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Back You are here: Home Legal and Finance Finance Starting a Business on the Greek Islands

Starting a Business on the Greek Islands

Perhaps one of the reasons, you have postponed your move to the Greek Islands is the fact that you simply can’t think of what to do in terms of earning a living. Emigrating is a chance for you to try something new and possibly live out another dream by owning your own business. With strong tourist growth on many of the inhabited islands, there are many opportunities. We take a look at how to set up a business and provide some ideas on what might work.

Business Ventures

Many people dream of owning their own, bar, restaurant or bed and breakfast and all of these are viable options providing you research well before making your final decision. You need to consider the traits, features and tourist numbers on your chosen island as well as the situation in winter when many islands literally close down. Location is paramount and you should look for somewhere with high traffic potential. Being located inland is not always a good choice unless you are next to a popular historic site or in one of the busy inland towns. Some islands like Crete have high expat communities, which could provide you with a year round income, but restricting yourself to “the English bar” could exclude other expat nationalities. Another point to consider is that any successful hospitality business requires a tremendous amount of hard work and long hours. The same applies to dreams of owning a shop or a nightclub.

There are also plenty of opportunities to turn a hobby into a business for example by setting up a specialist holiday like horse-riding or scuba diving. However, such ventures require specialist in depth knowledge and sometimes professional qualifications in this field. Real estate is a sector suffering under the recession at the moment, however that does not mean that setting up a good, well advertised service in this field will fail. Alternatively you could look at existing businesses for sale but be sure to study the accounts in detail. Buy-to-Let is also another source of good revenue providing you buy in the right location and advertise widely. Many tourists still prefer to make their own way to the islands and cater for themselves and on some of the islands there is long term rental potential from the local market especially expats working on foreign contracts or those who have moved out to put a toe in the water before they decide to settle permanently. Alternatively, you may be lucky enough to have a transferable skill like an electrician or hairdresser, which will enable you to set up your own business in any country you choose to move to.

Obtaining an AFM Tax Number

Whatever you choose you will need to find a reliable, English speaking lawyer and accountant to help you round the maze of Greek bureaucracy. You will need your lawyer to obtain licences well in advance of opening and they will also need to apply for your Greek residency permit, a requirement for anyone setting up a business on Greek territory. Your accountant will be able to get you your tax number, known locally as an AFM, from the local tax office. This number is a one off, lifetime number, which is something like a national insurance number. You will need it if you intend to buy a vehicle or property or to register with Greek utilities such as water and electric and to apply for your residency permit. If you are going to rent property yourself you will also have to give the landlord details of your AFM number. Once you have your number you will be required by law to submit an annual tax return.

Health Care and Insurance

Business trading in food and drink are subject to rigorous hygiene rules and you need to ensure that you and anyone working for you has their own personal health book, which is given once you have undergone a series of medical checks. Your lawyer will be able to advise you on where to go in order to secure this step in the business procedure. Once your lawyer has registered your business, you must by law make monthly contributions to the Greek National Insurance fund by registering with the one of the national insurance agencies catering for the self employed like the TEBE or OGA. Again your lawyer will be able to advise you on this point. Your health insurance will cover all members of your immediate family for basic state healthcare treatment. If you employ any staff you must provide them with a contract of employment in Greek and pay part of their insurance contributions, currently 28.06% of their total salary.

Income Tax and VAT

If your income originates in Greece, then you must by law pay income tax in the country in which you are resident. You are allowed to make certain deductions, which your accountant will take care of and there after you are liable to pay tax on the remaining sum. You are also required to pay tax on a monthly basis to the tax office on a pay-as-you-earn basis for your staff. Greek taxation currently starts at 5% for those earning less than 11,000 Euros and rises sharply to 40% for those earning in excess of 22,999 Euros. If your annual turnover is in excess of 10,000 Euros you will have to register for VAT., which is charged at 19% in Greece, although there are reduced rates of 9% for medicines and food and 4.5% for newspapers and books. VAT returns must be filed every two months and the tax office will determine your level of payments. With so much taxation legislation to adhere to it is imperative to ensure that you have an accountant in pace who can conform to these requirements. You will also have to keep receipts and proper invoice books, which display your tax number and you must have a stamp with your tax number on.

Getting Started

Once all of the bureaucracy has been taken care of by your lawyer and accountant you can get on with running your business. One of the keys to success will be advertising and given that you will be relatively new to the island you need to set money aside for proper advertising, which will draw customers to your business. This should also be an ongoing project because new people come to the market all of the time. Expect the first two years to be thoroughly hard work and ensure you have funds to live on during this time.