Are you tired of your nine-to-five gig or passionate about a business idea that struck you some time back? Whatever be the reason to push you on the journey of starting a venture, you must prepare hard for what’s coming next. Establishing a business is no duck soup. It is blood, sweat, and tears, and delving into the layers of bureaucracy.
Have you been thinking of locating your dream startup in Greece? You must see into the business culture of the country, if you are a foreigner, know the documents you will need, procedures you will go through, etc. With its advanced and high-income economy, Greece renders itself a welcoming spot for entrepreneurs and investors alike. It is the sixteenth largest economy in the EU and 54th largest economy in the world which rests on the agricultural sector, industrial sectors, and service sectors. Furthermore, tourism is another sphere that makes substantial contributions to the overall GDP of the country. The location of Greece offers immense opportunities to new businesses in its remarkable internal-continental connection.
Incorporating and running a business anywhere is all Greek to the one who dodges the need to know the procedures, requirements, and formalities involved in the process of establishing a business. Although the process might be mind-numbing at times yet, having knowledge of the matters in one’s possession can ease your journey. And thus, we have created an ultimate guide to help you transform your ground-breaking business idea into reality. Read on!
How to start a business in Greece?
Starting a business in Greece is fairly simple. After you have consolidated your business idea and checked its profitability, go on to choose a legal structure for your company. In Greece, you can choose from the corporate company, sole trader, public limited company, limited partnership, limited liability company, and general partnership. Now, prepare a business plan which entails everything about your business, starting from its purpose, vision, and mission to your marketing strategy, budget, etc.
Thereafter, get your company registered with the Chamber of Commerce. At this step, you will need an approval certificate, a notarized copy of the lawyers’ pension fund, lawyers’ welfare fund, and the articles with eforia’s stamp. Next, you will need to register your company with the tax authorities, and then a tax identification number will be allocated to you. Get the applicable permits and licenses to operate your business legally. Now, your business must get a seal which needs to comprise a tax registration number. Finally, set up a bank account to carry out your business transactions and deposit your minimum share capital.
In the sections that follow, you will get to know the process of starting a business in detail. So, read on. Remember, the more you know, the better!
Process of setting up a business in Greece
Greece has been emerging as a stable and growing economy for a long while. Starting a business in the country is highly promising, thanks to its business enabling environment, low labor cost, free repatriation of the earnings and capital, and its strategic location that renders easy access to the markets of Europe, Africa, and Asia. To establish a venture in Greece, come up with a solid business idea and research its marketability and profitability. Once done with this step, you can head on with your passion and mojo to fulfill further formalities and procedures, which are discussed here.
- Draft a convincing business plan: Preparing a business plan entails all the steps that will clarify the potential of your business idea and where it can take you. For instance, you would be conducting in-depth research, analyzing your competitors, gauging the market size, knowing their strengths and weaknesses, understanding the demand and supply of the product/ service your business aspires to offer, etc. Having a comprehensive and convincing business plan will get you investors. And this is how it can aid your business in expanding itself.
- Choose the legal structure of your business: In Greece, you may choose from the following legal structures to incorporate your company:
- Public company
- Private limited liability company
- Greek general partnership
- Greek limited partnership
- Private company
It is important to choose the business entity type sagely, as it has several ramifications on your business. For instance, it will determine the taxes you will pay, liabilities, etc.
- Register the business: After you have decided on the legal form of your business, you will need to get it registered with the Chamber of Commerce. At this step, you will require a notarized copy of articles that bear a stamp from eforia, the lawyer’s welfare fund, the lawyers’ pension fund, and the Certificate of Approval.
- Procure a tax identification number: Send an application to the relevant tax administrative office to procure a tax identification number.
- Grab permits and licenses: Now is the need to procure business licenses and permits to operate your business legally. These permits and licenses are allocated by the directors that are accountable for business undertakings in different prefectures.
- Get a company seal: Having a company seal is a must when establishing a business in Greek, where it needs to have a tax registration number. The company seal is still utilized by Greek banks. Companies need a seal in the regular operations as well. After this step, when you hire your first employee, notify the Manpower Employment Organization.
Hiring Employees in Greece
Now that you have established your business and have got it officially recognized, it is time to hire employees and erect a solid staff. As an employer, you need to consider many things, so your investment in human resources eventually pays off and manifests in the growth of your venture. Furthermore, in budgeting everything starting from health insurance coverage to training program costs, you have to take stock of all matters.
