Choosing the most appropriate legal structure is an important decision which involves evaluating several criteria notably the extent of personal liability involved, tax implications, ownership, control and management mechanisms, formation and ongoing administration requirements in addition to matters such as eligibility for subsidy and financing.
Greek law provides for the following main types of business entities:
– Sole proprietorship where one person is responsible for all the business’s debts.
– Partnerships that are owned by two or more individuals. There are two types: a general partnership (O.E.) where all partners have joint and several liability irrespective of their participation in losses; and a limited partnership (E.E.) where at least one partner has unlimited liability and only partners not involved in the partnership’s business management can limit their liability.
-Share capital companies where the partners/ shareholders are generally not at risk with their personal property subject to important exceptions for members of management in certain cases such as for non-payment of tax and social security contributions.
There are several types of share capital companies including sociétés anonymes (A.E.), limited liability companies (E.P.E.) and private capital companies (I.K.E)). Sociétés anonymes are chosen for companies with significant share capital and business activity. Limited liability and private capital companies are regarded as hybrid structures as, although categorised as share capital companies, they bring together certain features of partnerships and companies.
-Foreign companies may also establish a Greek branch or create a joint venture with a local company. Another option available to foreign companies is to establish an office in Greece under the framework regime of Law 89/1967 where they provide support services to their head office or other affiliated entities located abroad.
Each entity has unique requirements and positive and negative aspects that need to be carefully considered. At Calypsis Legal Partners we advise on the structure best suited to our clients’ needs with a view to assisting our clients ensure that their businesses are incorporated and organised in the most effective and tax efficient manner.
This document is for informational purposes only and does not replace the need to obtain specific legal advice on a case-by-case basis.