Start a Private Limited Company in Greece: What is an IKE?

The IKE, or Idiotiki Kefalaiouxiki Etaireia in Greek, is a type of private limited liability company. First introduced in 2012, it is the most common form of company in Greece, and requires a minimum of one euro of capital.

Due to its very minimum requirement, the private limited company is designed to meet the needs of SMEs, by creating a more flexible corporate type of company. This type of private limited company can have a business purpose like those of other companies, but it can also have a non-commercial purpose.

The Main Characteristics of an IKE (Private Limited Company) in Greece

• Separate Legal Entity: An IKE is a distinct legal entity, separate from its owners. It can own property and incur debts independently from its members.
• Members: An IKE can also be formed by just one person, making it a Single-Membered Private Company (SMPC).
• Company Name: The company's name must include “Private Company” or “P.C.”, or for single-member companies, “Single-Membered Private Company” or “S.M.P.C.”.
• Duration: The default duration of the company is 12 years unless stated otherwise in the Articles, and it can be extended by a members' vote.
• Capital: As mentioned previously, you only need a minimum of one euro to start an IKE. Each share must be worth at least one euro. Members can contribute in cash, non-cash assets, or by guaranteeing company obligations up to a specified amount.
• Limited Liability: Members' liability is limited to the amount of their capital contribution. The company is responsible for its debts with its assets, but members with guarantee contributions might be liable up to the agreed amount. Administrators could be personally liable for tax or social security debts under certain conditions.
• Management: The company is managed by one or more administrators.
• Social Security: Only the administrator and the sole member (in the case of a single-member company) must register with the local social security organization (EFKA).

How to Establish an IKE

IKE companies can be created by one or more people using a private document through the General Electronic Commercial Registry's (GEMI) "One-Stop Shop". A notarial act is only needed if required by law or if a partner contributes real estate to the company. If all necessary documents are submitted, the IKE can be established on the same day.

Additionally, an IKE company must set up a corporate website within a month of its creation. Any changes to the company’s regulations, such as its address or purpose, must be made through GEMI or the corporate website, without needing a notary or publication in the Government Gazette. If not specified in the regulations, the IKE company's duration is twelve years.

Unsure about what type of company is right for you? Read our guide, How to Open a Business in Greece in 2024.

Choosing Company Headquarters

The IKE's headquarters are listed in its Statute, but it doesn't have to be in Greece. An IKE can have its administrative office in Greece while conducting its financial activities in another country. By Statute refers to its foundational legal document that outlines its structure, rules, and regulations. This document typically serves as a formal guide for the company's operations and legal framework.

Partner Contributions

Partners in an IKE can make three types of contributions:

1. Capital Contributions: These are in cash or goods.
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2. Non-Capital Contributions: These are services specified in the Statute and provided for a set or indefinite period.

3. Guarantee Contributions: These involve taking on liability for company debts up to a specified amount, which must be stated in the Statute and cannot exceed 75% of the total liability against company creditors.

The Statute must detail the value of all contributions, whether made at the company's establishment or later. This variety in contribution types is a key innovation of the IKE, differing from other Greek companies that only allow cash or asset contributions.

Common Questions

What is a GEMI?

The G.E.M.I, or the General Electronic Commercial Register (Geniko Emboriko Mitroo) is a twelve-digit number that acts as a business record for the government and allows for 'one-stop shops'. Through the operation of a modern database of business registry, it will simplify the bureaucratic procedures to create or change a business. This number assists with the monitoring of commercial enterprises by the state.

What is the current taxation law for an IKE?

The IKE's total income is taxed at a rate of 26%. Additionally, profits are subject to a 10% withholding tax, which satisfies all tax obligations for this income. The withheld tax must be reported and paid to the relevant tax office within the month following the withholding.