Set up a Foundation in Greece

The Greek legislation allows local and foreign parties to set up a foundation in Greece. The foundation is included in the category of non-profit entities, which define a set of legal forms created for other purposes than the one of obtaining a profit from a commercial activity. 

There are several types of non-profit entities, some of the most common being the foundation and the association. Our team of consultants in company registration in Greece can help you understand the legal differences between these entities and, of course, can help you incorporate a foundation or any other non-profit organization. 

What is the law on Greek foundations? 

The legislation regulating the creation of a foundation in Greece is different than the one applicable to legal entities set up for commercial purposes, as these fall under the regulations of the commercial law. Foundations in Greece can take several forms, as they are divided in 2 main categories, and these are:

1. public benefit entities; 
2. public benefit and private benefit entities. 

Those who want to set up a foundation in Greece must know that the main rules of law are the following: 

• public benefit foundations are regulated by the Law 4182/2013; 
• the incorporation of a public benefit foundation falls under the regulations of the same law mentioned above, Article 1 and Article 50; 
• private law foundations are regulated by the Greek Civil Code, Articles 108-121;
• the types of activities that can be developed by foundations are stipulated under the Article 174 of the Greek Civil Code and Article 178 of the same law;
• the incorporation of a foundation is done through a notarized deed, in accordance with the stipulations of the Article 109 of the Greek Civil Code. 

The legislation stipulates that the foundation gains legal personality once it is recognized by the Greek state. The same requirement is applied for those who want to start a company in Greece for commercial purposes. 

Regarding the registration obligations it must be noted that foundations have to register at a national level. Just as it is required for Greek company formation, the registration of a foundation must be published in the Government Gazette and, additionally, it must register with the Ministry of Finance. 

Another requirement imposed for the registration is to establish a board of directors and their responsibilities have to be clearly stated in the founding document (please mind that the law does not impose a certain number of members in the board of directors, the board can function with 1 director also). 

The difference between the 2 types of foundations is that the public benefit entity has to address a charitable purpose, or to serve an educational, cultural, religious or similar purpose. In practice, most of the foundations are incorporated to serve a public purpose. 

Do Greek foundations need a minimum capital?

While some Greek entities require a minimum share capital, which must be subscribed during the process of company registration in Greece, foundations are not imposed with this obligation. The only requirement that foundations must meet, from a financial point of view, is to have sufficient financial resources so that their goal can be achieved.

This is regulated under the Law 4182/2013, Article 50, which does not define a minimum amount, as for each foundation the minimum financial resources can vary, depending on its size, number of employees, purpose that must be achieved, and many others.

Still, the minimum amount will be determined during the registration process, when the competent authorities will evaluate whether the assets of the foundations are sufficient for its proper functioning. It must be noted that it is mandatory to own assets, as foundations that do not dispose of assets are declared invalid, in accordance with the State Judgement No. 4578/1996.

Can foundations carry out commercial activities?

Although the foundation is not an entity incorporated for commercial operations, in certain circumstances it can engage in economic activities, as it is the case of investors who open a Greek company, as long as specific conditions are respected. The main criterion foundations have to abide by is to develop economic activities that serve the purpose of the foundation.

Is it possible for a foundation to be the shareholder of a company?

The law does not restrict foundations from the right to own shares in commercial companies, therefore shareholding is possible. They can also be majority shareholders. There are certain limitations, however, which can be presented by our consultants.

When can a foundation benefit from tax exemptions?

Considering that foundations have as a goal the improvement of society in various sectors, the state grants the possibility to benefit from various tax exemptions, just as commercial entities can obtain them, but in different circumstances.

A foundation can apply for tax exemption only if it develops activities that are related to public benefit. The latter term can include activities such as:

1. cultural and/or historical preservation;
2. environmental protection;
3. medical care and health;
4. protection of animals;
5. humanitarian assistance;
6. advocacy against discrimination of all types;
7. civil, human rights advocacy, etc.

The tax authorities are the ones that will determine if the foundation qualifies for this right, in accordance with Article 1 of Law 4182/2013. Businessmen setting up a company in Greece can benefit from tax exemptions by an assessment of the same tax authorities analyzing the files of foundations.

What are the reporting obligations of foundations? 

Although foundations are not set up for commercial purposes, they do have tax and reporting obligations, just like in the case of commercial entities. Such entities need to justify their finances, as many of them obtain their money from donations and other similar financial sources. 

Therefore, they are required to submit financial statements and to prepare an annual financial report that will be analyzed by the Greek Ministry of Finance. The documentation must be submitted within the first 4 months after the closing of the financial year.  

If you want to set up a foundation in Greece, our specialists can provide further information on the incorporation of this structure. You can rely on our team of consultants in company formation in Greece for assistance on finding a suitable business address or setting up a bank account.