Rhodes - Lindos Ave. 257, 851 00
Nordre Beddingsvej 24, Hundested 3390
Copyright © Volonakis Group 2014 - 2024 All rights reserved. Website developed byTechNoLogic
Copyright © Volonakis Group 2014 - 2024 All rights reserved. Website developed byTechNoLogic
For private clients we offer the following services:
Greek Employment Law
Termination of employment contracts in Greece
Termination of employment contracts in Greece is governed by Articles 669 et seq. Greek Civil Code.
Employment contracts can be concluded for both limited and unlimited periods. Fixed (limited) contracts of employment by rights end upon expiry of the period for which they were entered into (Art. 669 Greek Civil Code). Should the employee continue to offer his services after his period of service has expired, however, and the employer accepts these, this is regarded as a tacit extension of the employment contract. The employment contract is consequently regarded as being extended for an unspecified period. Either party can terminate a contract of employment for an unlimited term.
Pursuant to Article 7 of Law N. 2112/20, any unilateral amendment of the employment conditions to the employee’s detriment is deemed termination of the employment contract by the employer. This covers the cases of posting of the employee abroad despite it being against his wishes, for example, demotion to a lesser position and salary cuts.
Employment contracts for an unlimited term can be terminated as follows:
As a result of termination by the employee, Art. 669 §2 and 670, 672 Greek Civil Code,
As a result of the employee’s death or, in exceptional cases, the death of the employer, Art. 675 Greek Civil Code,
By the employer’s and the employee’s mutual consent in the cases of §1, Art. 8 of law 3198/1955, i.e. after completion of 15 years’ service, notwithstanding which the
In cases in which the employee acquires his employer’s business.
Under certain circumstances the employee’s inability to render service, which cannot be ascribed to illness, accident, military service or pregnancy, can be taken as tacit termination of the employment contract by the employee. In such cases termination is not automatically present, however, it must be verified and construed by the court as the case arises.
If the employer is not in a position to accept the employee’s services as a result of obstacles (e.g. due to force majeure), he is not obliged to pay the remuneration. This does not, however, by rights lead to termination of the employment contract. In this case too termination of the employment contract is required. The employee is, however, due two thirds of the statutory compensation (Article 6, §2 paragraph 2 of law N. 2112/20) in cases of force majeure.
In the event of insolvency the employer is obliged to pay the full statutory compensation (Article 6 §2 of law N. 2112/20 and Article 9 §2 of royal decree 16/18.7.20).
Employment contracts for a limited term can be terminated as follows:
Fixed employment contracts by rights cease when they expire (Article 669, §1 Greek Civil Code). Should the employee continue to provide his services after the period has expired, however, with the employer’s knowledge and the latter does not object, the employment contract is deemed to be extended for an unspecified term (Article 671 Greek Civil Code).
Either party can terminate the employment contract at any time for good cause without observing a period of notice. Contractual preclusion of this termination option is ineffective (Article 672 Greek Civil Code). Breach of contract can constitute good cause. In this case that party liable for the breach of contract is obliged to provide indemnification (Article 673 Greek Civil Code). In the event of a change in the personal circumstances or the assets of the employer, the court can award the employee appropriate compensation at its discretion (Article 674 Greek Civil Code). Other examples of good cause:
The employee’s opposition to and failure to carry out the employer’s instructions and the employee’s lack of professional suitability/qualifications,
The employee’s absence due to illness over years if this leads to problems in the business,
Violation of particular contractual provisions, if these provisions expressly stipulated that in the event of violation the other party would be due a right of termination, but without the obligation to pay compensation,
In the event of intentional insult by the employer.
In individual cases the employer can terminate the fixed employment contract without reason too. In such cases the employer is, however, obliged to pay the employee all wages up to expiry of the originally agreed employment contract.
The employee’s death or exceptionally that of the employer, leads to termination of the fixed employment contract (Art. 675 A.K.).
Cases in which the employee acquires the employer’s business lead to termination of the fixed employment contract too.
Compensation for loss of job (employee)
According to Greek law, in the case of due and proper termination of unlimited employment contracts by the employer, compensation is only to be paid from a minimum employment term of two months. Termination must be effected in writing and must be notified to the employment organisation (O.A.E.D. in Greek) having jurisdiction (Article 1, §1 of law 2112/20, as amended by Article 1 of law 4558/30). In this case the employee who has been dismissed will receive compensation for holiday which has not been taken.
The tiered compensation, based on the monthly salary, according to length of service, for ordinary termination by the employer (Article 1 of law 2112/20, amended by Article 1 of law 4558/30) can be seen from the following table:
In cases where an employer terminates an employment contract without observing a period of notice, the compensation is geared to the length of service. In the event of termination which complies with a period of notice, the employee whose post has been terminated is due half the respective compensation above.
NB.: For effective termination the employer must also offer the employee the respective compensation, mentioning the period of notice.
If the employee absents himself from work during the notice period, the employee shall be deemed to have terminated the employment contract. In this case he is not entitled to compensation. If, however, the employer releases the employee for the notice period, the compensation must be paid as normal. The period of notice is not offset against the length of service when calculating the compensation..
Employees who have several employment contracts at the same time are due a separate claim to compensation for each employment contract in the event of ordinary termination.
Basically it is necessary to quote (your own) tax reference in all dealings with the Greek finance authorities. The tax reference is also required for processing quite a lot of mundane private legal matters, so that in practice hardly anyone can dispense with obtaining a tax reference of their own.
Commencement of any kind of business in Greece always starts with the tax office, so that by this point at the latest a tax reference must be available, or one have been applied for.
A series of documents that vary depending on the company structure also have to be submitted for obligatory notice of commencement or cessation of any business activity.
We answer some frequently asked questions regarding allocation of a tax reference and commencement and cessation of business activity, but of course without making any claim to exhaustiveness and without liability.
Tax Greece – To which agency or authority in Greece must one apply for a tax reference?
Application for the tax reference (Greek: “AFM” = Arithmos Forologikou Mitroou) is generally made to the tax office having jurisdiction over the applicant’s domicile (Greek: “DOY” = Dimosia Ikonomiki Ypiresia). Different rules apply in some cases (legal entities, applicants without domicile in Greece, Tax Greece, etc.).
Which documents are required for a tax reference to be issued to a natural person with Greek nationality?
One copy of the completed form “M1″ (form is supplied by the tax office) is to be submitted on production of an officially recognised form of identification. If the application is submitted by a legally authorised person, the corresponding authority and a copy of the applicant’s personal identity card or passport must be submitted.
Which documents are required for a tax reference to be issued to business people in Greece?
All natural persons are allocated a tax reference in the same way as above, with no distinction according to professional status. The tax reference is allocated as part of commencement of trading where legal entities are concerned. The documents required are listed below.
Which documents are required in Greece for a tax reference to be issued to foreigners?
One copy of the completed “M1″ form and passport. If the particulars in the passport are not written in the Roman alphabet, a copy of an official Greek translation of the passport is required. Foreigners residing in Greece must also produce their Greek residence permits.
Is possession/use of multiple tax references permitted?
No! Pursuant to Article 4 of law 2593/97, ratified according to the provisions of §3b, Article 21 of Law 2948/2001, possession and/or use of more than one tax reference in Greece is punishable by a 4,400 euro fine.
Does the tax reference persist after business operations have ceased?
When partnerships cease trading, the tax reference for natural persons continues to apply to personal business. Tax references for legal entities, on the other hand, are deleted when business operations cease.
Which documents are required to notify the competent financial authority of commencement of business activities in Greece?
A) Partnerships
B) Partnerships (general partnership, limited partnership/Greek: OE, EE)
C) Company limited by liability (Greek: EPE)
D) Company limited by shares (Greek: AE)
Death certificate.
Debt and credit recovery and collection services. Litigation and Enforcement. Bailiffs, Process and Document Serving
What is debt recovery?
Debt collection is the activity of making individuals and businesses pay debts, usually ones that they have not paid on time or that they are refusing to pay. (Longman English Business Dictionary)
Debt Recovery Benefits
Fast payment: Customers normally pay faster once a Debt Recovery Lawyer is involved
Cost-effective: Under circumstances, we can take over a case on a no collection, no commission policy
Increased cash flow: Debt Recovery Lawyers can help increase your cash flow by reducing the amount of debts you have
Nationwide service: No matter where your debt is we can help. We provide a Nationwide Debt Recovery Service
Cost-effective We operate a no collection, no commission policy;
Low commission charges Our commission charges are low and only charged on successful collection;
Nationwide service No matter where your debt is we can help. We provide a Nationwide Debt Recovery Service;
More time for you By letting us collect your debts you have more time to spend running your business.
Starting with a phone call or a written demand
Volonakis Law Firm Law Firm approaches each case carefully and chooses the fastest and most cost effective way to secure debt recovery. Sometimes a phone call or a written demand of payment addressed to the debtor by First Class recorded delivery post will suffice. In other cases, the demand of payment must be served by a clerk, so that the debtor takes the letter more seriously.
Prior to preparing the letter, we usually obtain business information and profile report on the debtor, in order to have a better image of the debtor’s financial situation which enables us to select the most suitable method to handle the delinquent account and inform our client accordingly.
If the debtor cooperates, we consider possible solutions, which include the installment of plans and negotiations about any disputed matter. If such extrajudicial actions fail, only then do we instigate legal actions, choosing the appropriate remedy.
The client can rely on our smart and organized reporting system, which is ISO 9001 compliant. Every partner, associate and employee in our firm must respond to any client inquiry and notify the client in writing about any developments in the case within 24 hours. The client is therefore always kept up to date on his case.
Legal actions in Greece
Volonakis Law Firm Law Firm works extensively in the field of collection of debt and its execution in Greece and abroad. The firm regularly provides its services to American, English, Canadian and Australian clients in Greece and vice versa and is able to ensure the most effective result for each individual case.
Whether the chosen action is that of an action for recovery of money abroad or a cross-border dunning procedure, in each case, a decision is made on the basis of a feasibility study, which weighs up factors such as the length and cost of proceedings, national peculiarities, procedural and substantive law criteria, etc.
Application for an enforcement order in Greece
Pursuant to Regulation (EC) no. 44/2001, decisions issued and enforceable in another European Member State are enforceable in Greece provided a Greek regional court has furnished them with an enforcement order (c.f. Art. 38 of the Regulation). The same process and criteria also apply to public deeds admitted and enforceable in other EU Member States and judicially effected compositions. Regulation (EC) no. 44/2001 does not apply to the preceding areas mentioned in connection with the Convention: social security, insolvency, composition arrangements and similar procedures, and to decisions by arbitration tribunals (c.f. Art. 1 of the Regulation).
The application for an enforcement order must comply with the pertinent Greek provisions and must be directed by a solicitor in Greece (mandatory representation by a lawyer) to the regional court which has jurisdiction over the defendant’s domicile.
As the Greek court generally requires translations, it is advisable to submit these at the same time in order to save time.
Decisions from American, Canadian or Australian courts can also be enforced in Greece, but since the EU directives and regulations do not apply in these cases, a different procedure must be followed.
Grant of the enforcement order in Greece (example on German decision)
The Greek court may not review the German decision for its legality according to German law. If the application relates to a public document, the review is to be limited to due and proper issue of the engrossments according to German law. Recognition can only be refused if :
Enforceability and enforcement in Greece
Experience has shown that debtors in Greece frequently object to due and proper service according to German law, or other irregularities and it is not uncommon for them to undergo considerable delays in enforcement by exhausting all the legal remedies. Nonetheless, the hurdles are far from overcome with the grant of a legal declaration of enforceability. In Greece, for example, basically only half of the salary can be attached (with the exception of maintenance debts), whilst the emoluments of self-employed individuals are barely ascertainable. Valuables and assets are also often transferred to third parties in view of an impending risk of enforcement, whereas the enforcement claimant can only proceed within the scope of due and proper process.
Enforcement in Greece in practice
The laborious procedure and country-specific peculiarities with regard to the (non-existent) reporting register, Land Registry, banking secrecy, etc. all give rise to certain obstacles. It is therefore, essential before the recognition procedure commences, that a lawyer in Greece, experienced in debt collection, is instructed to check the debtor’s assets so as to ensure that the debtor does indeed have assets that can be enforced on realistic terms.
(Status: June 2010. No responsibility is accepted for any information provided, which is subject to alteration.)
The European Order for Payment Procedure
The European Order for Payment Procedure
The cross-border enforcement of claims was generally extremely costly and time consuming before, especially in the case of uncontested claims, where it is primarily the creditor’s rapid acquisition of a writ of execution that is sought.
As a result of Regulation (EC) no. 1896/2006 of 12 December 2006, which came into force in 2008, a European payments procedure has now been introduced with the aim of speeding up cross-border cases, whilst minimising the legal costs incurred.
Free circulation of European payment orders in Member States (excluding Denmark) has simultaneously been facilitated by the establishment of minimum standards. When these minimum standards are met the costs of recognition and enforcement are incurred in the Member State of enforcement.
1. Scope
a) Covered by the Regulation
The Regulation is to be applied in civil and commercial matters in cross-border cases, whatever the nature of the court or tribunal. A “cross-border” case is present within the Regulation’s terms if at least one of the parties is domiciled or habitually resident in a Member State other than the Member State of the court hearing the action. The authoritative time for this is the time at which the application for issue of a European order for payment according to this Regulation was submitted.
b) Not covered by the Regulation
Revenue and Customs matters, administrative matters and the State’s liability for acts or omissions in the exercise of State authority, on the other hand, are not covered by Regulation (EC) 1896/2006.
The following are also excluded from the regulation’s scope:
Matrimonial property regimes, the area of inheritance law including wills,
Bankruptcy, proceedings relating to the winding-up of insolvent companies or other legal persons, judicial arrangements, compositions and analogous proceedings;
Social security;
Claims arising from non-contractual obligations, unless they have been the subject of an agreement between the parties, or there has been an admission of debt, or they relate to liquidated debts arising from joint ownership of property.
2. Proceedings
Jurisdiction of courts to execute European orders for payment is determined by the provisions of Community legislation that apply to this, in particular Regulation (EC) 44/2001.
a) Applying for a European order for payment The regulation includes a form, standard form A set out in Annex I, to be submitted to the competent court when applying for a European order for payment, (download Application for a European order for payment form). Pursuant to Art. 7 of Regulation 1896/2006 the application must include the following details:
The names and addresses of the parties and their representatives and those of the court to which the application is made;
The amount of the claim, including the principal and, where applicable, interest, contractual penalties and other costs;
When interest is claimed, the interest rate and the period for which interest is claimed, unless statutory interest is automatically added to the principal according to the law of the originating Member State;
The cause of the action, including a description of the circumstances invoked as the basis of the claim and of the interest demanded;
A description of the evidence used to substantiate the claim;
The reasons for the jurisdiction;
The cross-border nature of the case within the terms of Article 3.
