Open own business in Greece

Business documentsGreece has many organisational and legal entity formats, among which there are three major – Joint Stock Company alias Anonymos Eteria (AE); Limited Liability Company alias Eteria Periorismenis Efthynis (ЕРЕ); and company partnerships that are divided into unlimited partnerships alias Omorythmos Eteria (OE) and limited partnerships alias Eterorythmos Eteria (EE). In practice most major businesses are registered as Anonymos Eteria (AE), although there is also a large share of LLCs as Eteria Periorismenis Efthynis (ЕРЕ), which have the benefit of flexibility and cost-efficiency. An ЕРЕ does not need to declare quota of their profits, and hence is taxed for general full profit of company regardless whether that profit is divided. So it can avoid issuance of obligations and hold only one organiser accountable. In case of unlimited partnerships as Omorythmos Eteria (OE) all partners have unlimited liability, inclusive of individual ownerships. The liability is determined in proportion to shares, inclusive of foreigners who register local Greek businesses, partnerships or branches as well as shared enterprises of legal entities. This means that foreigners can create their own businesses to be offering services in Greece, such as consultations or representations of enterprise branches from another country. A company registered in Greece is by default a Greek legal entity even in the case of its organisers being foreign citizens. There are only a few limitations towards foreign investments in Greek economy – and the country has ratified an EU law on permission of new kind of business, the so-called Societas Europea. As with Anonymos Eteria (AE); it is a form of business recognised across all EU member states, allowing free transfer of registered branches as well as freedom of merging acquisitions. The minimum for auctioned capital is 60 000 Euro for AE, 18 000 Euro for EPE, and 120 000 Euro for SE.

The Greek organisational and legal entity format, such as for example Anonymos Eteria (AE), is comparable to the Joint Stock Society in Russia, and «Société Anonyme» in France, and the so-called «AG» in Germany. In this business format the liability of stockholders is limited to their respective shares within the defined capital. The process of registration and liquidation for such businesses is governed by law LD 2190/1920. In order to open a Greek joint stock company, as referred to by the Government Bulletin 84 of 18/07/2015, one must obtain the following:
1) Temporary registration with company name from the Greek Chamber of Commerce
2) Charter draft of such company, inclusive of name with added «Anonymos Eteria», duration of durability for 20 to 50 years, corporate aims, stock capital, share number and types for business opening, relevant members and committees details for stockholders
3) Confirmation of Charter by main organiser(s) prior to notary certification
4) Submission of registration paperwork to register of the Greek Ministry of Development, paying fee in sum total of 1% of capital declared.
5) For companies with more than 3 million Euro capital declared, receiving permission from the Greek Ministry of Development
6) Publication in the Greek Government Bulletin of company charter summary along with as in 5) if applicable
The charter of a joint stock company is confirmed by one or more organisers, who can be individual or legal entities. In case of multiple organisers, all shares can be summoned towards one organiser.

The minimum total sum payable towards the charter foundation within two months from the date of company registration is 60 000 Euro. The law allows heightening this sum for companies that operate in specified sectors such as bank institutions, insurance companies, etc. Likewise it is possible to pay a higher sum in several instalments in cases of limited liability companies either seeking public funding for own shares or offering distribution of obligations – in this case such corporations must follow the legal requirements as defined for public offering of funds. Formalised corporate capital can be registered as in monetary or other share values, wherein a part must be paid in monetary terms.

The governance of an  Anonymos Eteria  is verified by signatures of all CEOs and representatives; its operation is governed by the directors’ committee and stockholders in joint meetings. All decisions made for company operations are adopted by the directors’ committee. This committee’s members become stockholder for a period of no more than six years, with possibility of extension. Additionally any such member can lose their position if so voted by majority of stockholder in such joint meeting. The directors’ committee must have at least three members and can have up to as many members as needed in accordance to Greek Stockholder Company format regulations; such members can be individuals or legal entities as per such company’s regulations. Certain situations would allow representatives of directors to be acting on their behalf. For joint meetings, at least half of CEOs and one representative must be present in order to convene such meeting, even through telecommunications technology and transfer as per such company’s regulations or as per joint decision of present members. The limitation of meeting places is to a registered company space or office, although if per such company’s regulations there is provision for another place – or in case all directors or their representatives agree on – then a meeting can be held in any other place in Greece or overseas. All meeting decisions are summarised onto paperwork as meeting protocol, and this paperwork then is certified by signatures of all directors or their representatives.

