. )
The joint-stock company, which is regulated in Greece mainly by Law 2190/1920, as amended, is a pure capital company with legal personality, for whose debts it is liable only with its own property. It is always a commercial company, even when it is not trading, mainly because of the seriousness of its role in the economy.
Its main elements are:
- It requires a share capital of at least EUR 24 000 for its establishment.
- The share capital is divided into shares and the shareholders have limited liability.
- Strict publicity conditions are observed from its establishment and for as long as it lasts.
- It has two bodies, the General Meeting of Shareholders and the Board of Directors, which decide by majority vote.
The legal establishment of a joint stock company requires a statute, publication in the Official Gazette, registration in the Register of Joint Stock Companies and an operating licence from the competent authority if the capital exceeds EUR 3 million. A limited liability company may also be a one-person company.
Legal guidance on the establishment and operation of a SE is necessary, in particular on issues relating to the constitution and statutory rules governing the general meeting and the board of directors, while particular attention should be paid to the tax treatment of the legal entity, its shareholders and members of its board of directors.
Limited Liability Company (LLC)
The Limited Liability Company, regulated in Greece by Law 3190/1955, is a capital company with legal personality and certain personal elements. Only its property is liable for its debts without limitation and it is always considered a commercial company.
Its main elements are:
- It requires a corporate capital of at least EUR 4,500 for its incorporation, which may also consist of a contribution in kind (e.g. real estate) following a valuation.
- The share capital is divided into shares and the shareholders have limited liability.
- There is no state control and supervision as in public limited companies
- It has two bodies, the General Meeting of the partners and the manager (or managers), who need not be a partner.
In order to legally establish a PE, a statute is required, which must at a minimum include the statutory requirements, publication in the Gazette and registration in the Register of PEs. The SPE may also be a one-person company. The choice of personal details and their inclusion in a PE is regulated (within the limits of the law) by its articles of association.
The areas of most frequent legal interest – particularly in comparison with a private limited company – are the general meeting of the partners and issues relating to the managers, shares and taxation of the PE.
Civil law company
As a rule, a civil partnership is a personal company and has no legal personality. However, it can acquire one when it pursues an economic purpose and complies with the prescribed conditions of publicity.
Its main characteristic is the non-distribution of profits to the partners at the end of the financial year. The profits must be reinvested in the company in order to promote its objectives, which are set out in its articles of association.
When a civil partnership has no legal personality, it is set up informally, without publicity and cannot go bankrupt. When it does, however, it is treated by law like general and limited partnerships except for bankruptcy, which in the case of a civil partnership with legal personality simply results in the dissolution of the company.
General partnership ( O.E. )
A general partnership is a partnership with legal personality, in which the partners (at least two) are unlimitedly liable, over and above the partnership property, and each of them individually with their personal property for the debts of the partnership.
A general partnership is characterised as a commercial partnership if its usual activity is commercial and not by definition (as is the case, for example, with a joint-stock company). If it acquires commercial status, it may also become bankrupt, which will lead to its dissolution.
Publicity formalities and articles of association are required to set up a company limited by shares.
A similar type of company is the limited partnership.
A limited partnership ( Ltd. )
A limited partnership is a partnership with legal personality in which two types of partners are required to co-exist: general partners, to whom the same rules apply as to the partners of a general partnership, and limited partners.
The limited partners are equal to the general partners as regards the internal relations of the partnership (participation in profits, contributions, etc.), but are liable for the debts of the partnership only up to the value of their contribution in the worst-case scenario. However, they may not represent the company and their name may not be included in the company’s name. If these prohibitions are violated, the limited partner is liable as a general partner (unlimited and joint and several).
In all other respects (formation, taxation, commercial status, etc.) the same applies as for general partnerships.
Private limited company (PSC)
The corporate form of the Private Limited Company emerged from the need to support small and medium-sized enterprises in the country and to promote entrepreneurship, being an evolution of the Limited Liability Company. The private limited company is a capital company with legal personality and is liable for its debts with its property (excluding guarantee contributions). It is always commercial, but certain activities are excluded from its scope (banking, insurance, sports, etc.).
Its main elements are:
- It requires a minimum capital of one (1) euro for its establishment.
- The partnership capital is divided into shares corresponding to the contribution of each partner.
- The contribution may be a capital contribution, but may also be an extra-capital or guarantee contribution.
- It has a fixed duration (12 years, unless otherwise specified).
- It has two governing bodies, the General Meeting of Partners and the Administrator.
A simple private document (articles of association) is required for the establishment of the ICE, which is filed with “One-Stop Services” and is published on the website of the General Commercial Registry and not in the Government Gazette.
The Private Company, which may be a one-person company, can be established in a fast-track procedure (in theory in one day), and the same applies to its taxation as for the PE
How to establish a LLC company in Greece?