The court to which an application for a European order for payment has been made considers the completeness of the information, and whether the claim is well-founded, i.e. it is not manifestly unfounded. The court gives the claimant an opportunity to complete or rectify the application, unless the requirements specified in the Article have not been fulfilled and the claim is not clearly unfounded or the application inadmissible. The rectification or completion must occur within a deadline set by the court.
b) Issuing a European order for payment
If the conditions are met the court issues a European order for payment within 30 days of the application being lodged. The order is then served on the defendant. Any periods of time granted for the claimant to rectify his application are not taken into consideration when calculating the 30-day period. The defendant is informed that he or she has the option of not paying the amount of the claim and contesting the order.
c) Contesting a European order for payment
Pursuant to Art. 16 of Regulation (EC) 1896/2006, the defendant can lodge a statement of opposition within 30 days of the order being served on the defendant. If the statement of opposition is lodged in time, ordinary proceedings are commenced before the competent courts in the originating Member State unless the applicant applies for the proceedings to be terminated.
d) Enforcement
If the European order for payment is not contested, the court declares this immediately enforceable and sends the claimant an enforceable copy for the purposes of execution. Basically all other Member States recognise and enforce the enforceable European order for payment without the need for an exequatur for a declaration of enforceability.
It is, however, worth noting that in some specific exceptional cases (Art. 20, 22,23 Regulation (EC) 18296/006) the European order for payment may be reviewed, or enforcement can be suspended or even refused. Enforcement arising from the European order for payment otherwise occurs on the same conditions as an enforceable decision in the enforcing Member State (Art. 21 of the Regulation).
3. Costs
The court costs of a European order for payment, and ordinary civil proceedings connected with a statement of opposition to the European order for payment in a Member State must not exceed in total the court costs of an ordinary civil case without a prior European order for payment in this Member State (Art. 25 of Regulation).
Photovoltaic Greece – Volonakis Law Firm-Partnering international businesses in Greece
Law 3851/2010 on Accelerating the Development of Renewable Energy Sources to Deal with Climate Change – Photovoltaic Greece
The law’s national objectives for photovoltaic in Greece are:
The changes are detailed below:
Determination by the RAE, in cooperation with the system and network operators, or in cooperation with the operator for the islands not connected to the integrated system, of the connection point and the manner and type of connection must be carried out within 20 days of submission of the application. This action must be taken before the licence is issued and is at the RAE’s discretion.
The RAE examines whether the criteria are met, as well as the requirements for the licence to be issued, or the completeness of the file submitted, within 2 months of submission of the application. The submitted file is deemed to be complete if no additional documentation is requested in writing within 30 days.
The decision will be published on the RAE’s website and sent to the Minister of the Environment. It must also be published in a daily newspaper. The minister has a period of 20 days for review. If there is a legal interest an appeal against the licence can be filed within 15 days of publication thereof on the RAE’s website. The Minister of the Environment must review this appeal within 20 days. After this deadline has expired abortively, the appeal is deemed to have been rejected.
The decisions are moreover recorded in a register.
The persons who ensure financing of the project must not be one and the same person as the licence owner. They must, however, be verified beforehand by the RAE in accordance with the above criteria with regard to the financing capacity and then their data included in the licence if the requirements are met.
The licence is issued for a period of 25 years and can be extended by the same period. What is known as the installation permit must be obtained within 30 months from grant of the production licence, otherwise the production licence lapses. Applications for extensions in this respect are possible on certain conditions and before expiry of the specified deadline.
In the event of the licence data changing, the licence must be adapted accordingly. To do this the licence holder makes a change application to the RAE. A decision will be made on this application within 60 days of submission. The decision is also published and entered in the register. There is in addition provision for cases not requiring a change application, such as if the installed capacity or the maximum generation capacity of the plant connected to the system or network increases by 10%. The exceptions governed by Section 3, para. 5 still include a duty of notification.
After appropriate approval by the RAE, the licence owner may transfer its licence to other natural persons or legal entities if those criteria mentioned in Section 1 are fulfilled. The deadline for obtaining the installation permit will not be extended as a result!
Obtaining the production licence is a prerequisite for also obtaining the other permits up to and including connection to the network. It does not exempt the licence owner from obtaining all other permits and licences for which the legislation makes provision.
Exceptions to the licensing requirement Those project operators who intend to operate a photovoltaic plant with an output of up to one (1) MW are excluded from the obligation to obtain the abovementioned licence. This applies to all the arrays operated by one and the same project operator on a piece of real estate. In the latter case the payment is made on the basis of the total output from all arrays, consequently not every array on the same piece of real estate is calculated separately. For the latter category of plant of up to 1 MW, it is further stipulated that these plants (!) must not be sold before they are commissioned. As an exception these can, however, be sold to legal entities if the purchasing company’s capital stock is fully owned by the transferring company. Finally (after submission of application) system and network operator DESMIE must undertake all the requisite activities to connect the plant if refusal is not justified for a technical reason. On signature of contract with DESMIE the latter authority checks the applying company’s ownership rights to the real estate on which the plant is to be installed. In areas where energy generation is “saturated” or has limited possibilities this category of plant is preferred.
There is no longer a requirement for the previous expert report on initial evaluation and appraisal of environmental compatibility.
The general secretary of the region is responsible for issuing the installation licence. This must be issued within 15 days of completion of the review process. This review must, however, have been carried out within 30 days of the application.
After the RAE has issued the production licence, the following licences and documents must still be obtained for the installation permit to be issued: a. A quotation for connection to the network b. Decision on environmental compatibility (EPO) c. A permit from the Forestry Department, if required, and any other permit required for the beneficial rights to the real estate.
Within 4 months of the application being submitted DESMIE will issue the connection quotation, which becomes res judicata from the point at which either the EPO or the corresponding certificate regarding the environmental compatibility inspection being unnecessary are issued. The final connection quotation is valid for 4 years and is binding upon both DESMIE and the holder.
From issue of the quotation the eligible party is obliged to take all other steps, such as issue of the installation permit and signature of the contract with DESMIE.
A comprehensive file and an environmental study are to be submitted to the competent authority in order for the EPO to be granted.
If the conditions are met the decision on environmental compatibility must be issued within 4 months from submission of a comprehensive file. The submitted file is deemed to be complete if no other documents are requested in writing within 20 days of submission of the documentation. This decision on environmental compatibility (environmental requirements) is valid for 10 years und can be extended twice by the same length of time if an application is submitted up to 6 months before the validity expires. Overall it must be stressed that the process for grant of an environmental compatibility decision (EPO) will henceforth be carried out within the scope of the installation permit award process, and consequently has been moved to a later point in time.
The installation permit is also published and is still valid for 2 years. The installation permit can be extended once by the same length of time if there is compliance with the statutory requirements for this.
The operating licence must be issued within an exclusive period of 20 days and is valid for 20 years in the case of PV plants. In this case, too, there is provision for extensions.
If the plant is transferred the new owner enters into the rights and obligations of the old owner in respect of DESMIE. In this case the new owner will transfer the production licence by means of a corresponding RAE decision. Furthermore the competent authority shall decide on transfer of the operating licence.
No installation permit and operating licence must be obtained for such PV plants as are excluded from obtaining a production licence. The environmental compatibility inspection, including grant of the decision according to Section 4, must be thorough. Only PV plants on open land having an output of up to 500 KW and plants that are erected on buildings are excepted. In these cases a corresponding certificate of exemption from this obligation must be obtained within 20 days from the region having jurisdiction. In addition to the installed capacity, whether a plot of land lies within the scope of NATURA 2000, or is at a distance of less than 150 m from another arable field for which a permit has also been issued, will be inspected as part of grant of this certificate.
A register of the installation permits and operating licences issued will also be set up and kept by the Ministry of the Environment. This Register will also record production licences and possible exceptions to this obligation.
in the connection contracts with DESMIE all plants which do not require a production licence according to the above regulations (special authorisations) will be set an exclusive deadline for connection. Compliance with this deadline is associated with imposition of payment of a guarantee or a contractual penalty due in the event of non-compliance with the deadline. A separate ministerial decision which is yet to be promulgated will regulate the specific requirements and penalties. Those contracts which had already been signed before this law came into force are excluded from this.
The contract with the network operator for sale of electricity generated is valid for 20 years. An extension option is possible after both parties have agreed thereto in writing, as long as the production licence is still valid.
The input tariffs for photovoltaic plants are as follows:
Year-Month Integrated network Islands not connected to the integrated network
>100 kW <100 kW
26. The tariffs are adjusted by 25% every year on the basis of the previous year’s consumer price index. Operators who had already concluded a connection contract at the time this law came into force and who are operating the plant can amend their contract and adopt the input tariff for February 2010 from the table above. In this case the abovementioned adjustments to the tariff will be carried out according to the arrangements made in this law. The rules of Art. 27A of law 3734/2009 will otherwise apply.
Other important changes and innovations:
According to the new draft law the offshore plants should be developed further and the new provisions therefore focus on these. For this reason a public tender process is also to be held for the offshore plants. The Minister for the Environment will issue the licence for these plants. The individual requirements for installing and operating an offshore plant will be stipulated in ministerial decisions yet to be promulgated. In addition the environmental compatibility procedure must also be carried out for these plants. Redistribution of the special RES levy (3%) represents an important change too. According to this, a considerable proportion of receipts from this levy (1/3) will be channelled on the one hand to local households in the community within which operation of the project plants has been authorised and partly to the municipality itself. The municipalities in which the installation of parks has been authorised ought basically, therefore, to incur lower electricity bills. The remaining receipts from the RES levy are supposed to be channelled to the Special (“Green”) Fund for implementation of regulatory and environmental plans. Within the scope of this legislation special importance is being attached to the aspects of development of the communal economy, environmental protection and social support. Plant operators are exempt from payment of this levy. Investment in and installation of a plant should henceforth be possible on areas of land previously classed as agricultural land with a high level of agricultural use, In these cases the licence will only be granted if not more than 1% of these areas in the respective prefecture are used to operate plants of this type. Furthermore it is not necessary to obtain a building permit for installation of a PV plant, although a permit to carry out small-scale activities, known as the eggrisi ergasion domisis mikris klimakas, is necessary (confirmation). Separate regulations are also included for installation of photovoltaics on roofs.
In conclusion it can therefore be established that the following positive changes have been stipulated in this law:
What happens if someone dies in Greece without leaving a will (intestate)?
Someone is said to be intestate when that person has died without leaving a will. Intestate inheritance provisions apply in Greece. Such provisions are applicable where:
Forced Inheritance share in Greece
Volonakis Law Firm , attorneys-Partnering international businesses in Greece
Minimum forced inheritance share in Greece (“Nomimi Mira”)
In stark contrast to what applies in other countries like the United States, in Greece the minimum forced inheritance share (“nomimi mira”) limits a testator’s right to dispose of his estate freely.
The underlying aim of the minimum forced inheritance share is the safeguarding of the testator’s close relatives and spouse.
What is a minimum forced inheritance share?
Pursuant to Articles 1825 to 1845 of the Greek Civil Code 1825 (CC), a testator is prohibited from excluding from his will his children, spouse and parents. A part of the testator’s estate must be distributed to the above relatives. The minimum forced inheritance share must be equivalent to half of the inheritance share that each individual family member would be legally entitled to, had the testator died intestate (i.e. without leaving a will). However, the minimum forced inheritance share is reduced accordingly where any contributions that the testator may have granted to each of the above heirs while living, are found.
When does minimum forced inheritance share apply?
The law relating to the minimum forced inheritance share applies in the following circumstances:
What happens if inheritance share is refused?
In conclusion, certain legal consequences arise if the minimum forced inheritance share is not bequeathed in the event of a will. The will is effectively nullified and deemed void as far as the minimum forced inheritance share is concerned.
Wills in Greece & their publication
Partnering international businesses in Greece-Wills in Greece & their Publication
Article 1710 of the Greek Civil Code (GCC) provides for the disposition of an inheritance by will. There are three distinctive types of wills in Greece. Each type of will has unique characteristics.
In this article we shall discuss the particular traits of each type of will and offer a brief explanation as to how each of these wills is published. A will may be (1) self-written (2) public or (3) secret.
A self-written will is a will that has been written, dated and signed by the testator himself [01]GCC Article 1721. Such a will may be composed on any other material and by any other writing instrument besides a pen or paper i.e. it may be composed by mouth if the testator is disabled, on the bark of a tree, on animal skin, on a wall or by blood etc. [02]2nd Volume, 3rd edition Interpretation of the GCC pg.2192. Whoever is in possession of a self-written will is under a duty, upon being notified of the testator’s death, to immediately publish it in the First Instance Court of either the last residence of the testator or his own [03]GCC Article 1774. If the person who is in possession of the will resides abroad, he may present the will for publication at the Head of the Consular Office [04]Ibid. Article 1775; the former and the latter, in turn sign a document confirming that the will has been delivered to the latter.
A public will is drawn by a testator’s statement of his last act in the presence of a notary public and three witnesses or in the presence of two notaries and one witness [05]Ibid. Article 1724. A public will must contain the following information
[06]Ibid. Article 1732:
Notes:
Inheritance Tax in Greece – legal information from Greek Lawyers Volonakis Law Firm
Inheritance tax in Greece recently changed significantly, mainly in regards to the tax levied on the inheritance of great value for close relatives. This amendment was introduced by law no. 3815/2010, which amended art. 29 of the code on inheritance, gifts, tax, parental benefits and profits from lottery (law no. 2961/2001). In particular:
According to article 29 par. 1 of law no. 2961/2001, the beneficiaries of the inherited property (heirs, legatees, shareholders and any persons who acquire property through inheritance) are classified into three categories:
1. The first category consists of a) the spouse of the deceased, b) the descendants of the first degree, c) the descendants by blood of the second degree d) the ascendants by blood of the first degree. In particular, with regard to the adopted descendants, the law stipulates that they are to be treated as natural children. In exceptional circumstances, the Head of the Public Financial Services may consider that such children cannot be treated as relatives, if he is informed that the adoption process was carried out with the sole purpose of circumventing the provisions of law no.2961/2001.
2. The second category includes a) descendants of the third and subsequent degrees, b) ascendants of the second and subsequent degrees, c) voluntarily or judicially recognized children against the ascendants of the father who acknowledged them, d) descendants of the child that was voluntarily or judicially recognized against the father who recognized the former against the former’s ascendants, e) the siblings, f) the collateral blood relatives of the third degree, g) the stepfathers and stepmothers, h) children from the previous marriage of the spouse, i) the children by marriage (groom, bride) and j) the ascendants by marriage (father-in-law, mother-in-law).
