Foreign investors entering the Greek market usually face the same first question: which corporate vehicle should carry the business? For most, the choice comes down to two limited-liability forms, the Private Capital Company (Idiotiki Kefalaiouchiki Etaireia, IKE) and the Société Anonyme (Anonymi Etaireia, AE). Both protect shareholders from personal liability for company debts, both are taxed at the same corporate rate, and both are registered with the General Commercial Registry (GEMI). They differ, however, in capital, governance, flexibility and the image they present to banks and counterparties.
This article outlines the main legal differences, the registration process and the points foreign founders should prepare for in advance. It is a general overview and does not replace advice on a specific project.
The two main vehicles
The IKE (Law 4072/2012)
The IKE was introduced in 2012 to offer a simple, low-cost limited company. Its principal features are:
- Minimum capital: the law allows capital as low as €1. In practice, a higher amount is often advisable, since banks, landlords and suppliers look at capitalisation when assessing a new company.
- Flexible contributions: in addition to cash capital, the IKE recognises contributions outside capital, such as services (“sweat equity”) or guarantees, which can be useful for founder teams.
- Management: one or more administrators (diacheiristes), who need not be shareholders.
- Single shareholder: an IKE may be founded and held by a single person, individual or corporate.
- Transfer of shares: the articles of association may restrict transfers, which suits closely held or family businesses.
The AE (Law 4548/2018)
The AE is the traditional Greek joint-stock company, reformed by Law 4548/2018. Its principal features are:
- Minimum share capital: €25,000, which under the current regime must be paid up in full at incorporation.
- Governance: a board of directors (with at least three members, or a sole director in the cases the law permits), a general meeting and, above the statutory size thresholds, mandatory audit by certified auditors.
- Shares: freely transferable unless the articles provide otherwise, which makes the AE the usual vehicle for raising capital from multiple investors, listing, or holding regulated licences.
- Sector requirements: certain activities, including banking, insurance and a number of regulated sectors, are reserved by law to companies in AE form.
A side-by-side view
| IKE | AE | |
|---|---|---|
| Governing law | Law 4072/2012 | Law 4548/2018 |
| Minimum capital | €1 | €25,000, fully paid at incorporation |
| Management | Administrator(s) | Board of directors / sole director |
| Corporate income tax | 22% | 22% |
| Typical use | SMEs, subsidiaries, start-ups | Larger or regulated businesses, multi-investor structures |
The corporate income tax rate of 22% and the 5% withholding tax on dividends apply to both forms under the current Income Tax Code; the tax picture should nevertheless be reviewed with an accountant, as incentives and treaty provisions can alter the outcome.
Choosing between them
There is no universally correct answer. In our experience the decision usually turns on four questions:
- Will the business need outside investors? If the plan involves several unrelated shareholders, venture funding or a future listing, the AE’s share structure and governance are generally better suited.
- Is the activity regulated? Where the law requires the AE form, the question is settled.
- How much capital will be committed at the outset? An investor who does not wish to lock €25,000 into share capital at day one may prefer the IKE.
- How will the company be perceived? Some counterparties, lenders and public-sector contracting authorities attach weight to the AE form and its higher capital.
An IKE can later be converted into an AE, so the choice is not irreversible. Conversion involves its own formalities and costs, however, and it is usually more efficient to select the right form from the beginning.
A foreign company that does not want a separate Greek legal entity may also register a branch. A branch is not a separate legal person, so the parent company remains directly liable for its obligations. This option has advantages in some cases but should be compared carefully against a subsidiary.
The registration process
GEMI and the One-Stop Shop
Greek companies are registered with GEMI, which is operated through the chambers of commerce. Most standard incorporations are now handled electronically through the One-Stop Shop service (Ypiresia Mias Stasis, e-YMS), available via the national Business Portal. A single filing results in registration with GEMI, the issuance of a GEMI number and the company’s tax identification number (AFM), and registration with the competent chamber.
Where a capital contribution includes real estate, or in other cases where the law requires a notarial deed, incorporation is carried out through a notary acting as a One-Stop Shop.
Preparatory steps for foreign founders
Most delays in practice arise before filing, not at GEMI. Foreign founders should plan for:
- Greek tax numbers (AFM) for every individual founder, administrator or director and, where relevant, for corporate shareholders.
- Corporate documents of any foreign shareholder company (certificate of incorporation, good standing, register of directors, board resolution approving the investment), apostilled under the Hague Convention and officially translated into Greek.
- Powers of attorney if a local lawyer will sign on the founders’ behalf, also apostilled and translated.
- Beneficial ownership information, which must be declared to the Central Register of Beneficial Owners after registration.
- A registered seat in Greece, supported by a lease or other title.
Timeline
Once all documents are in order, a standard IKE filing through the e-YMS is usually processed within a few working days; AE incorporations and non-standard structures may take somewhat longer. The overall time to an operational company is typically longer than the registration itself, because the company must then complete its tax registration and activity codes, appoint an accountant, register with the e-books (myDATA) system and open a bank account. For non-EU founders, document legalisation and translation, and the bank’s know-your-customer review, are often the steps that determine the timetable. Any estimate should therefore be treated as indicative.
After incorporation
Formation is only the first step. Each company must keep accounting records through a licensed Greek accountant, file periodic VAT and annual corporate tax returns, publish its financial statements in GEMI, and keep its GEMI entry and beneficial ownership information up to date. A shareholders’ agreement, separate from the articles of association, is advisable whenever there is more than one shareholder, to cover matters such as deadlock, exit and transfer restrictions.
Frequently asked questions
Can a non-EU citizen own 100% of a Greek company?
Yes. As a general rule Greek company law does not restrict foreign ownership of an IKE or AE. Separate restrictions may apply in specific sectors or in border regions, and immigration rules govern whether a non-EU shareholder may live and work in Greece.
Do I need to travel to Greece to set up a company?
Not necessarily. Many steps can be handled through a lawyer acting under a power of attorney, provided the document is properly apostilled and translated. Banks may still require the beneficial owners’ personal identification.
Is €1 of capital really enough for an IKE?
Legally it is. Commercially, a symbolic capital may make it harder to open a bank account, sign a lease or obtain credit, so the appropriate amount should be decided with the business plan in mind.
Can the company help me obtain a residence permit?
Certain capital investment routes under the Golden Visa framework involve investments in Greek companies, and separate permits exist for executives of foreign-owned companies. The conditions are specific and should be reviewed before the structure is finalised.
Discussing your project
Selecting a corporate vehicle affects governance, taxation and future flexibility. If you are considering setting up a company in Greece, Konstantinos Tsegas & Associates Law Firm can review your plans and explain the options that may suit your circumstances. You are welcome to contact us to arrange a consultation.