The IKE entered the Greek economy in 2012. It is a capital company, and it has been created in accordance with European standards. These standards give us a guide, so that the management of the company becomes easier, even for entrepreneurs of very small businesses, who do not have the help of advisers for managing their company.
Below we briefly set out the reasons why the IKE has become the > in the establishment of legal entities.
Low establishment cost
Establishment is now carried out electronically (resulting in reduced time for establishment and tax number issuance)
Low capital (min. 1€)
Low e-EFKA contributions (dividends are not taken into account in the calculation of e-EFKA).
The remuneration of the manager(s) (which are taken into account by e-EFKA) function as a business payroll expense, with the result that we benefit in the corporate tax component.
Protection of personal assets. (The partners in capital companies are not liable for the company’s obligations with their personal assets)
When, then, should a personal company (sole proprietorship, general partnership, limited partnership) be converted into an IKE?
The above question is examined in two parameters:
The first parameter is qualitative. Here the partner(s), who are at the centre of decision-making in the company, should have decided on the future of the company, what the goals are, and how willing they are for the company to operate separately from the partners (and specifically the cash desk).
The second parameter is quantitative. Here the partner(s), according to the level of profitability and in cooperation with their financial adviser, examine the data in order to determine whether conversion into an IKE is indeed worthwhile.
Below we present a quantitative example between a G.P. & an IKE with two partners and with profits of 50.000€.
We present the example with board remuneration of 30.000€ and without board remuneration.
G.P. IKE with Board Remuneration IKE without Board Remuneration*.
Tax 14.500€ 5.800€ 14.500€
Business activity fee 1.000€ 1.000€ 1.000€
WHT & stamp duty 1,2% – 3.392€ –
Solidarity contribution 1.001€ 132€ –
Insurance contribution 9.527,25€ 8.085€ 4.030,80€
Total 26.068,25€ 18.309€ 19.530,80€
*Any distribution of dividends is subject to a charge of 5%
Advances for the next financial year due to offsetting are not taken into account.
From the above example one can judge which form of company one would choose.
Any thought or concern you may have, whether you are an established entrepreneur or a new one or just before your start, it would be our pleasure to meet you and consider with you which form of company suits you best.