3. The third category consists of any other person.Pursuant to par. 2 of art. 29 of law no. 2961/2001, assets acquired because of death are hereby levied tax in accordance to the following tax scale:
In relation to the taxation of real estate property, the “objective value” of the real estate is taken into account. The “objective value” amounts to the value which arises on the basis of certain objective evaluative information, such as the area in which the real estate is situated, its size, its age etc. In order to estimate the value of a real estate one may refer to official charts which can be found in the Public Financial Services of Greece; the value is calculated (and is binding) subject to these charts which are kept up to date usually every few years from the Ministry of Finance.
Calculation example: A, whose closest relative was his son, B, and his brother, C, dies and pursuant to his legally valid will, he bequeaths to B, a flat of an “objective value” of 160.000 € and also bequeaths to C another flat of an “objective value: of 50.000 €.
According to the provisions of law no. 2961/2001, as currently in force, the inheritance tax which B and C will be obliged to pay is calculated in the following way:
In respect of B: real estate value of 150.000 €. We detract 150.000 € from this amount, which, as we mentioned above, is exempt from tax. The amount of 10.000 € which remains, will be taxed at 1%. Thus, B will have to pay the amount of 100 €.
In respect of C: real estate value of 50.000 €. We detract 30.000 € from this amount, which is exempt from tax in relation to the second category of heirs. The amount of 20.000 € which remains, will be taxed at 5%. Thus, C will have to pay 1.000 € as inheritance tax.
The third category of heirs, which includes the rest of the relatives besides those of the first two categories and any other third person, is levied tax in accordance to the following tax scale:
Calculation example: A, whose closest relative was his son, B, and his brother, C, dies and pursuant to his legally valid will, he bequeaths to B, a flat of an “objective value” of 160.000 € and also bequeaths to C another flat of an “objective value: of 50.000 €.
According to the provisions of law no. 2961/2001, as currently in force, the inheritance tax which B and C will be obliged to pay is calculated in the following way:
In respect of B: real estate value of 150.000 €. We detract 150.000 € from this amount, which, as we mentioned above, is exempt from tax. The amount of 10.000 € which remains, will be taxed at 1%. Thus, B will have to pay the amount of 100 €.
In respect of C: real estate value of 50.000 €. We detract 30.000 € from this amount, which is exempt from tax in relation to the second category of heirs. The amount of 20.000 € which remains, will be taxed at 5%. Thus, C will have to pay 1.000 € as inheritance tax.
The third category of heirs, which includes the rest of the relatives besides those of the first two categories
Calculation example: A bequeathed by will to his friend, B, a real estate valued at 90.000 €. According to the above chart, provided B accepts the inheritance, she will have to pay: for the amount of 72.000 €, tax at 13.200 €. The remaining sum of 18.000€ (= 90.000€ – 72.000€),will be charged at a rate of 30% and so tax reaches to the amount 5.400 €. Consequently, B is obliged to pay a total tax amount of 13.200 + 5.400 = 18.600 € for an inheritance with a value of 90.000 €.
Moreover, law no. 3815/2010 has significantly amended par. 4 of art. 29 law no. 2961/2001, which now provides that funds acquired by cause of death are subject to tax which is calculated independently at a rate of 10%, in regard to heirs of the 1st category, and at a rate of 20% in respect of heirs falling within the second category.
Greek Inheritance Law – Legal Information – Partnering international businesses in Greece
The Greek Inheritance Law is regulated by the Greek Civil Code, Art. 1710 – 2035. It is quite similar to French and German Inheritance law, but is quite different from English and American inheritance law.
A deceased person can decide what will become of his property by leaving a will, which can be entirely handwritten by him personally, or executed before a public notary under the presence of three witnesses. The law provides also for a third kind of will, called a secret will, where the testator hands the will to the notary public, and the latter is obliged to seal and keep it until the testator’s demise.
Before deciding to prepare a will, Greek Americans and Greek Australians who have acquired American or Australian citizenship should contact a lawyer, in order to check according to which law the will must be prepared. This is very important, since according to Greek private international law, a deceased person’s estate is regulated by the law of the country of his last citizenship.
The notary public or any person who has access to a deceased person’s handwritten will, is obliged to notify the court about the existence of greece will inheritance and submit it in original. The Greek Probate Court is obliged to make it public, so that every person having an interest in its contents can have access to it.
If the deceased has not left a will of any kind, or the will is void for any reason or settles only a part of its property, this person is considered to be in intestacy, and its succession is regulated by provisions of the law. The legal heirs are organized by the law in 6 categories, called “classes”.
If the deceased did not have a spouse or another relative of the previous classes at the time of death, then the property goes to the Greek State.
It is worth mentioning that in case a will does not leave a share in the property to either the spouse, the children or the parents of the decedent (in the last case only if he did not have any children), then these relatives have a right by law to claim a minimum share in the inheritance. This is called “nomimi moira”, which equals half of the inheritance share in case of intestacy. If the deceased had made any donations to each of the above heirs while living, the right to a minimum share can be lost, if the donations cover their minimum share.
Greek Inheritance Law provides for a deadline of 1 year to renounce the right to a Greek inheritance, if either the decedent had his domicile abroad, or the heir has its domicile abroad when he became aware of the passing and of his right to a Greek inheritance. It is thus very important to renounce the inheritance within the 1-year deadline, since the heir could bear significant risks, if the inheritance contained debts or other obligations of the deceased person.
A brief look into the Greek Civil Litigation System
Greek Civil Proceedings – Greek legal Information
In Greece, commercial disputes of a substantial size are frequently settled by court litigation which is primarily governed by the rules set out by the Greek Code on Civil Procedure (GCCP).
The Allocation of Cases
Cases in Greece are assigned to certain courts according to their financial value or the court’s territorial competence; the latter is determined by the parties’ residence, place of business or by the cause of action itself. There are three types of civil courts of first instance:
The Court of Peace which hears claims valued up to 12,000 €
the Single-Member Court of First Instance which hears claims valued between 12,000.00 € and 80,000 € and the Multi-Member Court of First Instance which hears claims valued above 80,000 €.
Limitation Periods
One must be aware of is the limitation period that applies to bringing a claim before a Greek court. The limitation period is triggered either (1) the day following the day on which the cause of action arose or (2) the day the claimant either found out, or with reasonable vigilance, ought to have found out that a cause of action had arisen. The limitation period ceases to run when the originating process has been served.
Although the GCCP provides a general limitation period of twenty years, there are numerous exceptions to this rule. A five year limitation period applies in the case of commercial claims, professional fee disputes, motor insurance claims and torts while claims of unfair competition must be brought within 1.5 years pursuant to a recent amendment of the 1914 Unfair Competition Act law no.146. Furthermore, land possession claims are time-barred for a year while claims arising from a contract for national transportation by road are time-barred after six months.
Foreign & Greek Lawyers
Unlike in other countries like the United Kingdom and the United States, Greek lawyers are not solicitors and barristers but fall instead under the general title of “dikigoros” (“lawyer” in Greek); a Greek lawyer’s capacity to secure rights of audience depends on the type of court.
In order for a foreign lawyer based in an EU Member State to conduct cases in the courts of Greece, he must have registered with the bar association of the Greek town or city in which he will practice [01]Directive 98/5/EC on the practice of the legal profession in member states. A foreign lawyer must hold a certificate verifying his registration with the competent authority (i.e. Law Society, Solicitors Regulation Authority) in his home Member State if he is to be registered as a practicing lawyer in Greece.
Greek Lawyers’ fees & Funding Litigation
Minimum fees charged by lawyers in Greece are set at 2% of the financial value of the claim in respect of filing an action or an appeal and 1% for filing a pleading [02]Lawyer’s Code. Such fees are usually paid at an agreed lump sum rather than at an hourly rate. However, it is of particular concern to note that the above fees are not always charged in practice. Instead private agreements where the parties negotiate the fee amount, result in the provision of higher or lower fees. It is also common for parties to agree that the costs and fees will be born by the lawyer who will be entitled to 20% of the value of the claim if successful.
The client is obliged to pay for fees and disbursements and a court duty of 0.7% of the claim value (excluding any claims for interest) where the claim is of an executionary nature i.e. the claimant seeks an order compelling the defendant to pay a certain amount of money.
The law provides that the unsuccessful party pay the costs of the successful party [03]Article 176 CCP although Greek courts frequently oblige the former to pay a fraction of the actual costs incurred by the latter. Greek courts do not award interest on costs although interest is payable on all judgements which order the payment of money at least from the day the action commences and possibly from the day the cause of action arose; the rate is set by statute at regular intervals.
Insurance is available for litigation costs [04]Legislative Decree 400/1970 whereby the insurer contractually agrees to cover any future litigation costs of the insured either during the proceedings or by an out-of-court settlement. It is imperative that the insurance policy ensures that the insured can freely choose his legal representative.
Court proceedings in Greece are normally held in public. However, where such publicity would be detrimental to public order or moral values, then the proceedings are treated as confidential on the court’s initiative or at the claimant’s request [05]Articles 113-114 CCP.
In the majority of cases, there are no pre-action requirements in Greece that parties should satisfy before proceedings commence.
We will now examine the key stages of civil proceedings in Greece in order to create a brief outline as to how a case advances.
Stages in Civil Proceedings
Proceedings begin by filing an action document (‘agogi’ in Greek) which states the names and addresses of the parties and the particulars of claim which provide the material facts as alleged by the claimant. A list of the remedies sought and a statement of value, where money is being claimed, are also contained in the action document; the claimant must specify the exact amount sought at the beginning. The court issues proceedings by sealing the action document with its official seal and, on that date, it also allocates a trial date, which must be within twelve months of filing, to the action in question [06]Statute 3346/2005. We should note that time stops running for limitation purposes only after the action document has been served on the defendant. This is of particular importance where the defendant resides in another Member State since, according to EU legislation, the service of documents is deemed to have been fulfilled only when the defendant has received such document.
In Greece, the only method of service is by court bailiff instructed by the claimant to serve the action document on the defendant. Service of an action document on a defendant who resides in Greece must be effected at least sixty days prior to the hearing whereas service on a defendant abroad or of an unknown residence must be effected at least 90 days prior to the hearing [07]Article 228 CCP. It is noteworthy to mention that both the claimant’s and defendant’s pleadings are filed with the court on the same day.
The following stages apply only to the Multi-Member Court. After the action has been served, the claimant serves notice by which he invites the defendant to meet in order to negotiate a pre-trial settlement [08]Article 214(a) CCP. The parties must meet between the fifth day after service of the action and the 35th day before trial. Following this, any person who wishes to obtain affidavits by witnesses serves notice before either a Justice of the Peace or a notary public. Next, pleadings and documentary evidence are filed; this must be done 20 days prior to the trial. The trial follows and it is effectively completed within the same working day on which it began. After the trial, each party files supplementary pleadings in which they respond to the pleadings and evidence of the other party or parties. There are two sets of pleadings: one is filed 15 days prior to trial while the other is filed eight days after the trial. During the trial, only comments on the testimonies of witnesses are examined in court. The judgement comes next and it must be drawn up and sealed within eight months of the trial [09]Statute 3327/2005. The appeal follows and it must be filed within 30 days of the service of the judgement by one party on another or within three years of the day the judgement was drawn up and sealed by the court but note served on the other party. Finally, the judgement is enforced.
In respect of the Court of Peace and the Single-Member Court, all evidence and pleadings are filed on the day of the trial.
The following final remedies are available at trial stage: specific performance or damages, a declaration of the existence or non-existence of a legal relationship and the creation, transformation or rescission of a legal relationship.
Interim Measures
Contrary to what applies in other jurisdictions, active case management and interim proceedings do not occur in Greek civil proceedings. Unless parties seek an interim injunction, there are no interim applications the parties can make. For example, statements of case are not made and summary judgement is not available. The only document that is required to be filed and served before the case reaches the trial stage is the action document. In the event that a cause of action or defence is unreasonable, ill-founded or indicative of an abuse of process, such an action will be rejected at the end of the trial and judgement entered to this effect.
In matters of urgency, a claimant may apply for an interim remedy e.g. where a claimant believes the defendant’s alleged wrongdoing may cause him irreversible ongoing damage prior to the trial. These applications are made to the Single-Member Court of First Instance and are usually made on notice, although an application without notice may be allowed in certain circumstances. The most popular remedies in Greece include freezing, prohibitory and mandatory injunctions, interim payments and provisional orders. If an injunction is granted prior to the instigation of proceedings, the court usually orders that an action be filed within the next month or else the injunction is automatically suspended.
A claimant may also apply for an interim attachment order to preserve assets pending judgement or a final order. Applications for such orders are made either to the Court of Peace or to the Single-Member Court of First Instance and are usually made on notice, although an application without notice may be allowed in certain circumstances. Provisional order may be granted on the same day where the circumstances are urgent. Litigation proceedings are not required to be in the same jurisdiction as the proceedings relating to the interim attachment order since an application for provisional measures can be made to the courts of a Member State, even if the courts of another Member State have jurisdiction as to the substance of the matter [10]Article 31 EC Regulation No. 44/2001.
Payment Orders
As an alternative to filing an action for litigation, the GCCP provides for the issuance of a payment order pursuant to articles 623 GCCP onwards. A payment order is essentially a judgement which is passed by either the Court of Peace (for disputes valued at €12.001 or more) or the Single-Member Court of First instance (for claims valued at 80.000€ or more). The Multi-Member Court is therefore, not competent to issue payment orders.
The procedure is as follows: The claimant files an application to the court for the issuance of a payment order, together with all the original documents that sustain it; these documents need to directly support the claims made by the claimant, without the need for the claimant to resort to further evidence i.e. witnesses. For instance, payment orders are usually issued for claims relating to checks, where the check itself directly proves that there is a claim against the issuer, if its issue date has passed and the bank has verified on the body of the check that is was not paid when it was filed for payment by its bearer. A payment order may also be issued in relation to the sale of goods. It is possible to issue a payment order provided the seller /claimant can file the original invoices, along with CMRs or bills of lading (confirming that the buyer has received the goods) that bear the signature of the buyer.
A payment order is preferable to filing an action, since the former is issued very quickly by the court (usually within two days to two weeks after filing). The payment order is considered an enforceable title, entitling the claimant to start enforcement measures against the debtor.
