Setting up an IKE in Greece: what foreign companies should know

For a foreign company planning to enter the Greek market, the Private Company (IKE – Idiotiki Kefalaiouchiki Etairia) is usually the closest Greek equivalent to a private limited liability company. An IKE has separate legal personality, commercial status, may be formed as a single-member company, and, as a rule, only the company itself is liable for its corporate obligations. Greek law also gives significant flexibility to the founders, since the company capital is freely determined and may even be zero under the current legal framework. For most foreign readers, the most practical way to understand an IKE is as the Greek vehicle that comes closest to a Ltd / GmbH / SRL / SARL-type company, rather than to a partnership.

This is precisely why the IKE is often the preferred vehicle for Greek subsidiaries, joint ventures and operating entities. The incorporation process is handled electronically through the e-One Stop Shop (e-ΥΜΣ) platform. The official government procedure page states that the service is fully digital, that in standard cases no supporting documents are required, and that the official digital incorporation fee currently displayed is EUR 18. The same page also makes clear that a notarial deed is not required unless a special legal provision demands it.

For foreign shareholders, the key practical point is that a Greek IKE still requires proper local tax and corporate preparation. According to the official e-ΥΜΣ guidance, all legal entities participating as founders must have an active Greek tax number (AFM) and TAXIS credentials, must be lawfully incorporated, must be active, and, if they are commercial companies, must be registered with the relevant commercial register. For individuals from third countries who intend to reside in Greece, an appropriate residence permit is also required.

From a tax perspective, the first major advantage of an IKE is predictability. The latest AADE guidance for corporate income tax returns confirms that legal persons and legal entities are taxed at 22% on taxable profits. For a foreign parent company, this means that the Greek operation sits within a clear corporate tax framework, with its own taxable profit, deductible expenses, depreciation base and accounting result.

The second major advantage concerns profit distributions. Dividends in Greece are currently taxed at 5%. In addition, Article 63 of the Greek Income Tax Code provides for withholding tax exemption in certain intra-group situations, and the current framework ties that relief to core conditions such as a minimum 10% participation and a minimum 24-month holding period. At the same time, AADE maintains the official list of Greece’s Double Tax Treaties, which is a critical planning point whenever the shareholder of the Greek IKE is a foreign parent company.

A third tax advantage is that an IKE fully benefits from the Greek framework on deductible business expenses and available tax incentives. Tax losses may be carried forward for five tax years, while the current AADE guidance confirms both the general deductibility rule for business expenses and the availability of enhanced deductions for green, digital and e-invoicing investments, subject to the statutory conditions. For a foreign group planning a real operating presence in Greece, this can materially improve the tax efficiency of the initial investment phase and ongoing operating costs.

In practical numbers, if a Greek IKE reports EUR 100,000 of taxable profits, the corporate income tax at 22% is EUR 22,000, leaving EUR 78,000 after corporate tax. If that amount is then distributed and the general 5% dividend tax applies, the additional tax is EUR 3,900. The total Greek tax burden therefore becomes EUR 25,900, or about 25.9%, before considering any intra-group dividend exemption or the possible application of a relevant double tax treaty.

This does not mean that an IKE is always the right solution. In some cases, a branch, a société anonyme / S.A. structure, or a different holding arrangement may be more appropriate, especially where transfer pricing, VAT, permanent establishment risk, licensing or upstream financing issues are involved. Still, for most foreign businesses seeking a flexible Greek subsidiary with limited liability, a modern digital incorporation process and a clear corporate tax profile, the IKE is usually the first structure worth examining.

At N. KOLYDAS IKE, we support foreign companies throughout the entire process: selecting the right legal form, obtaining a Greek AFM, incorporating through e-ΥΜΣ, handling VAT and myDATA registration, providing ongoing accounting support and structuring cross-border tax compliance. A proper setup should always begin with a case-by-case review of the parent company jurisdiction, the applicable tax treaty and the intended funding model of the Greek entity.