A private limited company is constituted by one or more natural or legal persons. The establishment of an IKE may also be made by a private document (agreement). A notarial deed is only mandatory if required by a specific legal provision, e.g. if a right in rem in real estate is transferred. The provisions of Article 5a of Law 3853/2010 (added by Article 117 § 3 of Law 4072/2012) apply to the incorporation procedure, i.e. the incorporation is carried out through the One-Stop-Shop of the competent department of the General Chambers of Commerce and Industry (GEMI). With the registration of the IKE within GEMI, the entityacquires legal personality. The constituent document of the IKE must contain its articles of association. The IKE is required to have to cover its initial capital and to obtain a corporate website within one month from its registration.
What are the requirements for setting up an IKE Company?
- Have a Tax Identification Number (TIN) from Tax Authority (for the founders)
- The founding members may be natural or legal persons. Natural persons should have attained the age of eighteen (18).
- In order to setup a business in Greece, you will need a registered office within Greece to which all communications and notices can be addressed.
- For certain activities i.e. service providers can be a virtual registered office (we provide Registered Address Services) but for other activities like trading or manufacturing regular premises (commercial place) must be rented.
- You must cooperate with a competent Tax Accounting – Legal firm in order to guide you through this procedure and in order to prepare all the necessary applications and forms for you.
- The Articles of Association of the company is not necessary to be written by a lawyer. However, we believe that a competent lawyer have to support the new company anyway.
- We are taking care of drafting the Statutes according to the guidelines of the Law with the review of our Legal team.
After the preparation of all the necessary documents and the Statutes of the company, we proceed with the Registration of the new company.
Simultaneously with the Registration of the New company, we will also get:
- the Tax Identification Number of the Company
- the VAT Registration of the Company
- the Key Code Tax number (Klidarithmos) of the Company (the online codes that are necessary for the online tax submissions)
- Employers registration number for the company
- Credentials for entrance within Greek General Chambers of Commerce
8. The Director of IKE, according to Circular OAEE No. 44/27.7.2012, is legally obliged to be registered with National Insurance Organization (EFKA)) . Furthermore, while tthere is no need for the partners to be registered as well, the sole partner is obliged by Greek Law regulations to be also registered in EFKA.Another highlight of the IKE company is that it is not a prerequisite for the director(s) of the company to have residence permit in Greece, in case they are not Greek citizens or EU citizens.
What is the taxation of an IKE company?
Greek Companies are subject to corporate income tax on their net income. Non-resident companies that have a permanent establishment in Greece are subject to corporate income tax on income derived through the permanent establishment that has been operated in Greece. Companies are deemed to be resident if they are incorporated in Greece (the registered office is in Greece) or have their place of effective management in Greece. The fiscal year usually runs from 1 January to 31 December.
However, all companies maintaining C category bookkeeping requirement can choose to have the fiscal year ending on 30 June. Also, if a Greek company is a subsidiary of a foreign parent company with the parent company holding a minimum of 50% of the share capital, the Greek company can choose to align the fiscal year with that of the foreign parent company.
The tax rate applicable to undistributed profits is 22% (24% IS THE VAT APPLICABLE)for all forms of companies including Public Limited Companies (SA) andLimited Liability companies (EPE)
Distributed profits are subject to an additional income tax of 5%, when taken by the partners as dividends. Dividends paid to parent companies based in European countries are exempted from such dividend tax if certain conditions are met.
Advantages of the Private Company in Relation to Other Types of Greek Companies
Establishing a Private Company can be a feasible and the easier way to start a business in Greece.
There are several advantages that the Private Companies (PC – IKE) represent in comparison with other types of Greek companies (in terms of legal entities). Some of them are listed below:
Zero capital requirements (it is not compulsory to have a certain amount of capital like ).
-Quick establishment with minimum expenses and simplified procedure.
-Provided the Articles comply with the requirements of the Law, they may be drafted accordingly to suit the particular needs of a type of business as well as of its members, enabling the company to be shaped either closer to a partnership or closer to a Societe Anonyme.
-Very flexible corporate form (meetings can be held through teleconference and abroad, any amendments and changes are made by a private agreement).
-Corporate documentation may also be drafted in any official EU language.
-Only the manager and the sole member (in case of a single-member PC) are subject to compulsory registration at the local insurance organization.
🇬🇷 Why should I start the business in Greece?
Take the first step towards realizing your entrepreneurial dreams by incorporating a company in Greece and turning your business idea into a thriving reality!
We are a department formed by qualified legal experts who have been trained in the field of corporate law. We work on these requests every day and it’s our passion. For us, Lexidy is a way of life and what excites us the most is to be able to deliver the happiness and satisfaction of a successful process. We want to help you achieve your goals and dreams.