The debtor has the right to file a written objection against the payment order within 15 working days after it has been served to him by the court bailiff. The objection itself does not remove the claimant’s right to enforcement. If the debtor is convinced that his objection will be accepted by the court, then he must also file for interim measures. This is because if enforcement is carried out before his objection is tried, he will suffer damages, because he is pretty sure that his objection will be accepted by the court. If the application for interim measures is accepted by the court, then the claimant does not have the right to pursue enforcement until the objection is heard; if the objection is overruled, then he can pursue his claims according to the payment order.
Witnesses of Fact
In Greek civil proceedings, a witness of fact may give evidence orally or in written form. At trial, each party is required to have at lease one witness of fact giving oral evidence. The law provides that all witnesses giving oral evidence may be cross-examined. A witness of fact unwilling to attend trial may be served a summons by the party wishing to make the witness attend but, due to the fact that the penalties for not attending are so minor, such a summons frequently fails to achieve the desired outcome. Statements sworn before a justice of the peace, a notary public or a consul replace witness statements in Greece even though the former do not have the same significance as evidence provided by a live witness during cross-examination at trial. .Such statements are made shortly before pleadings and are filed with the court so they can be incorporated into the trial bundles. Three sworn statements can be submitted by each party provided a notice has been served on the other party at least two working days before the statements are to be made. In special cases (employment disputes and disputes concerning fees of certain professionals like engineers, lawyers and agents, the notice has to be served 24 hours before. Where the statement is to be made abroad, service of the notice must be effected at least eight days in advance. If the facts of the case are not proved by the evidence submitted to the court, the parties to an action or their representatives may be required to provide oral evidence.
Third Party Experts
The law states that the court may appoint an expert witness to give an opinion only where the court concludes that the issue requires expert knowledge and a party requests such an appointment [11]Article 368 CCP. The parties appoint their own experts [12]Articles 391 and 392 CCP and are liable to pay their fees. Experts are under a duty to provide independent advice or to represent the interests of the party appointing them; the judge decides freely on the merits of their evidence [13]Article 340 CCP. The parties have the right to reply to expert evidence via their pleadings and supplementary pleadings while the court may order experts to give oral evidence, and thus be cross-examined by the other party, at trial [14]Article 369 CCP.
If the court appoints an expert, the party that notified the appointment to the expert and invited him to swear an oath, pays the expert’s fees, regardless of whether this party requested the appointment of an expert or not [15]Article 173(3) CCP. Such fees are part of the costs of the action that a party may recover from the other party if it is successful [16]Article 189 CCP.
Appeals
Since appeals can be brought as of right and therefore, do not require prior permission, judgements are often appealed by the unsuccessful party. Only final judgements can be considered on appeal. Interim judgements can only be appealed with the final judgement. Appeals of judgements by the Courts of First Instance are heard by the Court of Appeal. Appeals against judgements of the Court of Peace are heard by the Multi-Member Court. The Court of Appeal is determined on the basis of the location of the lower court that made the judgement which is being appealed.
We will now look at the appeal procedure. First, an appellant files a notice of appeal which stipulates the grounds on which the court allegedly erred; grounds of appeal can relate to both questions of fact and law. The filing of a notice of appeal must be carried out within 30 days of the date that the lower court’s judgement was served on the appellant or within 90 days of this date if the appellant lives abroad or is of unknown residence. Where the judgement has not been served, the notice of appeal must be filed within three years of the date that the judgement being appealed was sealed. Once filed, a notice of appeal must be served on a respondent who resides in Greece at least 60 days before the scheduled hearing of appeal. If the respondent lives abroad or is of unknown residence, service must be effected at least 90 days before the scheduled hearing date.
Enforcement
Finally, final judgements and first instance judgements that have been issued as provisionally enforceable can be immediately enforced. A certified copy of the enforcement order which is supplied by the presiding judge of the court that issued the relevant judgement is required in order to initiate the enforcement procedure. Following service of this order, no other enforcement action can be taken until three working days have passed [17]Article 926 CCP.
Cross-Border Litigation
The 1980 Rome Convention stipulates that courts in Greece, amont other Member States, will recognize an express choice of law in a commercial contract unless there are public policy reasons for not doing so. In particular, parties to a cross-border dispute can choose a particular court or courts to settle any disputes. Pursuant to EC Regulation 2201/44/EC, the parties may confer jurisdiction on a court or courts of a Member State to settle any disputes as long as the agreement conferring jurisdiction is in writing or other acceptable form and it is not contrary to special provisions applying to insurance matters, consumer contracts and employment contracts or to the exclusive jurisdiction of the courts [18]Article 23 Brussels Regulation. This may be done by prior written agreement or by the defendant making an appearance without challenging the jurisdiction of the court. Where an agreement confers exclusive jurisdiction to a court other than the competent Greek court, this agreement must be express. Exclusive jurisdiction clauses may be deemed invalid by a Greek court if the choice of another jurisdiction is impossible and/or results in a denial of justice.
An agreement choosing jurisdiction must be in writing and must define in detail the legal relationships to which it refers where it relates to a future dispute. We must stress that the freedom to choose a jurisdiction is unavailable in cases involving non-pecuniary claims relating to immovable property.
We must note that service of the action document from Member States can be effected on the service in the Member States of judicial and extra-judicial documents in civil and commercial issues or via the public prosecutor. If either of these methods is applied, a translation of the action document in a language that the recipient can understand must be included.
EC Regulation 2001/44/EC provides for the recognition and enforcement in Greece, among other countries, of judgements and orders issued in a Member State. The competent court which assumes the responsibility of declaring enforceability is the Single-Member Court of First Instance of either the place of residence of the party against whom enforcement is sought or the place of enforcement. In the rest of cases, a foreign judgement can be declared enforceable by a judgement of the Single- Member Court of First Instance provided the foreign judgement is enforceable under the legislation of the state where it has been issued and is not contrary to moral values or public order in Greece. In addition the unsuccessful party must not have been deprived of its right to defence and the foreign judgement must not conflict with a domestic judgement and therefore, creating a precedent in relation to the same parties. Judgements issued under EC Regulation 2004/805/EC do not need to be recognized and are directly enforceable.
Arbitration & Mediation (ADR)
The most common forms of alternative dispute resolution used in Greece is arbitration which is regulated by articles 876 GCCP onwards. Provided an arbitration clause exists in writing or no objection is raised by the parties when appearing before the arbitrator, then all private disputes (except from employment disputes and applications for interim measures) may be resolved via arbitration. Unless otherwise provided, arbitral awards cannot be appealed [19]Article 895 CCP but can be annulled if certain requirements are met[20]Article 897 CCP. The role of the arbitrator is passive and the parties determine what documents are to be disclosed.
The parties agree the costs and expenses in international arbitration [21]Article 32 Statute 2735/1999 and where such an agreement is absent, the arbitral tribunal allocates costs and fees between the parties. The costs in domestic arbitration are calculated as a percentage of the value of the disputed item or claim. Finally, the arbitral award determines who is obliged to pay the arbitrators’ fees and the costs of arbitration.
ADR does not form part of court procedures and therefore, courts cannot compel its use. Despite the lack of a provision imposing confidentiality in ADR proceedings, parties often keep such proceedings private and also incorporate confidentiality clauses in their contracts.
Among the most significant providers of arbitration services in Greece are the Institute for Mediation and Arbitration, the National Office of the International Chamber of Commerce, the Departments of the Athens and Piraeus Chambers of Commerce and Industry and the Association for Maritime Arbitration of Piraeus. The Ombudsman and the Inspectorate of Employment are the most popular bodies offering mediation in Greece.
Since the foundation of the Greek Ombudsman in 1998, mediation is being used more frequently as an alternative to arbitration. The Ombudsman undertakes to monitor acts and omissions by government departments and public authorities. Employment disputes are handled by the Inspectorate of Employment.
Notes:
Partnering international businesses in Greece
In franchising the franchiser generally gives the franchisee an enterprise with a marked organizational structure of a high technological standard. The franchisee is a truly independent entrepreneur, who uses the franchise package for h ownis independently run commercial undertaking. A franchise is a successful business concept, which is passed on by the franchiser to the franchisee by means of a licensing agreement. The franchise package is first and foremost an organized sales concept for goods and services. It includes sales and distribution methods, commercial goods or brands, commercial names, trademarks, business designations in words and images, business forms, subsidiary systems, copyrights, technical knowledge and experience (called know-how), and patent rights.
Franchising concept
Franchising integrates franchisees into the franchiser’s distribution system. This consists of (long-term) technical and organizational support for the franchisee, which is achieved by staff training, equipping business operations and advice on organizational, technical, entrepreneurial and economic matters, with the aim of achieving a great decree of coordination with the franchise concept.
From an economic point of view, franchising concerns a sales and distribution system for products or services to consumers, and consequently a structured and organized advertising and distribution concept, with the intention of profit-orientated sale and distribution on the market of specific products and services through the association of two or more legally independent businesses. The goal is for a tight distribution network, with a specific trading name or commercial brand, in which the franchisee exploits the franchiser’s experience and is integrated into an existing customer network once his business is established.
The franchisee remains an independent trader and acts in its own name, for its own account and at its own risk. This is the authoritative distinction between a franchisee and a commercial representative. The franchisee must make its position clear to prevent the legal appearance of being the franchiser’s representative, otherwise the franchisee can be held liable.
The franchise agreement
The companies associated in this way are represented in the market as a single entity on the basis of what is known as a franchise agreement, a long-term contractual cooperation agreement, the object of which is the production and distribution of specific goods or services to consumers. The franchise agreement manifests the assumption of reciprocal obligations and is normally concluded for a consideration.
The franchise agreement is a contract geared to mutual economic advantage, with many structures from the marketing sector. Fulfilment of the contract depends upon the franchisee’s activities. The latter uses the distinctive features of the products and services and the franchiser’s know-how to distribute the contractually agreed products or services. The franchisee must follow the franchiser’s instructions with regard to distribution methods and the establishment and running of the business operation, to distribute certain types of product determined or approved by the franchiser and finally to actively participate in the franchiser’s advertising campaign.
Long-term commercial cooperation between two economically independent business units,
Franchisee’s integration into the franchiser’s distribution system,
Surrender of use and exploitation of the franchise package to the franchisee and consequently the provision of bundled services of intangibles in the form of industrial or intellectual property,
A constantly renewable know-how enriched by new, valuable experiences, with the main emphases being in the fields of marketing, merchandising, supply and distribution of products andservices, advertising, contacts, training, administrative organisation and management, establishment and funding of the business operation,
Long-term support and advice for the franchisee,
The business’s operation and management according to the franchise system, the commercial brand and the franchiser’s patent, and
Payment of a consideration by the franchisee
Franchising forms
The franchise agreement occurs in various forms, generally as a distribution or service franchise. The distribution franchise concerns the use and realization of the franchiser’s distribution system for the purpose of trading in contractually stipulated products in the franchisee’s business premises.
Subcategories of the distribution franchise are the manufacturer franchiser’s franchise, in which only the franchiser’s products may be sold, and the distributing franchiser’s franchise, in which the franchiser stipulates the products it chooses and commissions third parties to manufacture the products according to characteristics and specifications stipulated by it. In the latter case it is also customary for the franchiser to purchase the products on the basis of a separate agreement with the manufacturer.
In the case of the service franchise the franchisee utilzes the franchiser’s distribution system for the purpose of providing contractually stipulated services in its own business premises on the basis of the sales methods specified by the franchiser.
There is furthermore the manufacturer franchise, in which the franchisee manufactures or modifies products according to the franchiser’s specifications and then sells these with the franchiser’s commercial brand.
What is known as the “mixed franchise”, which combines the sale of products and services, is also familiar in Greek law.
Greek law furthermore distinguishes between
Financing or administration franchise – The franchiser finances the franchisee and transfers to the latter administration of an enterprise from the franchise network
Sub-franchise – The franchisee uses a third party’s business premises in which the network’s products are sold
Partnership franchise – The franchiser has a percentage holding as a shareholder in its franchisee’s enterprise
Combination franchise – Two or more franchisers work together in business premises from which each sells its own products or services
Modification franchise – The franchisee brings in a company whose business object was already the same or similar before integration into the franchiser’s distribution network
Multiple franchise – The franchiser grants the franchisee the right to open and run businesses in another location
Plural franchise – A franchisee concludes franchise agreements with several franchisers
Subordinated franchise – It is company policy for the franchisee to be subject to control and instructions from the franchiser
Equal franchise – Characterized by equal cooperation between the franchiser and franchisee.
Legal nature of the franchise agreement
As a long-term contractual relationship the franchise agreement is construed as a mixed agreement. The performance typical of the contract is the provision of services and relinquishment of intangibles, even if purchase or sale has been agreed for the purpose of onward selling.
The duration of the contractual relationship which governs cooperation between the parties to the contract under commercial law can be concluded for an unspecified or a specified term.
The franchise agreement is also to be understood as a master agreement, because assumption of specific reciprocal obligations to achieve an overriding economic purpose is stipulated in this agreement. The franchiser’s obligation to surrender use of the technical know-how and to support the franchisee is balanced by the franchisee’s duty to accept and implement the distribution system’s organizational structures and principles. The franchisee is furthermore obliged not to trade in or distribute any competitors’ products, and to take all requisite measures to comply with the reciprocal interests. The franchisee is moreover obliged to participate in the franchiser’s advertising campaign and finally obliged not to carry out any ancillary activities which breach the ban on competition in the same location.
Implementation of these obligations arising from the franchise agreement often necessitates the conclusion of further (execution) agreements, which can be adapted to the respective needs of the franchise. It is with this in mind, for specific forms of franchise, that in the case of sale of products which the franchiser has manufactured or selected, for example, the franchisee must conclude a separate, parallel contract of sale for purchase of the corresponding products with the franchiser before selling them through the network. The contracts of sale with the franchiser in this regard represent such separate agreements based on the franchise master agreement.
Form of contract
The franchise agreement need not be in writing, it can also be concluded verbally.
Contract content In addition to the contracting parties’ reciprocal obligations, the franchise agreement also clearly defines the products and services to be distributed. Other contract content includes the individual sales and distribution methods, the location’s boundaries, the guideline prices, the term of the contractual relationship, possible extension options, grounds for termination and periods of notice, as well as post-contractual obligations.
Obligations of the franchiser and franchisee
a) The franchise agreement is characterised by a special relationship of trust, which creates obligations of reciprocal loyalty as early as the pre-contractual stage. There is already a duty of information on the part of the franchiser with regard to the franchise (depreciation concept) even before conclusion of contract.
b) The franchiser’s obligations are basically as follows:
c) Franchisee’s obligations:
The franchisee is furthermore obliged to observe other franchisees’ protected territory and not to offer and distribute the products allocated to it in these locations (Art. 4 of regulation 2790/1999). Furthermore it may not solicit any customers outside its own location (Art. 4 of regulation 2790) and must exclusively procure contractually specified products decided by the franchiser. Products manufactured by third parties can, however, be distributed with the franchiser’s consent.
