One of the most popular types of privately owned limited liability companies in Greece is called the IKE – Idiotiki Kefalaiouxiki Etaireia. It requires a minimum of one euro capital to start and is flexible in terms of it’s usage being suitable for small SMEs as well s a larger businesses.
What are the main features of an IKE company?
The main features of an IKE (Private Limited Company) in Greece are outlined below, and are key to the reasons that make it attractive to expats, business people in Greece businesses in general as a company structure:
- Separate legal entity: This is a key point and is critical from a legal and liability perspective. An IKE company is a completely separate legal entity. It is distinct from the people who own it and there is a separation of any legal liability. It can incur debts and do business in it’s own right and therefore offers significant protection to its owners.
- Scope of members: you can have just one person as a member or more than one person as a member of an IKE company. A single member IKE company is called an SMPC.
- Company duration: The default company duration is 12 years. However, you can change the duration if you amend the articles, and you can also extend the duration beyond 12 years by conducting a members vote.
- Capital: This is an advantage as the capital required is only 1 euro. You can contribute the capital in any way such as through non-cash assets.
- Limited Liability: As mentioned above, this is a key point. Members of an IKE company have no risk of being a member in terms of financial risk beyond what they have contributed. There are only some very limited conditions where administrators have personal liability over tax or social security debts.
One thing to be careful of with an IKE company is the cost of compliance and running the company. As the process is a bit more complicated and there is more compliance involved, there is an increase in the monthly cost and yearly cost of maintaining the company from a tax and accounting perspective. You need a reasonable amount of income or revenue in order to justify the expense.
The process for creating an IKE company
To create an IKE company you need to use a private document and create it through the General Commercial Registry’s (GEMI) “One-Stop Shop. You will also require a notarial act if one of the Partners contributes real estate or if there is a legal requirements.
It’s a same day process if all your documentation is correct – and there is a requirement that a website is registered within a month of company formation.
When you make changes to the company’s regulations, address, purpose, or any of the terms or conditions / articles in the incorporation, this is generally completed through the GEMI portal.
Does an IKE company headquarters have to be in Greece?
When you establish an IKE company you need to list its headquarters in its Statute. It’s possible for IKE companies to conduct business overseas. When that is the case, they can still have an administrative office in Greece.
Generally speaking, the Statute of an IKE company, which is the foundation document, details everything you need to know about company rules, regulations and structure. A template is generally used, although when creating an IKE with other shareholders or personnel for business purposes, the rules and structure can be amended to suit your agreement if it’s not consistent with what is generally adopted.
How do I use GEMI and what is the GEMI?
The GEMI (Geniko Emboriko Mitroo) is your business number. The government uses this number for record keeping purposes and it’s a digital number (12 digits) that also give you access to one stop shops. The GEMI helps streamline business processes and government procedures and makes the process easier.
Is an IKE the best company structure in Greece for expats or overseas companies doing business in Greece?
There isn’t a yes or no answer to this question. It depends on the nature of your business and the structure of your business. It also depends on what your turnover will be, to what extent you are concerned about liability, and if you plan to ever list the business or raise funds.
You should consider all these factors and many more, including the costs of maintaining the company and the accounts, prior to choosing the company structure. Our accountants can help advise you on the best company structure for you to adopt – enquiry with our team today.