Frequently Asked Questions
STAGES OF TRANSFORMATION
The provisions of article 106 of Law 4072/2012 (as they have been recently amended at par. 2 by the respective par. 4 of article 11 of law 4155/2013) have been regulating in a singular way the transformation of an IKE into a company of any other type.. There are two stages to be distinguished:
a/ an I.K.E. is to be transformed into a different kind of company by way of decision of their partners. In particular there has to be a majority decision of two thirds (2/3) as to the total number of company shares of the IKE to be transformed, as per the provisions of par. 5 of article 72 of Law 4072/2012, and as per par. 1 of article106, in combination with par. 2 of article 68 same Law.
In terms of the same decision it is necessary for the company’s statute therein included so as to have the transformation properly concluded. It is also necessary, in that same decision to have the agreement with the partner of the extra-capital contribution included, as provided for by article 106 par. 3 of Law 4072/2012.
b/ the second stage is about the transformation to be concluded by putting in place all the provisions applied in terms of the new company formation.
From the day of the decision’s registration including the new statute therein into the Greek General Chambers of Commerce (GEMI) the transformed I.KE.contitutes a new corporate formation. The registration of the transformed IKE into the GEMI. takes place by virtue of the relevant GEMI service competent for such a procedure. After such a transformation:
- The legal personality of the company remains intact
- The pending trials remain scheduled as planned without any annulment or postponement to be taking place whatsoever
- Any administrative permits already issued remain valid by way of transfer under the name of the just transformed company formation
Thus, in a nutshell, in terms of the procedure of the transformation, the IKE to be transformed does not get terminated nor dissolved; on the contrary, it is merely its legal formation that gets altered, while its legal personality remains intact
THE PROCEDURE OF TRANSFORMATION
If we were to form a schedule of the necessary actions to be taking place in order for the procedure of the transformation of an IKE into another type of entity to take place, the following have to be taken into consideration:
- A decision reached by the General Assembly of the IKE partners with regards to such a transformation by way of majority of 2/3 of all capital shares (article 68 par. 2 case f’ of Law 4072/2012).
- A Report issued by the Committee of article 17 of law 4548/2018, with regards to the evaluation of the transformed IKE’s assets and liabilities
- The signing of the agreement with regards to the transformation of the IKE into another type of entitybefore either a lawyer or a competent Notary in case the law mandates for the new type of company to be incorporated before a Notary. This agreement shall be signed by all IKE partners, or by all those partners that have reached such a decision within the framework of the general assembly meeting that had just taken place (a meeting which the partners had attended themselves or by way of proxies and representing lawyers).
- The lawyer or Notary acting in his/ her capacity as One-Stop-Shop Service, shall look into all necessary actions in order for the registration of the agreement transforming the IKE into the pther type of entity via the relevant GEMI platform and procedure
- The competent GEMI service shall be registering the transformation agreement and shall be forwarding it to the relevant Prefecture service in order to run a due diligence check and issue the relevant approval decision
- The relevant GEMI Service shall be looking into the matter of registration of the transformed IKE and the uploading of the relevant announcement in itswebsite , for the transformation to become publicly available.
The only restriction imposed by the law is that the exercise of activities for which another type of company has been exclusively designated by law is prohibited (e.g. banking or insurance activities are only permitted by a limited liability company).
Can foreign investors set up an IKE Company in Greece?
The founders of a Private company (IKE) might be:
- Natural persons
- Legal Persons
Natural Persons could be:
- Greek citizens
In that case they should hold an identity card and their Tax Identification Number.
- EU citizens
In that case they should hold an identity card or valid passport in order to obtain a TIN number.
- Non EU citizens
In that case they should have a valid passport and it is not a prerequisite to hold a residence permit even if they wish to be the company’s managers
Legal Persons could be:
- EU registered legal persons
- For non EU registered legal persons
The founding members may be natural or legal persons. Natural persons should have attained the age of eighteen (18).
The statutory seat of a private capital company is located in the Municipality of the Greek territory referred to in its statutes. A private capital company can establish branches, agencies or other forms of secondary establishment in other areas of Greece or abroad.
The seat of the company is in the municipality determined in its Articles, and the effective management may be abroad. Furthermore, the PC may transfer its seat to any other member state of the European Economic Area.
According to the law, all kinds of contributions are divided into shares of the same nominal value. However, only one type of contribution can correspond to each shareholder. The partners can choose a company that consists of capital contributions or a company with predominant personal contributions, such as employee contributions and undertaking responsibility for the debts of the company. In any case, in an IKE there must be at least one shareholding which represents the capital contribution.
The transfer of shares can take place throughout the founder’s lifetime or by an act of last will. However, a partner with non-capital contributions and/ or guarantees may not transfer these shares unless they are first purchased by the shareholder.