Your guide to doing business in Greece
On the shores of the Mediterranean, between the Ionian and Aegean seas, Greece represents a regional and international gateway, with strong trade links to Europe, Asia, and North Africa. Considered the birthplace of Western civilisation, Greece is also regarded as the source of many modern cultural, economic, educational, and political systems. Greece has a highly developed, open economy - one of the largest in both the Balkans and the world - with traditionally high performing service and agricultural sectors. Tourism plays a significant part of Greece’s economic profile: home to a range of beautiful natural environments including several UNESCO world heritage sites, Greece has become one of the most-visited countries in the world according to the United Nations World Tourism Organisation. After the 2008 global economic crisis, Greece introduced a range of recovery measures - including the Stability And Growth Program - aimed at reducing the budget deficit and increasing employment. Greece continues to introduce initiatives to stimulate investment and boost competition: in 2014 it became the fastest growing Eurozone economy and in 2019 it reached a GDP of $214.012 billion, with a growth rate of 1.9%. Greece is a member of the EU, NATO, the OECD, and the WTO, and was ranked 79 on the World Bank’s Ease of Doing Business Survey 2019.
There are plenty of reasons to target Greece for investment opportunities, including:
Greece is an appealing investment location because it offers businesses a wide variety of investment opportunities. Greece is a natural gateway to more than 140 million consumers in South East Europe and the Eastern Mediterranean. It is a hub of diverse emerging markets, with strong demands in consumer goods, infrastructure and modernization, technology and innovation networks, energy and tourism development.
In order to process payroll in Greece, a company must have a legal entity set up. The estimated completion of this process will depend on the type of company (e.g. IKE, Ltd, A.E.) and it will take approximately two months to complete.
In order for a company to start processing payroll in Greece, a company will need a tax number (obtained from the tax authorities) and an AME number (obtained from the social contributions authorities). It is estimated that registering with the tax and social contributions authorities will take five working days.
No license is necessary before making any tax/social security fillings on behalf of a client. A proxy will be required; however, the client can provide the authorization for this.
Usually, banks are open Monday to Thursday 8am to 3.00pm and 8am to 2:30pm on Fridays.
It is not mandatory for employees to be paid via Greek bank account, it is however mandatory for the authorities (income tax and social contributions) to be paid via a Greek bank account.
The working week in Greece is Monday to Friday, with the weekend being Saturday and Sunday.
Greece is located on the Mediterranean Sea with the Ionian Sea to the west, and the Aegean Sea to the east - and shares land borders with Albania, Macedonia, Bulgaria and Turkey. Long regarded as the cradle of western civilisation, Ancient Greece developed many of the foundations of language, culture, mathematics, science and philosophy which endure to this day. As an empire, Greece’s influence stretched across much of Europe, but the country was eventually absorbed into the Roman Empire around 200 BC. Today much of Greece’s ancient heritage still influences global culture, and the country itself has become a developed parliamentary republic, with strong political and economic ties to the rest of the world. Characterised by hilly and mountainous landscapes, Greece has the longest coastline in the Balkans and boasts numerous idyllic beaches and coastal beauty spots. With a hot, sunny Mediterranean climate, Greece attracts holidaymakers and tourists from around the world, who arrive for warm, beach-friendly weather, or to explore a variety of historic sites.
Full Name: The Hellenic Republic
Population: 10.72 million (World Bank, 2020)
Major Language: Greek
Major Religion: Christianity
Monetary Unit: 1 euro = 100 cents
Main Exports: Textiles and clothing, food, oil products
Internet Domain: .gr
International Dialling Code: +30
Good morning Kalimera
Good evening Kalispera
Do you speak English? Milate Aglika?
Good bye andi'o sas
Thank you Efharisto
See you later Tha ta poume meta!
The tax year in Greece runs from 1 January to 31 December each year.
The employer is responsible for making the contributions to Solidarity Tax, Income Tax and Social Security Contributions (IKA).
An individual is subject to income tax on his/her total net income in Greece and abroad. Net income that is sourced in Greece is taxed irrespective of the place of residence of the individual. Income arising abroad is taxed if the individual is a resident of Greece. For income tax purposes, the income derived by individuals is divided into certain categories. Taxable income is calculated based on the rules of each category and the total taxable income of the individual is the aggregate of the categories.
Income tax contributions must be made by the end of each month.
The penalty for late submission/payments is 10% of the total amount payable.
Every second month, the employer is obligated to pay the amount of taxes withheld from the employees’ salaries until that time by submitting the appropriate statement. Furthermore, the employer has to submit an annual statement with the total financial data of the year.
All resident legal entities that are duly registered in accordance with Greek Corporate Income Tax Law are subject to corporate tax on their worldwide income whilst non-resident companies are taxed on all income derived from Greece.
The following are exempt, on the condition that they are recorded in a tax-free reserve; profits arising from another EU country as long as the parent-subsidiary relationship applies, qualifying dividends received from EU countries and dividends received from collective investment schemes or portfolio investment companies.
Non-deductible expenses include (not exhaustive); expenses over €500 not paid via bank transfer, fines and penalties and unpaid social security contributions.
The taxable period is the financial year, this may end on 31 December or 30 June.
The corporate income tax return must be filed by the 10th day of the fifth month following the end of the financial year and the income tax is payable in six equal monthly instalments commencing upon the filing of the tax return.
All salaries are subject to social insurance deductions. There are a number of different social insurance foundations. Each foundation is responsible for a different working specialty.
IKA is the largest, most common social security body in Greece. IKA covers those in dependent employment in Greece or abroad for an employer who is based in Greece, as well as those who offer full-time or part-time personal labour on commissioned work agreements and are not insured with any other main insurance agency. IKA covers certain groups of people who offer their labour to various employers at various times and whose insurance is realized through their unions or insurance associations, (e.g. porters, news-stand vendors, slaughterhouse workers etc.) or through special provisions (e.g. exclusive nurses).
At the end of each month, there are a number of documents that must be submitted to the authorities. These include; APD file (IKA file) (Social contributions), income tax declaration and any extra contribution file. Submissions can be made online, or if they are last minute, they must be done in person.
The annual Company Income Tax Statement must be submitted via the relevant internet service each year. The deadline varies each year.
Employee’s annual statements will include the annual gross and net income of the employees and any withheld tax and social security amounts. The annual statements are generated and provided by 31 March of the following financial year.
All new employees must be registered with the Tax Office and IKA. They must obtain an AMKA (Social Security Number) in person. New starts must be registered before the date of recruitment otherwise, there will be fines.
For any expat new starts, the following documentation is required: -
Again, the information regarding expat employees must be submitted before their recruitment date otherwise there fines will be applicable.
In order to work in Greece, each employee must have a VAT number. If employees do not have one they must obtain one from the Greek authorities.
When there is a leaver, a termination form must be submitted to the local authorities no later than eight days after the employee’s termination.
If the leaver has been terminated, then payment should be on their last day. If the leaver has resigned, payment will depend on the deadline for each allowance.
Employers in Greece should understand the withholding obligations they have towards their employees’ salaries during the payroll process. These obligations include tax and social security contributions which must be withheld each pay cycle, and paid to the relevant authority.
Given the complexity of Greece’s tax system, compliance should be a priority for businesses operating within its legislative territory. With that in mind, expat businesses setting up in Greece may engage a global payroll provider to oversee their pay process and ensure compliance with the country’s tax rules and regulations.
It is legally acceptable to provide employees with online payslips in Greece and payroll reports must be kept for at least 10 years.