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Practical Cost Planning for a Greek Company Setup

A practical guide for foreign founders on planning costs when setting up a Greek company, covering legal forms, capital requirements, registration fees, ongoing expenses, and tax considerations.

Introduction

Setting up a company in Greece as a foreign founder involves a range of costs that should be carefully planned. While Greece offers a strategic location and access to the EU market, understanding the financial commitments—both initial and ongoing—is essential for a smooth market entry. This article provides a practical overview of the typical costs associated with establishing a Greek company, without offering specific quotes or guarantees.

Choosing the Legal Form

The legal form you choose significantly impacts your cost structure. Common options for foreign founders include:

• Private Capital Company (IKE): A flexible and popular choice with a minimum capital requirement of €1. This form is suitable for most small and medium-sized enterprises.
• Limited Liability Company (EPE): Requires a minimum capital of €4,500, which must be fully paid up. It is often used for more established businesses.
• Société Anonyme (AE): A public limited company with a minimum capital of €25,000, suited for larger operations or those seeking investment.
• Branch or Representative Office: Options for foreign companies looking to establish a presence without a separate legal entity.

Each form has different registration fees, capital requirements, and ongoing compliance obligations. Consult with local legal and tax advisors to determine the best fit for your business model.

Initial Setup Costs

When budgeting for company formation, consider the following typical cost categories:

Registration and Legal Fees

• Company name reservation: A small fee may apply for reserving your company name with the Greek Chamber of Commerce.
• Notary fees: Required for drafting and certifying the articles of association. Fees vary based on share capital and complexity.
• Registration with the General Commercial Registry (GEMI): The official registration fee depends on the company type and capital.
• Legal and advisory fees: Engaging a lawyer or consultant to handle the incorporation process is common, with fees varying by provider.

Capital Requirements

For forms like the EPE and AE, the minimum capital must be deposited in a Greek bank account before registration. For the IKE, the €1 minimum is symbolic, but you should still plan for sufficient working capital.

Other Initial Expenses

• Bank account opening: Some banks charge account setup fees, and you may need to deposit initial funds.
• Tax registration (AFM): Applying for a Greek tax number is generally free, but administrative costs may apply if using an agent.
• Social security registration: If hiring employees, register with the social security fund (EFKA).
• Business address: Renting office space or using a virtual office service involves costs, especially in major cities.

Ongoing Operating Costs

Beyond setup, plan for recurring expenses to maintain compliance and operations:

• Accounting and bookkeeping: Greek law requires proper accounting records. Monthly or annual fees for an accountant are standard.
• Tax filings: Periodic VAT returns, annual corporate income tax returns, and other filings may require professional assistance.
• Social security contributions: If you employ staff, employer contributions to EFKA are mandatory and can be a significant cost.
• Business licenses and permits: Depending on your industry, specific licenses may be required, with associated fees and renewal costs.
• Office rent and utilities: If you maintain physical premises, factor in rent, electricity, internet, and other utilities.
• Insurance: Public liability insurance or other coverage may be necessary or prudent.

Tax Considerations

Understanding the tax landscape helps in cost planning. Greece imposes corporate income tax on profits, with rates that may vary based on company size and other factors. VAT is applicable on most goods and services, with standard and reduced rates. Additionally, withholding taxes may apply on certain payments. Tax incentives and exemptions exist for specific activities or regions, but eligibility should be verified with a tax advisor. Always base your financial projections on current tax laws and seek professional advice.

Planning Tips for Foreign Founders

• Create a detailed budget: Include all anticipated setup and operating costs for at least the first year, with a contingency buffer.
• Engage local professionals early: A Greek lawyer and accountant can provide accurate cost estimates and help navigate bureaucratic processes.
• Consider the cost of compliance: Ongoing regulatory requirements can add up; factor in time and resources for filings and reporting.
• Explore funding options: If needed, research available grants or loans for foreign investors, but be cautious of guarantees.
• Monitor exchange rates: If transferring funds from abroad, currency fluctuations can impact your budget.

Disclaimer

This article provides general information only and does not constitute legal, tax, or financial advice. Costs and regulations are subject to change and may vary based on individual circumstances. Foreign founders should consult with qualified professionals in Greece for advice tailored to their specific situation.