Doing Business in Greece
Amid relentlessly negative reporting of the Greek economy, trade has held up. Despite an inevitable drop in domestic consumer demand, the outward-looking Greek private sector has led many Greek companies to develop their business in SE Europe. This diversification will continue, providing new opportunities for UK companies to exploit often difficult markets through Greek partnerships.
The Greek government promotes a major privatisations programme which includes the sale of airports, ports, public land, utilities and transport infrastructure.
More than 50% of Greek industry is located in the Greater Athens area. Greece’s main economic sectors are agriculture, tourism, construction and shipping. Greece’s total labour force amounts to approximately 4 million people of which 15% are employed in agriculture, 23% in industry and 62% in the services sector. Basic economic facts on the Greek economy can be found in FCO’s website.
The EU is the country’s largest trading partner, but Greece is also developing links with East European and Black Sea countries. Greece still has a large public sector but the Government is following privatisation policies and major structural reforms are under way. Following a decade of uninterrupted economic growth (>4% per annum), Greece’s macro imbalances have sparked asset quality and funding concerns among investors, which resulted in Greece seeking assistance from the IMF, EU and ECB in order to avoid bankruptcy. A memorandum was signed, agreeing on introducing reforms and restructuring of the public sector, subject to releasing funds to the Greek economy. The eventual recovery will be mainly driven by externally driven sectors, like shipping and tourism, as domestic demand will remain weak due to fiscal adjustment efforts. More than 15 million tourists visit the country every year with 2 million coming from the UK.
Preparing to export to Greece
British companies wishing to develop their business in the Greek market are advised to undertake as much market research and planning as possible in the UK. In most cases doing business in Greece requires local representation in the form of an agent or distributor. The appointment of a local partner/representative will only be the first step.
Greece is a market where personal relationships are important. This requires an investment primarily of time and personal presence. Likewise, product training for the agent’s workforce is essential, as are regular updates on developments, modifications, competitor activity etc. Therefore regular visits to the market, especially during the early phase, are an important part of a successful interaction with the agent / distributor.
UKTI’s team in Greece can provide a range of services to British-based companies wishing to grow their business in the Greek market. Our services include the provision of market information, validated lists of agents/potential partners, key market players or potential customers; establishing the interest of such contacts in working with the company; and arranging appointments. In addition, they can also organise events for you to meet contacts or promote a company and its products/services.
What companies should consider when doing business
Greece has been an EU member since 1981; therefore European business practises and standards generally apply. Companies setting up business in Greece for the first time should consult appropriate legal, financial and taxation specialists to avoid costly mistakes. Such procedure is normal and comparatively inexpensive in Greece. The Invest in Greece agency can provide advice on inward investment into Greece.
Key areas for business
Most agents/distributors operate in the Athens area and cover the whole of Greece, but sometimes it may be necessary to appoint a separate agent of the Thessaloniki region. A representative’s contacts and local knowledge will be particularly valuable if you are applying for public sector tenders.
The tourist areas are of particular importance to the food and beverages sector, due to the large number of foreign tourists visiting Greece especially if one bears in mind that the population of the country almost doubles in the period May-September.
Customs and Regulations
Goods produced in the UK (or another member state of the EU) are not liable for import duty on entry into Greece. Goods which originate from outside the EU, but which have had duty paid on them in the UK may enter Greece from the UK without attracting any further duty.
Legislation and Local Regulations
Greece adheres to all EU standards and specifications. There are no import restrictions and there are no other tariff or non-tariff barriers. Capital and earnings can be freely repatriated. There is a bilateral agreement to avoid double taxation. There is no bilateral Investment Promotion and Protection Agreement. Greece is a member of the WTO. Greece has investment and tax treaties with a wide range of countries. The British Embassy can provide further details. Companies are always advised to seek legal/taxation advice before entering into a joint venture or similar type of partnership. Lists of local lawyers and chartered accountants are available on request from the UKTI Section of the British Embassy in Athens.
Labelling and Packaging Regulations
Greece complies with all EU regulations. Instruction manuals, food product labels etc must be translated into Greek. Further information is available from: Ministry of Finance (www.minfin.gr)
10, Karagiorgi Servias str. GR -105 62, Athens Tel: +30 210 3375000
and the Greek Standards/Technical regulatory authority,
Getting your goods to market
The main options for Greece are road, airfreight, sea-freight, post, air parcel post and express or courier service and rail freight. For all methods, except post, it is often easier to use a freight forwarder. Forwarders should be approached in the early stages of market research rather than waiting until the goods are ready to go. The main option by road/sea is via Italy; there is also a long land route via Romania/Bulgaria via former Yugoslavia. Major ports are Piraeus, Patras, Igoumenitsa, Thessaloniki and Iraklion. Cosco runs a big container facility in Piraeus port, with additional warehousing facilities available around the ports. There are numerous freight forwarding companies in Greece whose details can be found in the Greek Yellow Pages (English Language section). The British International Freight Association (BIFA) can provide assistance to companies who are new to exporting. There is a directory on the BIFA web site www.bifa.org. “Search by detail” to select members by country, region or specialisation. A BIFA registered member can advise companies on such matters as modes of transport, distribution methods, costing, documentation and payment terms. BIFA can be contacted on +44 (0)20 8844 2266.
Responding to Tenders
In Greece all major public projects select their suppliers of products and services through public tenders, published in the EU Gazette. Projects which are considered an opportunity for UK companies will be published on the UKTI website under the ‘Business Opportunities’ section and also viewed in the Open to Export relevant page.
Goods which are in free circulation within the European Union (i.e. those which are not liable to pay customs duty in the EU as they either originate there or the duty has already been paid) can move between member states without any documentation. This does not apply to excise or controlled goods which still require documentation. However it is advisable still to send normal commercial documentation with the export (e.g. invoices, packaging lists) for dispatches to Greece.
VAT – Under the current European Union destination based VAT system, goods are zero rated for VAT by the seller, provided that the goods actually leave the member state and are acquired by a buyer who is registered for VAT in another member state. To be able to zero rate goods, the seller must show both their VAT registration number (with the prefix GB) and the customer’s VAT number(with the prefix EL for Greece) on the invoices. If a business is supplying goods to customers not registered for VAT in Greece, the general rule is that a UK business should charge the UK rate of VAT and account for it as if the firm was supplying that customer in the UK. There are exceptions to this rule, notably for mail order sales above a certain level. The new rates of Greek VAT are 13% and 23%. This applies to all goods except unprocessed agricultural products.
Recruiting and Retaining Staffing
Most small and medium-sized enterprises doing business in Greece will not need to hire staff as this will be taken care of by the representative. In general terms, however, staff recruitment is not a problem. Unemployment is over 27%. The labour force is highly educated and most Greek businessmen speak at least some English. There are local agencies offering office support services to companies setting up in Greece.
Topics: Business Development, Customs Procedures, Documentation, Export Concept, Export Planning, Getting Started, Legislation & Regulation, Taxation, and Transport & Logistics