On top of this, the administration presents big rule books which you must stick to when recruiting people if you are not fond of having a run-in with the law. The duties, entitlements, benefits, and responsibilities of employees as well as employers are stated clearly in the employment and labor regulations of an economy. With Zimyo by your side, all your human resources-related requirements are completely taken care of.
Here we have collated the ones you need to become familiar with within the context of Greece.
- Trial Period/Probation Period: As per Law 3899/ 2010, the probation period cannot exceed the duration of 12 months. Nonetheless, concerning the matter of unfair dismissal on the grounds of the employer’s abuse of the termination right, employees on the probation period bear the same rights as the regular employees who have been associated with a company for more than a year.
- Leave and Holidays: In Greece, employees are entitled to a minimum of 21 days of paid annual leave. In this period, religious and national holidays shall not be counted. That has been mentioned in Act 539/ 1945 of the Employment and Labor laws of Greece. Workers employed on a 6-day week must get 24 days of paid annual leave, while the duration is 20 days for those working five days a week. The duration of annual leave depends upon the length of service of the worker.
There are nine public holidays in Greece which are paid. Every employee is entitled to sick leave and cannot be fired for 6 months in case of injury, sickness, or accident. As per national labor law, sickness benefits shall not be provided to the employee during the first three days of leave. However, during the first six months of sickness leave, an employer must reimburse 45 percent of the basic wage to the employee.
- Maternity Leave: Maternity leave in Greece is set to 17 weeks, where eight weeks must be used before the expected date of childbirth while the remaining portions are used after that. Getting full payment for this leave is mandatory. In case the female employee is not in a condition to join back due to ill health or other serious concern, she must be granted additional six months of leave before initiating work in a flexible schedule. In case the childbirth occurs before the expected time, the remaining leave can be utilized post-childbirth.
- Termination of Services: Termination of indefinite term employment contract by the employer cannot occur in the following scenarios:
- On grounds of color, race, sex, political, philosophical, or religious belief, ethnicity, nationality, gender features, adherence to a non-union membership, or disability.
- On unserious grounds
- Termination of service in reaction to the observance of the lawful regulations of the employee.
- On grounds of exercising the rights in the scenarios of harassment or violence.
- Employees use their right to disconnect from the job.
- Becoming a father of an infant for upto six months in a row from childbirth.
When terminating the employee, the employer has to offer the essential severance pay to the employee. Employment and labor laws in Greece prohibit termination of contracts on the grounds of maternity, pregnancy, and parental or paternal leaves. When dismissing the employee, an employer must notify them of the reason.
- Pension: A worker in Greece is entitled to get a pension at the age of 67 years. However, the law provides an option of early retirement and late retirement as well. After reaching the pensionable age, an employee becomes eligible to procure a full pension.
A full pension may be reimbursed after contributing to social security for 40 years, and the person must be a minimum of 62 years old. To get the benefits of early retirement, an employee can get a reduced pension if the worker has contributed to 4500 insurance days at the cusp of 62 years.
- Work Hour Norms: Standard working hour rule in Greece is 40 hours in a 5-day week and 8 hours per day. This 40-hour workweek can be distributed in a six-days workweek as well under mutual agreement. In the case of the six-day work week, working hours are established at 6 hours and 40 minutes in a day.
Employees can be made to work hours beyond 40 hours/ week at employee discretion. However, the overtime hours must be paid with the basic hourly pay raised by 20 percent. In the case of a six-days workweek, overtime hours may amount to 8 hours for a week. Overtime cannot surpass the limit of 3 hours per day and 150 hours per calendar year. An employee must get a regular hourly pay increased by 25% if:
- he/ she works at night hours, for at least three hours
- Or if he/ she is likely to perform work at night for a minimum of 726 hours of the annual working time.
Employees are entitled to rest on Sunday or other public holidays; however, this too comes with certain exceptions, such as those working in the maritime industry, family enterprise, transport, vehicle repair, etc.
How easy is it to conduct business in Greece?
When it comes to an understanding of the environment of an economy with regards to starting a business, the Doing Business appears on the stage. It plays a role of an authority that peruses various factors affecting the process of starting and running businesses. Some of these factors are getting licenses and permits, getting electricity, trading across borders, filing and paying taxes, resolving insolvency, etc.
