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Monday, January 24, 2022

How a foreign company buys property in Greece

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By Christos ILIOPOULOS*

 

The significantly low prices of properties in Greece over the last few years, which is the result of the economic crisis in the country, has attracted many prospective buyers from all over the world, who are considering the purchase of plots, houses and apartments offered for sale in Greece. In addition, the number of tourists visiting the country yearly from about 12 million in the year 2012, has skyrocketed to approximately 29 million expected for 2017. This has sparked an increased interest from foreigners for real estate in the Aegean islands, in Crete, in the Ionian Sea and in Greece’s mainland.

The most common transaction is a foreign individual buying  real estate property in Greece. However, sometimes it is not the individual who is the buyer, but a foreign company (legal entity), meaning a company having its seat in a country outside of Greece. This company does not have any business activity in Greece, at least until now. Therefore, this company does not have any dealings with the Greek tax office and of course, no AFM, which is the Greek tax number, that every person and legal entity must have if they want to do business and earn income in Greece.

One of the preconditions, therefore, for the foreign company to obtain the ownership of property in Greece, is to apply for and obtain an AFM, which is a Greek tax number from the tax office. The tax office which has jurisdiction for such a transaction is in the Athens area, (Kalllithea), irrespective of the area where the property to be purchased is located, either in Athens or anywhere else in Greece. To do that, a person who has the authority to represent the foreign company or a lawyer in Greece, either of them having proper documentation or power of attorney, must file at the competent tax office the constitution of the company or its articles of association or any other document with similar meaning and legal value. This must be officially translated in the Greek language, which can be done either by the Translation Department of the Greek Ministry of Foreign Affairs, or by a lawyer in Greece, who knows and speaks the foreign language in which the company constitution or letters of association is drafted.

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The constitution of the foreign company must be filed to the Greek administration (tax office for AFM) having the Apostille stamp from the country of its origin, if that country has adhered to the Convention of the Hague of 5 October 1961. If not, the constitution of the foreign company must have the stamp – notarization of the Consulate of Greece in the country of the seat of the company or the notarization of the foreign country’s Consulate in Greece.
Very often, the constitution of the foreign company or the basic legal document of its creation and operation does not have the legal wording and form of the equivalent document for a company in Greece. This creates the need to explain to the Greek administration the nature of the foreign documents and to persuade them that these documents are the equivalent of what we call in Greece “the constitution of the company”. The same applies for other documents of or for the company, originating from the foreign country, which prove the state of its legal status, its shareholders, the status of its operation etc.

In order the foreign company to obtain the AFM in Greece, and thus to be able to purchase property in the country, it must send a power of attorney to a person living in Greece, to become the company’s tax proxy. This person must sign an affidavit stating that he/she accepts to become the foreign company’s tax proxy. We will also need an official document from the foreign authority observing the operation of the foreign company, that the company is still in operation and that it has not terminated its legal existence.

Once the tax office issues the AFM in the name of the foreign company, the company can purchase the property in Greece. However, by obtaining this type of AFM (Greek tax number), the foreign company cannot do other business in Greece. If it is to start business activity in Greece, the foreign company must file additional tax documents to the Greek tax office and establish itself in the country for proper business activity, income earning, taxation etc.

 

*Christos ILIOPOULOS, attorney at
the Supreme Court of Greece , LL.M.
www.greekadvocate.eu
e-mail: [email protected]
[email protected]

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