Commercial companies in Greece are divided into partnerships and incorporated firms.
Partnerships comprise General Partnerships (GP) and Limited Partnerships (LP).
Incorporated firms comprise the Companies Limited by Shares (Societes Anonymes or SA) and the Limited Liability Companies (LTD).
The major difference between partnerships and incorporated firms is that general partners are personally liable for the company’s debts with their personal property.
SHARE CAPITAL LIMITATIONS
There are no limitations as to the minimum capital of general and limited partnerships.
The minimum share capital required for companies limited by shares is €60,000.
With regard to Limited Liability Companies, such limit is currently €4,500.
General and limited partnerships are subject to very few formalities with regard to their establishment and operation.
Companies limited by shares on the other, are subject to a series of formalities:
- They are incorporated by means of a notarized deed;
- Their annual financial accounts are subject to publication formalities (i.e. the Balance Sheet, Profit and Loss Account and Allocation of Profits, prepared in accordance with the Greek General Accounting Plan, are published in the Government Gazette and in one political newspaper).
- Specific decisions of the BoD and the General Shareholders’ Meetings e.g. on Company representation are subject to publication;
- The notice to a GM is published in the press (with specific exclusions).
The establishment cost of general and limited partnerships is quite low.
For SAs and LTD, the incorporation cost is much higher.
The following apply to the incorporation of societes anonymes:
Capital Accumulation Tax, at 1% of the share capital and any share capital increase;
Notaries fees, at approx. 1.20% of the share capital.
TAX EXEMPTIONS IN CASE OF MERGER
- 2166/1993 provides for a series of tax exemptions in case of merger of two anonymous societies. We indicatively mention that one of the major advantages provided in the law with respect to mergers is that the tax reserves of the company acquired formed in accordance with the development laws are not subject to taxation as at the time of the merger, provided that they are deferred to the reserves account of the new or acquiring company.
Moreover, Section 3 of L. 2166/93 provides explicitly that the contribution and transfer of the assets of the transforming companies, any actions or agreements pertaining to the contribution or transfer of assets, liabilities, rights or obligations, and any actions or agreements required for the transformation or incorporation of the new company, are exempt from all taxes, stamp duties or other State charges.
Cyprus is a member-state of the European Union. Companies seated in Cyprus are subject to a more favorable tax regime compared to those seated in Greece.
Greece and Cyprus have entered into a Double Taxation Convention, which renders taxation even more favorable for the companies seated in Cyprus.