Traditionally, sales agents and distributors have handled a large amount of Greece’s import trade. There is no requirement for Agency agreements, and they can be signed for any period of time. Distributorship agreements, however, usually guarantee exclusive sales rights for certain districts, or for the entire country. Distributors operate on a wholesale, and in some cases, a retail basis. Importers usually maintain offices in Athens, Piraeus, or Thessaloniki with branch offices, subagents, and traveling sales staff covering the rest of the country. In certain cases, small importers may join to form cooperatives, but this does not suffice for them to keep up with the competition from foreign distribution companies.
Greek retail and wholesale trade had been characterized by small, family-owned, and operated businesses, each dealing with a narrow range of goods. Because liquidity is tight, many businesses find it difficult to finance purchases.
A handful of American-style shopping malls operate in Greece. Some retail stores operate on Sundays, particularly those in tourist areas, but many remain closed on this day.
Using an Agent or Distributor
The key to success in the Greek market is engaging the services of an experienced agent/distributor or joint venture partner with suitable business experience and access to the appropriate sales networks. The agent can also help identify possible political and micro-political angles to business decisions. A commitment to offering full after-sales support to the end-user, along with carrying spare parts, is also crucial.
Historically, the government of Greece (GoG) accounted for most major purchases, a practice that kept the market moving. Whether the end user is the GoG or the private sector, it is essential that local agents or joint venture partners have the knowledge and experience of operating in Greece’s business environment. Knowledge, experience, and good connections have always been vital to successfully participate in government tenders and develop private sales on behalf of U.S. suppliers. Low prices have been a main factor in government purchases along with strict adherence to specifications. Private sector purchasers are more likely to weigh price over quality, and credit terms have become a key factor in procurement decisions. Companies wishing to use distribution, franchising and agency arrangements need to ensure that the agreements they put into place are in accordance with EU and member state national laws. See the European Union Country Commercial Guide for more information.
Establishing an Office
In order to establish any type of business office in Greece, a certified, original copy of the company’s articles and relevant agreements needs to be filed with the Court of Misdemeanors. The next step is to register with EFKA, which is the uniform social insurance organization that replaced OAEE and certain other social insurance funds. Once this is done, the local Chamber of Commerce can issue the license number needed for a company to operate in Greece. These tasks are usually assigned to lawyers.
The traditional types of business organizations exist in Greece, i.e., Corporation, Limited Liability Company, General or Common Partnership, Limited Partnership, Sole Proprietorship, or Individual Enterprise, Cooperative, and Joint Venture or Consortium.
Under Greek law, joint ventures and consortia are not recognized as different forms of legal entities. The law governing joint ventures has been developed through court decisions and directives issued by the Ministry of Finance. In general, each participant in a joint venture is liable for his share of the total debt, plus for taxes. Current tax laws recognize the existence and special nature of joint ventures and provide specific rules as to the maintenance of the joint venture’s accounting records.
Foreign enterprises may establish operations in Greece. In the case of industrial projects, the foreign investor is generally required to organize a Greek corporation. The following laws are intended to support foreign investment, foster development, and reduce obstacles created by bureaucracy:
- Law 4146/2013 “Creation of a Business-Friendly Environment for Strategic and Private Investments” is the Greece’s main investment incentives law. Law 3908/2011, which provides incentives in the form of tax relief, grants, and allowances on investments in all key economic sectors.
- Law 3894/2010, which provides for fast-track licensing procedures for qualifying investments in the sectors of industry, energy, tourism, technology, telecommunications, health services, waste management and transportation.
- Law 3389/2005, which regulates public private partnerships (PPP).
The Investment Incentives Law L.4399/2016 consists of a statutory framework for the establishment of Private Investments Aid Schemes for the regional and economic development of the country.For the latest Investment Climate Statement (ICS) which includes information on investment and business environments in foreign economies pertinent to establishing and operating an office and to hiring employees, visit the U.S. Department of Department of State’s Investment Climate Statements website.
Franchising
Though franchising is a popular form of business, there is no specific law governing franchising in Greece. Franchising is governed by Greece’s Commercial Code. The Franchise Association of Greece has voluntary Code of Ethics, based on the European Franchise Federation’s code, which is sometimes wrongly understood as law.
Rental fees for retail space may have decreased significantly in Greece, but some businesspeople characterize rent for prime locations as too high. For retail space, landlords may ask for large down payments sometimes in the form of “key-money” (an under the counter lump-sum payment at the time the lease contract is signed) to alleviate risk of losses from what could occur in the future. The ongoing pedestrianization of Greek cities is expected to bring new opportunities to certain sports that were previously overwhelmed with street noise and vehicular traffic.
More information on broader EU legislation can be found on the website of the European Franchise Federation
Joint Ventures/Licensing
Licensing agreements have to be filed with the Industrial Property Organization and Greek tax authorities. All procedures for payment and transfer of royalties to EU and non-EU residents are handled by commercial banks operating in Greece.
U.S. firms should be aware that royalties are subject to a 20% withholding tax until the Greek company submits IRS tax forms obtained by the U.S. company showing residency in the U.S.
For more information, please link to the IRS Application for United State Residency Certification
Public tenders may have a stipulation that foreign bidders must submit their offers in a venture with a local company. In major projects, the utilization of local resources, (engineering services, manpower supplies, manufacturing, or assembly), is an important factor in bid evaluations. Foreign as well as local bidders must quote and accept payment in Euro, unless otherwise specified in the tender documents.
Express Delivery
There are several express delivery firms in Greece and their number increased during the pandemic. Overall, Greeks use them to ensure quick and reliable transport of their mail and/or parcel for both inside and outside the country. Major market players include semi-government ELTA courier, foreign firms FedEx, DHL, UPS, and Greek firms SpeedEx, and ACS courier. The standard delivery time to and from Greece to the United States is two days. The weight of the parcel and the CIF (Cost, Insurance, and Freight) value are factored into pricing. The fee may also increase due to the value and description type of the shipped item (dangerous, valuable, perishable) as well as by storage fees, which vary according to type. Finally, export shipments that require customs release are subject to an additional fee. Recently more shipment categories have become subject to customs charges.
Due Diligence
Greek banks adhere to OECD and EU Due Diligence rules and regulations. U.S. firms should consider utilizing the U.S. Commercial Service’s International Company Profile (ICP) service before signing an agency agreement, choosing a local partner to bid jointly on a major project, or doing business for the first time with a local company. ICPs are prepared at the request of U.S. firms and provide financial and background data on Greek companies. Please contact Office.Athens@trade.gov regarding the ICP due diligence service.