According to Greek case law, a the franchiser reserves the right to keep the franchisee’s accounts in order to review the financial data conveyed to it by the franchisee, is not binding, because such a clause resorts to a third contractual party and thus disproportionately obligates the franchisee in an illegal way. The franchisee’s obligation to keep a list of customers has also been regarded as a restriction of free trade. In the event, however, of the franchiser being due a contractually agreed share of the profits, the franchisee can be obliged to send the franchiser copies of all the accounts information pertaining to the monthly income.
The franchiser furthermore has the option of obliging the franchisee to take legal action against a third party in the event of a violation by a third party of the rights arising from the franchise agreement relinquished to the franchisee, or even to intervene in legal action against third parties pursued by the franchiser (Art. 3, §2c of Regulation 4087/1988 in conjunction with §44e of the Commission’s guidelines).
In the event of breach of the obligations through non-performance or defective performance, the general right of defective performance shall apply. In Greek law the provision of Art. 382 et seq. of the Greek Civil Code apply.
In the individual case a contractual clause can consequently also be qualified as a breach of the competition provisions, with the consequence that the clause can be regarded as prohibited and thus void pursuant to Art. 1 of law 703/1977.
Such a case is present in particular if the franchise agreement contains provisions that do not further the object of the agreement and thus restrict competition.
Term
According to Greek case law a term of 5 years has been regarded as appropriate, compared to which a term of 25 years would disproportionately obligate the franchisee, so that a violation of Art. 1 of law 703/77 would be present.
Extension of the long-term contractual relationship’s term is basically possible. This requires a corresponding agreement by the parties to the contract, which can also be tacitly concluded. A franchise agreement concluded for a limited term can, therefore, if continued after the agreed period has expired, be qualified as a tacit extension for an unspecified term.
Protection of the franchise system and liability
The franchise system is protected against third parties by the provisions of Law 2121/1993, regarding the content of the franchise manual handed over to the franchisee, and by the provisions on unfair competition. Liability in respect of the customer only ensues for the franchisee from the contract. Tortious liability arising from §823 is also possible for the franchiser. In individual cases the provisions on product liability contained in law 2251/1994 can also apply.
Time barring of claims
The franchiser’s claim against the franchisee for payment of the consideration is subject to a period of limitation of 20 years pursuant to Art. 249 of the Greek Civil Code.
Termination
The contract is terminated by expiry of the term or termination. Termination as a result of expiry of the term occurs for franchise agreements for a limited term.
Termination can be exercised in the case of both franchise agreements concluded for an unspecified and a specified term. Ordinary termination can be agreed to take the form of termination with or without notice, even in the case of franchise agreements concluded for an unlimited term. In both cases extraordinary termination for good cause is permitted. Good cause is in particular present if a breach of contract occurs.
Volonakis Law Firm , greek lawyers
Partnering international businesses in Greece
Law no. 2239/1994 is the primary legislation which governs national trademark law in Greece. The exclusive use of a national trademark requires following this law.
A trademark may consist of words, names, illustrations, designs, letters, numbers, sounds, the shape of a product and its packaging. Articles 3 and 4 of law no.2239/1994 provide for the cases where a trademark cannot be accepted for registration. A common case that arises in practice is the prohibition on registering signs, which may be used in trade to indicate the type, quality, attributes, quantity, destination, value, place of origin or for the manufacturing time of the product, the provision of services or other characteristics of the product or services.
In order to register a trademark in Greece, the applicant must file a application in the Register of Trademarks which belongs to the Ministry of Development. The application is submitted with 4 copies and must contain the following: the form concerning the registration of the mark, a printed copy of the latter, the full details of the business concerned, a list of the products or services which it will identify and the appointment of an attorney at law with special powers.
Registering a Trademark in Greece
For a trademark to be registered, there must be a meeting of the Administrative Trademark Committee. The committee is also responsible for any trademarks disputes; in some sense, it acts as a first instance court. A mark which is recognized is granted protection for a decade; the date of protection begins the day following its recognition. A follow up application by the proprietor can renew this protection for another decade.
If someone claims that he has prior rights to a trademark, or that a certain trademark cannot be registered and if, in general, he has a legitimate interest, he may file a third party objection against the decision to accept the partial or total registration of the trademark. If another person who has a legitimate interest in the mark becomes aware that the registration process for this trademark has started they may request the refusal or acceptance of the application.
A major limitation of the protection afforded to a trademark is provided by Art.20 (1) of law no. 2239/1994, which restricts the rights conferred by a trademark even though it has been registered. The provision says the right conferred by the trademark does not prevent third parties from using in trade the name, address, as well as indications relating to the nature, quality, destination, value, place of origin, time of manufacturing or other characteristics, as well as the mark itself where this is necessary in order to indicate the destination of the product or service, particularly in case of a replacement part or accessory; such use must be made in accordance with morality.
An example of the above limitation is where a trademark contains a word which refers to a type of product. Thus, if a third party uses such an indication in the course of business, the proprietor of the trademark is not entitled to forbid this party from such use, as long as the third party is using this indication to describe the type of the product in question and not by way of trademark.
The proprietor of the trademark may file an action before the Court of First Instance, seeking prohibition of using, distorting and duplicating the trademark or compensation for damages. The proprietor may also apply for an injunction, in which case he would also have to prove that there are extremely urgent circumstances, which impose immediate effect of measures to secure his claims.
Volonakis Law Firm , lawyers
Partnering English and German Speaking businesses in Greece
Distribution of goods via commercial agents and authorized dealers
Manufacturers (employer or principal) can market a product in the European internal market by various methods. In addition to direct sales to the end customer, many manufacturers market via third persons or companies in the country in question. One advantage of third party marketing is that these local contractual partners are more familiar with the local conditions and know of a more effective local marketing strategy and can even sell the goods more cost-effectively and efficiently. This form of collaboration is often chosen by foreign firms and individual details thereof modified. This type of representation, which commonly occurs, is known as commercial agent and authorized dealer.
The law of commercial agents is codified in large parts of Europe so that the rights of commercial agents are protected by many irrevocable provisions. There are no provisions to regulate protection of authorized dealers, however, which raises the question of the extent to which the regulations protecting commercial agents also apply to (exclusive) authorized dealers Thereforewe will describe in greater detail the individual forms of collaboration and the ensuing legal consequences.
1. Commercial agent
The commercial agent is an independent business person who is employed to broker business for another company or to conclude transactions in the company’s name (e.g. sale of products and goods to customers in the name of a company). He works in the name and for the account of third parties and receives commission payments from the employer for his work. Unlike the dealer, the commercial agent doesn’t buy in the products, but acts as a broker between the company and the customer.
If such a business relationship exists between the employer and the distribution partner (in Germany or Greece), there is a simultaneous contractual commercial agent relationship. Irrespective of whether a written contract, or just a verbal contract, is at hand, the commercial agent always has the same rights in respect of the employer. Proving the agreements that have been reached is made more difficult for both parties without a contract concluded in writing. Where there is doubt, in such cases the courts tend to decide in favor of the commercial agent, so specifying in writing the agreements reached is always recommended.
1.1.1 Applicable law
In order to determine applicable law, a distinction must be made between the commercial agent’s relationship with the principal on one hand and the contract of sale brokered between the principal and the customer on the other. If the commercial agent is used for distribution abroad (e.g. Greece) then the latter represents an international contract of sale so, subject to the states concerned having signed the Convention, the Convention on the International Sale of Goods – CISG applies.
The CISG contains provisions on sales that apply if the parties to a contract of sale originate from various convention states. National law thus applies because the CISG does not apply to service contracts like the agency agreement and in addition there is no international convention on substantive law of commercial agents.
The provisions on the agency agreement have been harmonised by European Union Directive 86/653 of 18 December 1986 and in the meantime implemented in national law in all Member states. In Greece the Directive has been taken into account by Presidential Decree 219-1991, which contains detailed provisions on the parties’ rights and obligations and in particular on protection of the commercial agent.
The provision of the law to be applied to contractual obligations is governed by the Convention (ECC) signed by the Member states (including Greece) in Rome in 1980. In Germany this Convention has been implemented by Article 27 et seq Introductory Act to the German Civil Code (EGBGB). The Convention applies to contractual obligations in situations that exhibit a connection to the law of various states, even if the law of a state that is not a signatory to the contract is concerned. The parties accordingly have the possibility of determining the national law to be applied with the choice-of-law clause. Both German and Greek law are based on implementation of EU Directive 86/653, which has been implemented in national law in both countries, amongst others. This is why the differences according to parts of Greek case law are not serious – except the additional entitlement to compensation.
According to Article 4 of the ECC, if there is no choice-of-law clause in the contract, the contract is subject to the law of the state with which it has the closest connection, or in which the performance characteristic of the contract type will be rendered. In the case of a commercial agent, this would be the place where he exercises his business activity.
1.1.2 Jurisdiction
Irrespective of the question of the law to be applied to the contractual obligation, the question arises as to the courts before which the parties to the contract would wish to, or have to contest their cases in the event of a dispute. This can be contractually agreed by means of what is known as a venue or jurisdictional clause. This clause stipulates which courts have jurisdiction in the event of disputes. Unless the parties have agreed otherwise these courts have sole jurisdiction.
If an exclusive venue has not been agreed, the place of performance can furthermore be determined in a contractual clause. This also determines the courts that have jurisdiction in the event of a dispute, which is regulated pursuant to Article 5, para. 1, Article 23 of European Council Regulation no. EC 44/2001 of 22 December on jurisdiction of the courts and recognition and enforcement of decisions in civil and commercial matters for international transactions.
1.1.3 Termination of contract
The subject matter of the agency agreement is essentially the provision of a service, whose purpose roughly consists of facilitating the sale of goods. The agreement can be concluded for a specified or unspecified term and terminated by either party giving notice of cancellation to the other party, on compliance with specific deadlines for giving notice. The length of the notice period is dependent upon the term of the agency agreement. According to Greek and German law, either party may terminate the contractual relationship on compliance with the following notice periods:
1.1.4 Equitable compensation or indemnity on termination of contract
According to Greek law (PD 219/1991, Article 9) the commercial agent is due equitable indemnity or compensation intended to compensate the advantage that the commercial agent has brought the principal. This is the most important entitlement under the law of commercial agency.
The commercial agent should be compensated for acquiring new customers for the business, with which the company will continue to do business after the agency agreement has ended. The parties cannot contract out of this entitlement to equitable compensation. The indemnity is only granted if the commercial agent has acquired new customers or considerable increased business with existing customers for the principal and the principal derives an advantage from this upon or after termination of the agreement. The indemnity must moreover be commensurate, taking into account the overall circumstances.
A future forecast is drawn up based on the last sales figures, to establish the sales potential that exists where the new customers acquired by the commercial agent are concerned. The indemnity sum can amount to a maximum of one year’s commission, calculated from the average for the last five years.
The entitlement lapses, however, if the commercial agent terminates the agreement, apart from if he is caused to do so by health or other reasons, or if the agent is dismissed for good cause. The entitlement furthermore lapses as soon as the commercial agent agrees with the principal to assign his contractual position to a third party.
1.1.5 Further claims
In addition to equitable indemnity, the Greek courts tend to also grant compensation according to the general principles of civil law. This is because the above mentioned EU Directive and Article 9 §1c presidential decree 219/1991 based on it do not preclude further compensation (arising from tort and according to general principles of civil law). If further damage beyond the loss of commission and customers is incurred as a result of termination of the agency agreement, the commercial agent can assert further claims for compensation arising from general principles of the Greek Civil Code.
This may be the case if, for example, defamation has occurred, or if the company caused the commercial agent to invest considerable sums just before the cooperation was terminated, whilst the commercial agent should justifiably have been able to expect a long-term collaboration on the basis of the company’s previous conduct.
This also covers some cases of violation of the law on unfair competition, if the termination is intended to crowd the commercial agent out of the market, or even a violation of antitrust law if the employer is exploiting a particularly dominant position in the market.
1.2. authorized dealers
Another common form of commodity trading is distribution via authorized dealers. Unlike the commercial agent, the authorized dealer buys the products from the principal and then sells them on to the customers in his own name and for his own account. In certain sectors it is equally possible that the dealer will use the business’s existing distribution network. The advantage for the principal on the one hand is that he receives the purchase price for the product even before it has been sold to the customer. On the other there is no direct legal relationship between the customer and the principal, so that the authorized dealer bears the risk of the end customer’s insolvency and all transactions under sales law. In the majority of cases the authorized dealer is contractually obliged to purchase minimum quantities from the principal and import these into the foreign markets. As a rule he will have to make investments in order to do this.
1.2.1. Analogous application of the provisions for commercial agents
In this case too the applicability of national law is governed by the provisions of Regulation 593/2008 and / or the Civil Code. Unlike the law of commercial agents, however, the authorized dealer relationship is not regulated by either EU-wide or national statutory provisions. As a result, at least in relationships similar to that of a commercial agent, case law tends to selective analogous application of the provisions of the law of commercial agents due to comparability of interests.
According to court practice in both Greece and Germany, analogous application of the provisions on commercial agents to authorized dealers firstly presumes that the contractual relationship is like to that of a commercial agent. This requires the authorized dealer to be economically integrated into the principal’s sales organisation like a commercial agent (e.g. allocation to a specific sales territory, minimum purchase commitment, prohibition of competition). Furthermore, the authorized dealer must be contractually bound to surrender to the principal the contacts and customer addresses acquired during the term of the contract and thus grant the principal access to the regular group of customers or customer base.
A minimum recommendation is a contractual agreement that requires customer data to be deleted after contract is terminated, as the current trend in both Greece and Germany is towards granting authorized dealers equitable indemnity, even in the event of an agreed obligation to surrender the customer base that is not effective.
1.2.2. Termination of contract and legal consequences
If the previously mentioned prerequisites for analogous application are met, the authorized dealership agreement can be terminated on compliance with the periods of notice applying to commercial agents.
The authorized dealer can also claim equitable indemnity according to the same principles as the commercial agent when the agreement has been terminated. There are some peculiarities that must be taken into account when calculating the equitable indemnity, according to which in most cases the authorized dealer does not receive any commission payments. His profit generally results from the margin between the purchase and retail price, if he buys at list prices, or from potential bonus payments respectively. In this case too there is an upper limit on the indemnity, according to the commercial agent’s average annual commission, e.g. based on the annual net profit.