The company directors dealing with, or auctioning stocks and other funds on the Athens Stock Exchange ATHEX, must be same persons who are CEOs and who decide over company operations or who are not CEO who are consultants and stockholder representatives. At least one third of such committee must have non-CEOs with at least two persons independent. Each Greek company must submit to the Greek Commission of Stock Exchange their stockholder meeting protocols, containing information on nominations for board of directors, and protocols of directors’ committee meetings, containing information on charter and division of company operation. These protocols must be submitted within 20 days after meetings end, so that the Greek Commission of Stock Exchange could cross-check such company for following set regulations. Stockholding companies must have inner regulations by directors’ committee about company working structure, its field of operation, its divisions cooperation and governance, obligations of its CEOs and directors, regulations for nominating its CEOs and hiring its staff and criteria for their efficiency, among other points as outlined by Greek law. Additionally such companies must hold an inner audit division whose members are appointed by the directors’ committee and who operate strictly as outlined by one to three non-CEO committee members. Members of the inner audit division must observe all company operations as outlined by charter and Greek law, and must report to the directors’ committee about arising conflicts of interest between such company and committee members or senior managers.

The most common organisational and legal format is the Greek Eteria Periorismenis Efthynis (ЕРЕ). Its structure resembles the French «SARL», and German «GmbH», and Russian «ООО». ЕРЕ resembles  АЕ, as it acts like an open company and as an independent legal entity. Its decision-making is alike with partnerships, and so its format suits small and medium-sized organisations. Minimum capital necessary to open an  Eteria Periorismenis Efthynis (ЕРЕ)  is 18 000 Euro, half of which must be paid in monetary terms at the moment of company registration. An  ЕРЕ  is founded in majority of cases by two stockholders, who share unlimited liability to loans and company obligations within their own capital stock shares. Such company can have only one founder, and in this case the company name must include the wording  «one person limited liability company». An  ЕРЕ  can be governed by one director of either Greek or EU citizenship. A foreigner may obtain a CEO position in case of a relevant power of attorney. The company registration process in Greece has the following stages:
1) Company name registration in the Greek Chamber of Commerce
2) All registration documents are created and certified by a notary
3) All documents are submitted to the register of companies, wherein the registration becomes complete. Government fee is 1% of total company capital.
4) Announcement of company registration and its charter is published by the Greek Government Bulletin.

Greece has two types of partnerships. Full partnership with unlimited liability is Omorythmos Eteria (OE)  that has all its capital divided into partner shares, and general partners are equal in full and unlimited liability regarding obligations and loans of such company. Thus partner cannot transfer their shares to third parties without an agreement by the general assembly, and the act of transfer of rights is registered in the partner register. General partners operate the company as per charter document. In order to open such company, the following steps are needed:

1) Company name registration in the Greek Chamber of Commerce
2) A registration document is certified by a notary
3) All documents are submitted to the register of companies, wherein the registration becomes complete.
4) Announcement of company registration and its charter is published by the Greek Government Bulletin.

Common partnerships is the second type alias  Eterorythmos Eteria (EE). All their capital is divided into partner shares; wherein partners are divided into general partners and limited partners. General partners have equal rights and full liability to company obligations and loans, whereas limited partners are liable within their shares only. Members of such partnership cannot transfer their shares to third parties without a prior agreement by general assembly. Company operation is by general partners as per charter outlined in registration documents. If limited partners partake in company operations, they then have unlimited liability as is with general partners.

Greek law has a provision for Joint Ventures alias Kinopraxi, their branches and foreign companies. Typically a Kinopraxi is founded by two or more persons for corporate operations, and in contrast to other types of companies, cannot be a legal entity as all its shares and obligations are held by partner members. Such joint ventures can be founded in order to operate a project as for taxing purposes this is a financially-economic entity; there is specified criteria for accounting purposes for these.

An overseas company can open its branch in Greece. All branches are registered in the Greek Ministry of Development by submitting documents inclusive of overseas company charter, certification of good reputation as issued by a control division, directors’ committee decision about branch opening, power of attorney appointing a legal representative to operate such branch and appointing persons to handle correspondences. Such company branch can be registered in accordance to law 2190/1920 as a subdivision of an (АЕ), or in accordance to law 3190/1955 as a branch within an (ЕРЕ). The later is preferred in majority of cases. By law 3427/2005 that amends the law 89/1967, foreign legal entities can open branches in Greece with only one aim – as consultancy subdivision to their main overseas office, inclusive of centralised accounting services, quality control services, planning, advertising and marketing, and data analysis services. As a result such an offshore company is registered as a branch with a minimum of four staff members; this allows exemption from tax on all profits gained outside Greece. According to law such a branch must submit a bank guarantee regarding a monetary sum equivalent of 100 000 Euro; this documentation is deposited by the Greek Ministry of National Economy in order to cover potential future losses due to illegal use of a Greek branch by an overseas founder.