The World Bank prepares an index of these individual factors, then compares and ranks a country in these indices. The position and score of an economy in these sub-indices are estimated to prepare an Ease of Doing Business index. According to the Doing Business report 2020, Greece bagged 79th rank among 190 economies in the EODB index, which is compared and scored 68.4 out of 100. Now, let’s see where the country ranks on different EODB indicators to grasp how easy it is to conduct a business here. Read on!
- Starting a Business: Greece grabbed 11th rank in this sub-index as demonstrated by the Doing Business report 2020 and scored 96 out of 100. To confer a position to an economy against this indicator, the Doing Business measures the cost, procedures, and time involved in establishing a startup. In 2009, the country reduced the minimum share capital requirement, lowered the capital tax cost, and minimized the time it used to take for the publication requirement. To form a limited liability company in Greece, minimum paid-in capital of 25,000 Euros is needed.
- Managing Permits: To carry out the operations of a business legally, licenses and permits are indispensable requirements. You need to dash from one office to another to get them done. Doing Business measures the cost, time, and formalities it takes to gain permits and licenses. Furthermore, it also looks at the efficiency and quality of safety control and construction permitting systems. In this sub-index, Greece came at 86th position among 190 countries, per the Doing Business report 2020, and scored 69.5 out of 100. In 2019, the country made it compulsory for building owners to utilize the in-house engineer instead of the municipality for intermediate inspection.
- Getting Electricity: Electricity is another critical requirement that will drive you from one administrative office to another. The Doing Business estimates the ranks of economies on this sub-index by measuring the time, cost, and formalities involved in getting connected to the electricity grid. It also evaluates the tariff transparency and reliability of electricity supply in the country. In this sub-index, Greece came at the 40th position among 190 economies and scored 84.7 out of 100, as indicated by the Doing Business report 2020.
- Getting Credit: Credit finds many applications in businesses that help them grow. Lack of funding at the time when it is needed most often results in the shutdown of the entity temporarily or permanently. Credit information systems and funding systems render it easier to gain funds for businesses in some countries while challenging in others. And that’s what the Doing Business measures. According to the Doing Business report 2020, Greece came at 119th position among 190 countries and scored 45 out of 100. In 2010, the country considered the expansion of the amount of information distributed in the credit reports, thereby improving access to credit information.
- Managing Payroll: You may not know it, but payroll management is a significant factor that boosts employee morale and retains their loyalty. Having an efficient payroll management system integrated into the company brings up a professional image and financial stability. As a business grows, the size of the workforce increases correspondingly. Zimyo’s payroll management services will help you pay the wages on time and reimburse taxes and social security contributions as well while abiding with the laws.
- Paying Taxes: According to the Doing Business report 2020, Greece came at 72nd position among 190 countries and scored 77.1 out of 100. The rankings on this sub-index are conferred by studying the time, cost, and procedures involved in filing and paying taxes. In 2008, Greece reduced the rate of corporate income tax, thereby rendering the process less expensive.
- Enforcing Contracts: The Doing Business considers the time, cost, and outcome involved in the process of settling a commercial dispute. The Doing Business also studies the strength and efficiency of legal frameworks and court systems in enforcing contracts. According to the Doing Business report 2020, Greece came at 146th position among 190 economies and scored 48.1 out of 100. In 2015, the country introduced an electronic filing system for the users of the court, thereby rendering the process easier.
- Resolving Insolvency: Businesses may glide into insolvency due to many reasons such as poor financial management, revenue loss, credit loss, capital loss, etc. The insolvency laws of a country can either facilitate a venture in overcoming the condition and recovering from it, or they may oppose efficient recovery. The Doing Business measures the recovery rate, time, cost, and procedures involved in resolving commercial insolvency. Furthermore, it also assesses the legal frameworks and regulations governing the domain. According to the Doing Business report 2020, Greece came at 72nd position among 190 economies and scored 53.1 out of 100.
Greece is located in the vicinity of Africa, Asia, and Europe, which renders it a fortuitous place for internal-continental connections. Moreover, the country has a highly developed infrastructure for shipping which offers a platform to embark upon ventures in the nearby markets near Eastern Europe, the black sea, and the Balkans. The businesses that currently enjoy the most scope in investment in Greece are Tourism business, information, and communication technology, logistics, pharmaceutical company, marble business, football agencies, defense, aerospace, etc. Greece offers incredible opportunities for new businesses and ventures in its modern yet classic ambiance.
Zimyo is a leading HR and Payroll management services provider in Greece with multiple years of experience. The company helps businesses hire the best talent and takes care of the financial requirements of employees, such as advances or credit for a hassle-free work experience.