According to Greek law the company can furthermore be obliged to pay compensation if the dealer’s dismissal did not comply with appropriate periods of notice. The statements above regarding the commercial agent apply in this case too. The company (principal) must furthermore make payments to the dealer during the period of notice to the value of the gross margin for the last year. Gross margin is understood to be the difference between the purchase and retail price, calculated on the basis of the figures from the last year of collaboration. In certain cases the dealer can furthermore claim compensation for his non-material damage (apozimiosi ithikis vlavis).
1.3. Exclusivity – sole distribution right
Unlike the usual retailers, who merely purchase goods from the principal and sell them on to the customer, authorized dealers and commercial agents are obliged to promote sales of the product in question in a specific territory and simultaneously preserve the principal’s interests. In return they usually claim sole rights of distribution, or exclusivity, or territorial protection.
It should be noted here that the blanket term “sole distribution” can have different meanings and must therefore be specified in order to avoid any claims for damages. Depending on the agreement, sole distribution can merely mean exclusion of the employer’s direct business or the representative’s sole right of operation excluding other commercial agents (or authorized dealers), or even both.
The legal consequences also differ accordingly. In the case of sole representation, the entrepreneur’s direct sales violate its contractual obligations with all the consequences, such as compensation or termination without notice by the commercial agent. Whereas allocation of a specific territory or group of customers merely increases the group of transactions subject to commission and, if infringed, does not give rise to any further claims for damages unless it is combined with the right of exclusivity. It is therefore advisable to define the scope of any exclusivity to be granted, as the need arises, in the respective contract.
Volonakis Law Firm , lawyers
Partnering international businesses in Greece
INCOTERMS© in international trade
When merchants conclude a contract for purchase and sale of goods, they may freely negotiate the special terms with regard to price, quantity, properties, etc., as well as carriage, risks and surrender of the goods. Businesses involved in exports, however, are frequently faced with different interpretations of identical formula and national commercial practices. To counteract these difficulties, the parties to the contract can use what are known as Incoterms©, which offer a range of international rules for interpreting the main forms of contract used. Specifically, the Incoterm agreed by the parties determines which party is liable for the respective costs in the transport chain, for loading and unloading the goods and Customs clearance and at what point a party bears the risk of loss for an international shipment. Incoterms© also affect the basis on which the imported goods are valued for Customs.
CFR – CIF – CIP – CPT – DAF – DEQ – DES – DDP – DDU – EXW – FAS – FCA – FOB
Incoterms© (International Commercial Terms) are devised by the International Chamber of Commerce in Paris and observed by the most important trading nations. All 13 Incoterms© currently used are listed and explained below according to the Vendor’s increasing responsibility. Use of these Incoterms© is voluntary and must be contractually agreed. The Incoterms© most frequently used in practice are “ex works”, “free on board”, “costs, insurance, freight” and “delivered duty paid”.
N.B.: This entry is also available as a downloadable PDF entitled Importance and effect of INCOTERMS© in international trade (German).
Group E Incoterms© (Departure)
Ex works (EXW)
By using the “ex works” (EXW) term, the seller minimizes his risk, since the goods are made available at his factory or place of business. The seller (exporter) makes the goods available to the buyer (importer) at the seller’s business premises. As soon as the goods are acquired and leave the business premises, the buyer bears the risk of loss and is also responsible for all carriage costs, Customs duties and insurance costs. The “ex works” price does not include the cost of loading the goods onto a vehicle or ship, or Customs clearance. If the Customs valuation basis for the goods in the destination country is “free on board” (FOB), the cost of transporting and insuring the goods shipment from the seller’s business premises to the port of export must be added to the ex works price.
Group F Incoterms© (Main carriage unpaid by seller)
Free alongside ship (FAS)
The seller transports the goods from his place of business, clears the goods for export and places them alongside the ship at the named port, where title and risk of loss transfer to the buyer. Unless otherwise agreed, the buyer is responsible both for loading the goods onto the ship and for paying all costs incurred for shipping the goods to the destination port.
Free carrier (FCA)
The seller (exporter) clears the goods for export and hands them over to the carrier at the place designated by the buyer. If the place chosen by the buyer is the seller’s place of business, the seller must load the goods onto the transport vehicle, otherwise the buyer himself is responsible for loading the goods. From this juncture the buyer assumes both title and the risk of loss and bears all the costs for shipping and transporting the goods to the named destination.
Free on board (FOB)
The seller (exporter) is responsible for transporting the goods from his place of business to the named port, loading onto the ship and clearing the goods for Customs in the exporting country. As soon as the goods are on the ship, title and risk of loss pass to the buyer (importer). From this point the buyer is responsible for all carriage and insurance costs and must also clear the goods through Customs in the importing country. If the Customs valuation basis is based on “costs, insurance, freight” (CIF), international freight and insurance costs are to be added to the “free on board” (FOB) price. The “free on board” (FOB) Incoterm takes the form “FOB, named loading port”.
Group C Incoterms© (Main carriage paid by seller)
Cost and freight (CFR)
The seller (exporter) is responsible for transporting the goods from his place of business to the named port, loading onto the ship, clearing the goods for Customs in the exporting country and paying international freight costs. The buyer assumes the title and risk of loss as soon as the goods are on the ship. From this juncture the buyer must provide insurance cover and bear the costs of unloading, Customs clearance in the importing country and carriage of the goods to the named destination. If the Customs valuation basis is “free on board” (FOB), the international freight costs must be deducted from the “cost and freight” (CFR) price.
Cost, insurance, freight (CFR)
The “cost, insurance, freight” (CIF) Incoterm can only be used if at least part of international carriage of the goods is by water. The seller (exporter) is responsible for transporting the goods from his place of business to the named port, loading onto the ship, clearing the goods for Customs in the exporting country and paying international freight costs and must also bear the corresponding carriage insurance in favour of the buyer (importer). Title transfers when the goods are on the ship. If the goods, which henceforth belong to the buyer, are damaged or stolen during international transportation, the buyer must assert his insurance claim on the basis of the insurance taken out in his favour by the seller. The buyer must bear the cost of Customs clearance, carriage and insuring the goods in the importing country. If the Customs valuation basis is “free on board” (FOB), the international insurance and freight costs must be deducted from the “cost, insurance and freight” (CIF) price. The “cost, insurance, freight” Incoterm takes the form “CIF, named destination port”. If, for example, the goods are exported from Piraeus, the wording is “CIF, Piraeus”.
Carriage paid to (CPT)
The seller (exporter) clears the goods for export, hands them over to the carrier and is responsible for the cost of carriage to the named destination. The transfer of title takes place on hand-over to the carrier. From this point on the buyer must insure the goods. If the Customs valuation basis is “free on board” (FOB), the international freight costs must be deducted from the “carriage paid to” (CPT) price.
Carriage and insurance paid (CIP)
The seller transports the goods to the named port of export, clears them through Customs and hands them over to the carrier, and then the title transfers to the buyer. The seller is responsible for carriage and insurance costs until the goods reach the agreed named destination. As of when the goods arrive there, the buyer is then responsible for all costs and also bears the risk of loss. If the Customs valuation basis is “free on board” (FOB), the international freight and insurance costs must be deducted from the “carriage and insurance paid” (CIP) price.
Group D Incoterms© (Arrival)
Delivered at frontier (DAF)
The seller (exporter) is responsible for all costs incurred until hand-over at the named frontier location. Transfer of title takes place at the border. The buyer must bear the risks and costs of unloading the goods, clearing them through Customs and carriage to the final destination. If the Customs valuation basis is “free on board” (FOB), the international insurance and freight costs must be deducted from the “delivered at frontier” (DAF) price.
Delivered ex ship (DES)
The seller (exporter) is responsible for all costs incurred until hand-over of the goods at the named destination port. After arrival the goods are available to the buyer (importer) on board the ship. This means that the buyer is responsible for all the costs and risks incurred as a result of unloading the goods at the destination port. The buyer (importer) must unload the goods, clear them through Customs, pays Customs duty and take care of domestic transportation and insurance until they reach the final named destination.
Delivered ex quay (DEQ)
The seller (exporter) is responsible for all costs incurred during carriage of the goods to the quay of the named destination port. The buyer must pay Customs duty, clear the goods through Customs and from this juncture pay all costs and assume the risk of loss. If the Customs valuation basis is free on board (FOB), the international insurance and freight costs, plus the unloading costs, must be deducted from the “delivered ex quay” (DEQ) price.
Delivered duty unpaid (DDU)
The seller (exporter) is responsible for all costs incurred until hand-over of the goods at the named destination. The goods are made available to the buyer at this destination. At this point the title and risk of loss pass to the buyer (importer). The buyer must then clear the goods through Customs, pay Customs duty and provide domestic transport and insurance cover to the final named destination.
Delivered duty paid (DDP)
The seller (exporter) is responsible for all costs incurred until hand-over of the goods at the agreed destination. According to the “delivered duty paid” (DDP) Incoterm, the seller literally takes care of carriage from door to door, including Customs clearance at the port of export and destination port. Transfer of title occurs at the point at which the goods are handed over to the buyer, usually on his business premises. The seller consequently bears all the risk of loss until hand-over of the goods to the buyer at the buyer’s business premises. If the Customs valuation basis is “cost, insurance, freight” (CIF) the costs for unloading, Customs clearance, domestic transport and insurance for the goods to the buyer’s business premises in the destination country must be deducted from the “delivered duty paid” (DDP) price. The “delivered duty paid” Incoterm (DDP) takes the form “DDP, named destination place”. If, for example, goods imported via Patras are to be delivered to Athens, the wording is “DDP, Athens”.
Volonakis law Firm, lawyers
Partnering international businesses in Greece
Taxes on the Greek Real Estate Market. Legal information.
The Greek real estate market is burdened by various taxes, which are required by various laws; these taxes must be paid prior to the completion of transfer of the real estate. It is important to note that transferal taxes apply only in the case of drawing up the final contract for sale. In any other case, such as the drawing up of the pre-agreement, even if it is drawn up by a notary public, such taxes are not required to be paid.
The various transferal taxes are calculated by considering the price settled upon by the contracting parties. Due to past incidents of persons declaring lower prices than the ones actually contractually agreed in an attempt to pay lower taxes, Greek legislators established a system for the objective calculation of the value of real estates. Based on this system, if the contracting parties declare a price lower than the actual price, they will be charged taxes based on the actual price.
This objective calculation system is based on certain minimal values of the real estates which are initially assigned by areas (‘price zones’). Eventually these price zones are influenced by other factors which shape the final objective value of the real estate. These factors are the size of the real estate, the floor on which it is located (if it is an apartment), the length of the facade (if it is a store), whether an elevator and/or heat installations exist in the building etc.
In practice however, and for many years, the objective value of real estates was, in many cases, lower than the market value of the real estates; in certain areas the objective value was found to be twice or three times less than the market value. Due to successive increases in objective values, the divergences in some areas are not so wide. A new increase in objective values is expected by the end of 2015 which will effectively narrow the gap between the objective value and the market value. The basic taxes that are imposed on a real estate sale are the Real Estate Transfer Tax and Value Added Tax (V.A.T.).
We should note that the Real Estate Transfer Tax is regulated by law no. 1587/1950 in connection with law 4226/2013 while V.A.T. was established mainly by law no. 3427/2005. Furthermore, law 4172/2013 introduced a capital gains tax payable by the seller.
Real Estate Transfer Tax
Real Estate Transfer Tax is imposed on any transfer of real estate against a price in money or in land this tax is levied on the price stated in the contract. However, if this price is below the objective value of the estate, the tax is calculated on the objective value of the estate. This tax is charged by law on the purchaser of the property, who has to pay, in full, the competent Tax Office which regulates the real estate prior to concluding the transfer deed.
As per the new tax provisions, the tax factor amounts to 3%.
Value Added Tax (V.A.T)
Law no. 3427/2005 modified the V.A.T. Code (law no. 2859/2000) and brought about the imposition of V.A.T. for new buildings. According to the new tax provisions, V.A.T. at 23% is levied where a newly-erected real estate is acquired against a price and in money, for which building permission was issued after 1.1.2006. V.A.T. is to be paid by the purchaser- contractor and prior to signing the contract for sale in which case, Real Estate Transfer Tax does not apply.
Capital gains tax
Law 4172/2013 introduced the capital gains tax for the first time in Greek legislation and is imposed on property sale transactions as of 1.1.2014. Such tax is payable by the seller and is calculated at 15% on the difference between acquisition and sale price. There is a scale reducing the taxable capital gains based on the years that the seller kept the property before selling it, while an exemption is provided for capital gains up to 25.000 € as well as in case where the seller had acquired the property before 1.1.1994.
Volonakis Law Firm, lawyers
Partnering international businesses in Greece
Taxes on the Possession and Use of Real Estate in Greece
In Greece, up until 2007, the Large Property Tax applied only to owners of property whose total actual value exceeded certain limits. A tax for the preservation of ownership of a real estate did not exist.
During 2008 and 2009, Greek law provided for the replacement of the Large Property Tax with the Yearly Real Estate Tax, which applied to all real estate property, with the exception of the largest real estate of an owner valued up to 300.000 €. A significant difference between the two taxes is that the Yearly Real Estate Tax was imposed on the real estate property of all owners with the exception of the main residence.
In 2010, the Yearly Real Estate Tax was abolished and the Large Property Tax was re-introduced. The latter applied for the first time for the financial year of 2010 and related to property whose value exceeds 400.000 €.
In 2013, in an attempt by the Greek government to set the basis for a harmonized and long-term taxation of real estate, a new law was passed which introduced the “Uniform tax on real estate”, in Greek called “ENFIA”. From 1.1.2014 onwards, ENFIA will be the uniform tax on any rights held on real estate in Greece. Main difference between the ENFIA and previous taxes on real estate is that it is applicable on a property-per-property basis, i.e. irrespective of the total value of the property a person holds in Greece. The ENFIA is levied both on buildings and on any parcels of land. In the following section we will provide a short presentation of the way the ENFIA is calculated as regards buildings.
The ENFIA
For the purposes of estimating the ENFIA, the following are deemed to amount to real estate property: the right to absolute ownership or ownership deprived of the right to use, the right to enjoyment or residence, the contractual right to exclusive use of parking spaces, secondary spaces and swimming pools which are found on jointly-owned parts of a basement, an outdoor lower ground space (‘piloti’ in Greek) parking area, an attic or any uncovered space of the building, etc.
Every person, regardless of their origin and place of residence, is levied tax on their real estate property which is situated in Greece. Taxes are levied on the 1st of January of the tax year, regardless of the changes which may arise during that year.
