Yes — in most cases, foreign shareholders must obtain a Greek Tax Identification Number (AFM) before starting a business in Greece.
This is not a formal detail. It is a core prerequisite for company formation, tax registration, and any interaction with the Greek tax authorities.
Understanding when the AFM is required, how it is issued, and who needs one is essential for avoiding delays in the incorporation process.
1. What Is a Greek Tax ID (AFM)?
The AFM (Arithmos Forologikou Mitroou) is the unique tax identification number issued by the Greek tax authority.
It is required for:
- company formation
- tax registration
- banking transactions
- signing contracts in Greece
- VAT registration
Without an AFM, a foreign individual or company cannot legally participate in the establishment of a Greek business.
2. Is AFM Mandatory Before Company Formation?
Short answer: Yes.
In practice, the AFM is required before or at the very early stage of the incorporation process.
It is needed for:
- shareholders / partners
- company directors or managers
- legal representatives
- the company itself (after incorporation)
The One-Stop Shop (GEMI) process requires the identification of all parties involved. This identification is done through the AFM.
3. Who Needs an AFM?
Foreign Individual Shareholders
Always required.
Even if:
- they do not live in Greece
- they do not intend to relocate
- they are passive investors
Foreign Company Shareholders
The foreign legal entity itself may need:
- a Greek tax presence
- registration through a tax representative
Additionally:
- the legal representative of the company may also need an AFM
Directors / Managers
Required in most cases, especially if:
- they sign documents in Greece
- they represent the company before authorities
Tax Representative (if appointed)
Must already have an AFM (as a Greek tax resident or established professional).
4. Can AFM Be Issued Remotely?
Yes. In most cases, AFM can be obtained without physical presence in Greece.
This is done through:
- digital submission to AADE
- authorized accountant or tax representative
- power of attorney
The remote process is now standard practice, especially for:
- non-residents
- foreign investors
- international businesses entering Greece
5. What Documents Are Required for AFM?
Typical documents include:
- passport or ID
- proof of address
- contact details
- application forms
- authorization (if submitted by representative)
In some cases:
- residence permit (if applicable)
- additional documentation depending on country of origin
Accuracy here is critical. Errors at this stage delay the entire company formation.
6. When Exactly Should You Apply for AFM?
Best practice:
👉 Before starting company formation
Why:
- avoids delays in GEMI registration
- ensures all parties are ready
- allows faster tax activation
In structured setups, AFM issuance is the first step.
7. Common Mistakes
• Delaying AFM issuance
This is the most frequent mistake and leads to:
- stalled company registration
- missed timelines
• Incorrect or incomplete documents
Results in:
- rejection by tax authorities
- need for resubmission
• Not appointing a tax representative when required
Especially critical for non-residents.
• Assuming AFM = tax residency
This is incorrect.
Having an AFM:
- does NOT automatically make you a tax resident in Greece
- does NOT trigger taxation by itself
Tax residency depends on:
- place of effective management
- duration of stay
- business activity
8. Strategic Tax Considerations
This is where most foreign investors make mistakes.
Before obtaining AFM, you should consider:
- Will the company be tax resident in Greece?
- Who will manage the company?
- Will there be a permanent establishment?
- Are there cross-border VAT obligations?
- Will OSS apply?
AFM is not just administrative — it is part of the tax footprint.
9. Why Professional Support Is Important
AFM registration seems simple, but in cross-border cases it is not.
A specialized accounting firm ensures:
- correct classification of the applicant
- proper documentation
- compliance with AADE procedures
- smooth transition to company formation
This is particularly important for:
- non-EU residents
- foreign companies
- complex ownership structures
10. Conclusion
Yes, foreign shareholders generally need a Greek Tax ID (AFM) before company formation.
It is a mandatory step that connects:
- the individual or company
- the Greek tax system
- the business registration process
Starting without it will delay or block the entire incorporation.