Persons liable to pay the ENFIA are particularly:
Those who have acquired a real estate through purchase or by any other means, regardless of the registration of title in the Land Registry Office
Preliminary purchasers of a real estate, whereby, the purchaser is entitled according to a preliminary contract, by power of attorney, to conclude the final purchase agreement even without the participation of the seller. If a real estate is acquired by final judgment, its possessor is not entitled to a refund of the tax he has paid.
In calculating the tax, the value of the real estate or the value of the rights on the real estate are considered on the 1st January of the tax year. When the beneficiary of the right to enjoyment is a natural person, the value of the right to enjoyment is determined at the rate of the value of the right of absolute ownership depending on the age of the beneficiary as such:
When the beneficiary is a legal person, the value of the right to enjoyment is set at 8/10 of the value of the right to absolute ownership. The law provides that the value of ownership deprived of the right to use is the value which results when the value of the right to enjoyment is removed from the value of the right to absolute ownership. The right to reside is equivalent to the right to enjoyment and therefore, the absolute owner is taxed as an owner without right to use the property.
The ENFIA is calculated by multiplying a “basic tax” which depends on the tax value (i.e. the value as calculated by the tax office) of the area that the property is situated. Such basic tax is then multiplied by several other factors; such basic factors are i) the age of the property, b) the floor it is in, c) how many facades the property has, d) if the property contains any supplementary spaces e.g. storage rooms, etc.
The basic tax is calculated as follows:
Tax value (€/square meter) Tax factor
(€/square meter)
0 – 500 2,00
501 – 750 2,80
751 – 1.000 2,90
1.001 – 1.500 3,70
1.501 – 2.000 4,50
2.001 – 2.500 6,00
2.501 – 3.000 7,60
3.001 – 3.500 9,20
3.501 – 4.000 9,50
4.001 – 4.500 11,10
4.501 – 5.000 11,30
5.001+ 13,00
The age of the building is calculated as follows:
Age Building age factor
Over 26 years 1,00
20 έως και 25 years 1,05
15 έως και 19 years 1,10
10 έως και 14 years 1,15
5 έως και 9 years 1,20
Μέχρι και 4 years 1,25
The floor factor equals to 0,98 for properties in the basement, 1,00 for properties on the ground and 1st floor, 1,01 on the 2nd and 3rd floor, 1,02 on the 4th and 5th floor and 1,03 on the 6th floor and above.
Supplementary spaces in properties is not allowed to be used for the same purpose as the main spaces of a property, e.g. storage rooms can only be used for storage and not used as residential space. Therefore, the law calculates a factor of 0,1 on such spaces, so that tax burden is low.
For persons owning real estate of a tax value higher than € 300,000.00, there is a supplementary tax which is calculated as follows:
Grading Scale Tax Factor per Scale Tax Amount per Scale Total Value of Property Tax Total
0.01 – 300,000 € 0 0 300,000 € 0
300,000.01 – 400,000.00 € 0,1 % 100 € 400,000 € 100 €
400,000.01 – 500,000.00 € 0,2 % 200 € 500,000 € 300 €
500,000.01 – 600,000.00 € 0,3 % 300 € 600,000 € 600 €
600,000.01 – 700,000.00 € 0,6 % 600 € 700,000 € 1.200 €
700,000.01 – 800,000.00 € 0,7 % 700 € 800,000 € 1.900 €
800,000.01 – 900,000.00 € 0,8 % 800 € 900,000 € 2.700 €
900,000.01 – 1,000,000.00 € 0,9 % 900 € 1,000,000 € 3.600 €
excess 1,0 %
The value of real estate property of legal persons is taxed with a factor of 0,5%. For legal persons of a non-profitable nature, a factor of 0,25% is applied.
Income Tax
According to the Greek income tax code (law 4172/2013), income generated from real estate property is that which is produced in every financial or agricultural year, either from the leasing or requisition or the indirect private residence or private use or the grant of use to a third party without payment of one or more buildings or from leasing the area. This income is acquired by every person who has been legally assigned by a final contract or has been granted by court order or due to occupation, the right of absolute ownership, the right of enjoyment or the right of residence. Furthermore, this income is also obtained by a person who has been legally assigned the right to enjoyment by contract depending on the case.
Additionally, the right which is obtained by the owner of the land in respect of buildings which have been erected on land owned by a third party is also considered as real estate income.
In practice, the most common case of taxable income generated from real estate property is income acquired from leasing. This income is taxed according to the following grading scale:
Income Tax factor
0.01 € – 12,000.00 11%
12,000.01 € and above 33%
Commercial and professional leasing in Greece falls under proportionate tax of up to 3.6% on the agreed lease, while all the registered leases must be declared to the tax office along with the submission of a copy of the lease agreement within 30 days from its conclusion.
Real Estate Tax – Sanitation and Lighting Tax
Real Estate Tax and Sanitation and Lighting Tax are collected in Greece along with the bills paid to the Public Electricity Providers (electricity bill) and they relate to receipts in favor of the Greek State as opposed to the previous taxes which relate to individual municipalities tax. The amount payable is mainly determined by the size of the real estate in question. The law prohibits public notaries from allowing the completion of a contract for sale, if confirmation of payment from the municipality which regulates the real estate in question, is not obtained. It must be confirmed that Real Estate Tax proportionate to the area of the real estate has been paid.
Real estate property in Greece is divided into two main categories: real estates outside city building plans and real estates within city building plans.
Real estates outside city building plans are mainly divided into two further categories: agricultural land and land allotted by lot. Land allotted by lot refers to real estates granted by the Greek State as agricultural lots for the resettlement of farmers who did not own land. This system was introduced in order to cater for the incoming arrival of refugees into Greece from 1922 onwards, which, in turn, gave rise to the need to make use of such plots of land with the goal of developing the agricultural economy. Land allotted by lot is frequently larger in size and one of its most significant characteristics is the legal prohibition on dividing the land into smaller parts.
Agricultural land refers to real estates outside city building plans which are inherently used for agricultural exploitation and for the production of natural produce.
On the other hand, real estates within city building plans are commonly known as building sites. A building site consists of any ground which is within an approved street plan or within the boundaries of a settlement, even if the latter does not have an approved street plan.
In contrast to other legal systems, Greek law generally permits the construction of buildings in real estates outside city building plans. Depending on the type of building which is to be built, and its intended use, there are town planning provisions which allow for construction of buildings depending on the size of the real estate in question. For instance, in principle, it is allowed to erect buildings of up to 200 square meters on agricultural land of 4.000 square meters and above.
Naturally, far more flexible town planning provisions apply in the case of building sites due to the fact that their innate purpose is the erection of buildings.
There are two key concepts which must be taken into consideration when considering whether or not to acquire real estate property in Greece: ‘conformity’ and ‘fit for building’ (in Greek ‘artio’ and ‘ikodomisimo’). A real estate is conforming when, in accordance with its area and dimensions, it is possible to erect a building or buildings based on what is permissible according to legal specifications .A real estate which is fit for building is one that has the appropriate features required to achieve the best aesthetical, constructive and financial results. As a result, all the real estates which are fit for building in terms of size and dimension must also fit the conforming requirement.
Choosing the right Real Estate
Choosing the right real estate mainly depends on the particular needs of the natural person/legal entity in question and on the desired use of the real estate. A real estate may be used as a residence, for private use, for agricultural use, for professional use or for use as a business.
The first category (i.e. real estates used as a residence) includes real estates within city building plans, which may either be single house residences or apartments. The construction of multi-story apartments with flats within the cities is commonplace in Greece and the value of the flats on higher floors is usually greater. Because the construction of buildings outside city building plans is allowed, real estates outside building plans may also be used as private residences. Nevertheless, a very important factor is choosing the most appropriate real estate, which should be conforming and fit for building. This is mainly determined by the real estate’s size, dimensions, form and by other minor factors.
Both land allotted by lot and agricultural land can be used for agricultural purposes. Real estates which are to be used for agricultural functions are usually cheaper. If the investor is not interested in a location near financial centers (usually large cities), he/she may find a sizeable real estate at a considerably low price.
Real estates used for professional or business-related purposes, can be found either outside city plans or within city building plans, depending on the activities and the type of business of each particular investor. Such activities or types of business may include:
Finding the right Real Estate
The use of a real estate agent is of great importance in the search for the most appropriate real estate for every business, investor or individual. Estate agents in Greece operate with a special permission and normally receive a fee worth 2% of the purchase price. While searching a real estate for use as a private residence, it is not unusual for individuals to carry out their own personal hunt in the area which interests them, since in Greece, FOR SALE ads are a common sight.
Property law and buying property in Greece
Place your property on a safe legal foundation
Property law in Greece – legal basis for purchasing Greek real estate
If one wishes to purchase real estate in Greece, the purchase of Greek property is governed by the Astikos Kodikas (Greek Civil Code), which is comparable to the German Civil Code (BGB). A notarized contract of sale and entry in the Ipothikofilakio (Land Charges Register) or Ktimatologio (Land Register) is required for the purchase.
As in German law, in Greek law the accession of title to a property is only complete upon entry in the Greek Land Register.
Greek real estate: the legal differences are in the details
In addition to the contract of sales’ special regulations, the sale is entered in the Greek Land Register. The Land Registry (Greek: Ipothikofilakio or Ktimatologio) has jurisdiction for specific municipalities. Unlike the German Land Register, for example, entries were previously named and not property related. The law introducing the Ktimatologio switched the previous name-based registers to a property-based Land Registry system. As this conversion has not yet taken place throughout Greece, this means that in some regions the Land Registers continue to be kept according to person (Ipothikofilakio) to a certain extent. When verifying the ownership status, an entry is verified in terms of the name of the respective vendor and not in terms of ownership status on the basis of entries under the plot numbers. Because of this peculiarity Land Register searches by a lawyer are indispensable in Greece.
Volonakis Law Firm will help you with the problems that arise in this regard, such as verifying ownership status. The following section provides an overview of purchasing property according to Greek law.
Private and commercial property in Greece: – an overview of Greek property law
Volonakis Law Firm: your partner for Greek property law
Partnering international businesses in Greece
What you need to know about Greek property law and accession of title in Greece
Legal basis for purchasing property in Greece
Buying property in Greece – The contract of sale
Greek property transactions are put into effect by concluding a notarized, precisely worded contract of sale. The object of purchase is described accurately, the sale price and when it is due stated, rescission rights and contractual penalties in the event of late payment and/or rescission of the contract of sale stipulated, as is contract implementation to arrive at transfer of title in the Land Register.
Land Register in Greece
Exactly as in the case of German law, according to the Greek Civil Code change of title is effected upon registration with the Land Registry having jurisdiction for the real estate. Payment of the sale price or the residual sale price takes place at the same time as the notary’s record is drawn up and is established in the notarized record.
Payment of land transfer tax is a prerequisite for transfer of title, which is usually carried out by lawyers.
Register of titles in Greece
The Land Registry (Greek: Ipothikofilakio or Ktimatologio) has jurisdiction for specific municipalities. Greek Land Registers have been, however, and to a certain extent still are kept by person (Ipothikofilakio) rather than plot. When searching the Land Register, an entry is therefore verified in terms of the potential owner’s name, whether and when he/she became the owner and by virtue of which legal deed, whether encumbrances, easements, legal disputes, have been registered, etc. A decision has been taken to modernize Greek Land Register practice to alleviate the difficulties arising when verifying ownership status. Restructuring in Greece has been summed up under the term “Ktimatologio”.
Ktimatologio / Land Register in Greece
The Greek Land Register operated according to plots and not owners, public faith in what is entered under the plot, etc., which has been under construction for some time, has already been accomplished and has come into force in numerous Greek regions.
The Greek Land Register/Ktimatologio has so far been implemented in two stages.
Mandatory representation by lawyers for property sale contracts in Greece
Representation by lawyers is mandatory when notarizing most contracts of sale in Greece. The lawyer carries out the Land Register searches, draws up the contract and also preliminarily signs the contract of sale. Statutory contributions must be paid to the local branch of the Law Society for the lawyer’s assistance with the notarized contract of sale.
Establishment of the National Land Register in Greece by Ktimatologio AE
Description of the 2007 and 2008 registration phases, with division according to region. Guidance on deadlines and obligations when registering properties and rights.
1. 2007 registration phase:
During the 1st phase of implementation, Ktimatologio AE took comprehensive measures to accelerate the process of implementing the National Land Register (Ktimatologio) in Greece.
The decision in March 2007 by Georgios Souflias, Minister for the Environment and Regional Planning, meant that all the local authorities in Attica, Thessaloniki and the capitals of the prefectures, which up to that point had not been recorded in the Land Register, were asked to register in the Land Register (establishment of the Land Register and undertaking of registration).
The goal is for two-thirds of the country’s population, 31 million acres and 6.7 million rights to be entered and registered in the Greek Land Register with the nine regions that have been included in the National Land Register.
The Land Register registration scheme was completed in 340 of the country’s regions within the first three months of 2008.
When this scheme comes to an end, approximately 84 million acres and 6 million rights should be registered, and a planned 97 Land Registries should be in operation. The following areas had been registered as of 26.5.2008:
The areas recorded in the Land Register as of the start of 2009 include the following 340 regions:
2. 2008 registration phase:
Other municipalities were included in the Land Register during the second stage. On 17 June KTIMATOLOGIO AE launched the new phase of Land Register registration in 107 municipalities, settlements and communities in Attica, Thessaloniki and the prefecture capitals, which had not been registered in the Land Register during the previous scheme. This latest Land Register registration phase is supposed to be completed in 2011.
Owners of properties in these 107 regions or holders of rights to them living in Greece were initially given a deadline of 31.10.2008 for declaration to the National Land Registry.
Owners living in Greece were then granted a period of grace to 21 November 2008. When this deadline expired, a final deadline of 12 December was set for missing declarations, along with imposition of a fine.
The registration deadline for property owners permanently domiciled abroad expired on 30 December 2008.
Areas and regions newly registered by current extension of the Land Register in Greece
The following is a list of the 107 new regions that were called upon to register in the Land Register:
Prefecture of Attica
Prefecture of Thessaloniki
Other regions
Requirements for registering a property in the Land Register in Greece
Before a property can be registered with the competent Land Registry office:
1. Possible pendencies in connection with the real estate or rights thereto are to be clarified, which include, for example, verifying whether the corresponding titles are properly registered in the local title registers and whether additions and/or corrections are necessary, whether there are still defects in the contracts, or whether as yet open preliminary contracts or resolutory conditions are to be regulated in contracts, etc.,
2. The necessary documents must be enclosed with the application, including
a) Photocopies of the deeds which prove the rights to the real estate (e.g. contracts)
b) Proof of payment of the registration fee for registration in the Land Register (receipt).
When submitting the application, a copy of the applicant’s personal identity card or passport is required, as is a document showing the applicant’s tax reference (e.g. tax assessment, utility bill, etc.).
3. Consequences of missing the deadline for registration in the Land Register
Usually the only option still open to owners who have failed to register their property/rights in a timely manner is to bring a suit before the competent regional court in non-contentious proceedings for recognition of the property within eight years of the expiration of the deadline. The court’s decision allows late registration of the real estate in the name of the actual owner. Only in very rare cases, and only if conclusive proof is at hand, will the Land Registry allow an entry simply by means of application, for example if the owner’s name is already recorded in the Land Registry within the scope of other official procedures for a property.
The branch of a foreign company in Greece
The requirements for operating a branch of a foreign company in Greece are regulated in Art. 50 S.A. Companies Act (Law 2190/20) and in Arts 57-58 of the Greek Limited Liability Companies Act (Law 3190/55). In order for a foreign company to operate a branch, a tax reference must first have been applied for to the tax office having jurisdiction over the branch and an application to establish a branch office filed with the prefecture at the branch’s future domicile before commencing business. The documents required for this are as follows:
In Greece the foreign company’s branch will receive a separate tax reference, under which it can then commence business operations. The foreign companies limited by shares and limited liability companies must keep category III business accounts.
In the amending law of April 2010, Greek legislation has now introduced an annual tax of 15% on property located in Greece where offshore companies are concerned. This occurred to combat tax evasion, as much property in Greece belonged to offshore companies, with the consequence that the owner of the offshore company was not taxed in Greece for the assets and the income therefrom. As a result of the high tax introduced on offshore companies’ property, these are no longer of any practical value in the context of tax savings models.
Mergers & acquisitions in Greece – legal information regarding purchase, reorganization, consolidation, amalgamation and breaking up of companies.
Many entrepreneurial opportunities were created as a result of the boundless European internal market. It is not only “global players”, i.e. the major corporations, which are faced with the issue of expansion abroad, but also medium-sized businesses and companies which would like to have a share of the benefits of an enlarged internal market.
When planning to invest in Greece, German companies are faced with the choice of whether to establish a new company or to take over or invest in an existing company. In addition to the possibility of forming a new company in Greece, there are advantages to taking over or investing in an existing Greek company. Such corporate transactions, including mergers, taking over companies or investing in them, are referred to as “Mergers & Acquisitions”, or “M & A” for short.
1. Mergers & acquisitions in Greece
Since the second half of 2004, the global market for M & A transactions has become much livelier. This trend has not stopped at Greece either, as various recent takeovers has shown. Buying up or investing in other companies can help to improve the market position of and provide tax breaks for medium-sized companies too.
The German entrepreneur who is considering taking over a Greek company should consider that the actual benefits derived from the total of the individual companies following a purchase can be greater than the benefit derived from the individual company viewed separately. Keep these synergistic effects at the forefront of your considerations.
It is possible that until sales are established and generated, organic growth by setting up and developing a new company abroad under one’s own steam may be very costly in terms of time. Buying out an existing business that is well-established in the market can, on the other hand, lead to an immediate market presence and sales generation, and even to direct inorganic expansion of the existing corporate structure. Other decisive reasons in favor of taking over a Greek company include a specific company’s brand, its location, immediately available production capacity, etc.
An investor’s stake can bring new liquidity and thus help to improve an existing company’s market position or, in the case of a company sale, also settle the issue of succession.
Regardless of the alternative that the company chooses, it will have to become knowledgeable of the regulatory framework and also the social and economic conventions in Greece. Another important consideration will be the international interaction between the German (parent) company and the Greek (subsidiary) company.
Steady integration of the EU internal market is impeded, however, by a flood of national laws that have only been partly harmonized with the distinctive features of national law in the specific countries. Previously it might only have been major conglomerates and corporations that had to cope with the regional peculiarities in question, but now, as a result of creation of the EU internal market, small and medium-sized companies are increasingly faced with the differing legislation and national regulations.
The following will highlight some alternatives to setting up a new company.
2. Buying a company
Buying a company is a complex affair, with a wealth of detailed issues requiring clarification. A distinction must be made between the preparation, transaction and integration phases. The first requirement is therefore a project plan for the individual stages and planned sequence.
2.1 When buying a company the sequence will usually be as follows:
If a specific company has not already been chosen for the planned purchase, potential targets must first be screened according to the specifications.
The target company is contacted as soon as one has been found. At this point it may be helpful to bring in an M & A consultant, lawyer, tax consultant, etc.
If the target indicates a fundamental willingness to be taken over, a confidentiality agreement regarding further exchange of information should be signed for understandable reasons (convergence, determination of convergent interests, etc.).
Should both parties express an interest during the initial discussion in continuing the takeover negotiations, they generally sign an “LOI”, or Letter of Intent” and agree on negotiating tactics going forward, with the assistance of an adviser as applicable.
The next stage requires a careful valuation of the business. During what is known as “Due Diligence”, a further distinction is made between “Legal Due Diligence” and “Financial Due Diligence”, i.e. a legal and financial review of the target.
Final organization of the planned takeover is then drafted on the basis of the due diligence outcome.
Price negotiations are conducted subsequent to this (or in parallel).
Where bigger deals are concerned a contract is generally concluded once the planned takeover has been notified to the competent competition authority.
If the contract is signed, make arrangements for an optimum handover and continuation of operations.
2.2 Due diligence (business valuation)
Due diligence plays a significant part in a company takeover. Information relating to the business must be collected in order to value the business and to reduce the obvious and hidden risks associated with the transaction. This also ensures that the strengths and weaknesses inherent in the planned takeover and the opportunities and risks can be assessed. All information, facts and particular features are to be noted in the written due diligence (not the least for documentation and evidentiary purposes!). The due diligence should contain any information relevant to the business, i.e.:
2.3 The contract of sale
If the due diligence has been carried out satisfactorily and the sale price established, it is necessary to lay out the contract for sale of the company. In Greece, contracts for sale of a company are covered by the respective general provisions of civil law in the Greek Civil Code (Greek: AK = Astikos Kodikas) ensuing from the fields of sales and warranty legislation and, depending on the contract’s regulations, other relevant Greek Civil Code provisions. The Greek Commercial Code contains other pertinent regulations (Greek: Emporikos Kodikas).
In addition to the “essentialia negotii”, i.e. details of the parties, the contract of sale contains an accurate description of the object of the sale and the sale price, as well as regulations pertaining to warranty, assurances and guarantees, which are integral parts of any contract for sale of a company. The contract also customarily contains matters relating to assumption of rights and obligations arising from the target’s existing contractual relationships, possible exclusions of liability and barred claims, contractual penalties, prohibitions of competition and arrangements for reversing the transaction in the event of failure to fulfil the primary obligations.
In the event of the vendor breaching the obligations under the contract of sale, the purchaser shall be due the opportunity to reduce the sale price and an entitlement to remedy or substitute delivery. If the contractual performance is delayed or not rendered at all, the purchaser can demand fulfilment and indemnification or rescind the contract of sale and assert claims for compensation due to non-fulfilment.
In the case of joint-stock companies, the purchase or investment is completed as part of what is known as a “share deal”, by transferring the shares to the company in question. In the case of a limited liability company this takes place by transfer of the equity whereas, in the case of the unlisted company limited by shares, the transfer is performed by acquiring shares. Although a notarized contract of sale is required to sell equity in a limited liability company, in the case of the company limited by shares, bearer shares can be transferred by a straightforward (holographic) sales agreement. Certain formalities must be observed, however, when transferring registered shares. Where listed companies limited by shares are concerned, on the other hand, the equity is purchased via the stock exchange.
The purchase of assets in a Greek company is called an “asset deal” and is considered if the emphasis is not on transfer of the company per se, but on transfer of its assets.
2.4 Antitrust law
If takeover of the company creates an especially big company, or if it occupies a high-profile market position, the purchase should also be reviewed from the point of view of Greek antitrust law. In this case, pursuant to Law 3959/2011 Greek antitrust law applies to takeover of companies at national level and European antitrust law applies to international company takeovers.
3. Tax breaks as a result of reorganization, consolidation/amalgamation and break-up
The Greek state grants generous tax breaks to company reorganizations, amalgamations and break-ups according to the Greek limited liability company’s act and the Greek Companies Act. Laws 2166/1993, 1297/1972 and 2386/1996 contain the pertinent statutory regulations. Pursuant to Art. 3, Law 2166/1993, no taxes and fees are thus levied on the transaction.
According to Article 7 of Law 2386/1996, up to 25% of the net profit is exempt from income tax for the first five financial years from transfer to strengthen medium-sized companies that have been created as a result of amalgamation of all forms of newly formed or absorbing company (partnerships, limited liability companies, companies limited by shares). (The company that has been taken over may not be a company limited by shares, though).
Because of these circumstances it can be wise to switch from forming a new company to acquiring an existing company (e.g. by consolidation/amalgamation or break-up), and thus enjoy the said tax breaks and have recourse to other advantages through a change of corporate structure.
4. Company reorganization by means of change of corporate structure
The previous legal structure of an existing company can be changed to a different legal structure by means of reorganization involving a change of form. This is called a company reorganization. Greece does not have a standard law pertaining to reorganization. Some of the pertinent regulations are contained in the Greek Companies Act 2190/1920 (Article 66 of the prevailing version of the Companies Act as amended by Law 2339/1995 and Article 67 of the prevailing version of the Companies Act as amended by Law 409/1986). The pertinent regulations are also found in the Greek limited liability companies act 3190/1955 (prevailing version of Article 51 of the Limited Liability Companies Act as amended by Law 2339/1995 and Article 53 Limited Liability Companies Act).
According to this, legal entities domiciled in Greece can be reorganized by means of consolidation/amalgamation, break-up (splitting up, spinning off, divestment), and transfer of assets or change of structure.
Pursuant to Article 51 Greek Limited Liability Companies Act and Article 66 S.A. Companies Act, reorganization of a Greek company limited by shares (Anonymi Eteria = AE) into a limited liability company (Eteria Periorismenis Efthinis = EPE) through a change of structure takes place by means of notarized resolution approving reorganization by the general meeting of the legal entity wishing to change structure, following prior valuation of the assets and liabilities. The resolution approving reorganization and the requisite declarations of consent from individual shareholders must be recorded by a notary. The provisions on formation pertaining to the new legal structure must be applied to the change of structure.
Pursuant to Article 67 Greek Companies Act, reorganization of a Greek limited liability company into a company limited by shares requires a resolution passed by a three-quarters majority of the general meeting, following prior valuation of the assets and liabilities. The notarized reorganization resolution must contain the Articles of Association of the company limited by shares, details of composition of the first Board of Directors and the following information and be submitted to the Ministry of Trade or its branch office at the local Prefecture for approval.
The notarized resolution on reorganization contains:
Reorganization of a general partnership (Omorhythmi Eteria / O.E.) or limited partnership (Eterorhythmi Eteria/E.E.) into a limited liability company by means of a change of structure takes place pursuant to Article 53 Greek Limited Liability Companies Act, through a notarized reorganization agreement. The notarized agreement contains the information given above for the company limited by shares.
Unless its deed of partnership provides otherwise, pursuant to Article 67, §2 S.A. Companies Act, reorganization of a general partnership or limited partnership into a company limited by shares occurs as the result of a unanimous resolution by all the partners and following prior evaluation of the assets and liabilities.
The name of the legal entity changing structure may be retained as part of the limited liability company’s name. Following formation the general and limited partnerships’ personally liable partners will be liable for the old liabilities of the company changing structure until the disclosure requirements have been fulfilled.
5. Consolidation/amalgamation in the case of Greek joint-stock companies
Pursuant to Article 68 et seq of the S.A. Companies Act and Article 54 of the Greek Limited Liability Companies Act amalgamation of limited liability companies or companies limited by shares is possible either by forming a new company as a result of transferring the assets, in each case in their entirety, of two or more companies (transferring companies) to a new company (limited liability company or company limited by shares) formed by them, or by means of absorption as a result of transfer of the assets, in their entirety, of a legal entity or several legal entities (transferring legal entity) to another existing legal entity (receiving legal entity).
In the case of amalgamation a company transfers all its assets to one or more existing or newly formed companies.
Pursuant to Article 54 Greek Limited Liability Companies Act, for a limited liability company the merger must be approved by a three-quarters majority of votes by the participating companies. The merger may only be completed two months after the disclosure requirements have been fulfilled if no creditors of the company have objected. Furthermore, pursuant to Article 55 of the Limited Liability Companies Act, the parties must conclude a notarized contract of consolidation/amalgamation contract, which contains the information according to the material provisions of the Limited Liability Companies Act.
Where a company limited by shares is concerned, merger is governed by Articles 68-80 of the S.A. Companies Act (Law 2190/1920, respective prevailing version of Articles 68-80 as amended by Presidential Decree 497/87). Pursuant to Article 72 S.A. Companies Act, merger requires a resolution at the general meeting of all the shareholders involved in the amalgamation. According to Article 69 Companies Act, a draft consolidation contract/amalgamation contract is required first.
The draft or the amalgamation contract must contain the following information:
Pursuant to Article 74 S.A. Companies Act, the merger agreement must be approved by the Greek Ministry of Trade (> local prefecture). The general meeting’s merger resolutions are submitted for this purpose, together with the notarized merger agreement, plus a declaration according to Law 1599/1986. The pertinent disclosure obligations must be adhered to at every stage.
Merger by means of forming a new company takes place according to Article 80 S.A. Companies Act, with corresponding application of the provisions on mergers contained in Articles 68 to S.A. 77 of the Companies Act. A new company emerges from merging of the previous companies.
6. Break-up in the case of Greek companies limited by shares
Break-up of Greek companies limited by shares is regulated in Articles 81-89 of the S.A. Companies Act and possible either as a result of merger, formation of a new company, or formation of a new company by merger.
Pursuant to Article 84 Companies Act, general meeting resolutions by all the companies involved in the break-up are required for break-up. Pursuant to Article 82 S.A. Companies Act, the boards of directors of the companies involved in splitting up the business must compose a written break-up agreement. By analogy this contains the information specified above under merger/amalgamation. The statements on merger and Articles 71-74 S.A. Companies Act accordingly apply to the audit report, the disclosure obligations, etc.
According to Article 88 S.A. S.A. Companies Act the provisions on break-up in Arts 82-86 S.A. Companies Act accordingly apply to break-up by formation of a new company.
Break-up by merger and forming a new company takes place according to Article 89 Companies Act, with corresponding application of Article 81 §4, 82-87, or of Article 88 S.A. Companies Act as applicable.
