“Greece, your strategic link to the Balkans, Black Sea, Eastern Europe and Eastern Mediterranean Region”
Within a radius of 500 km there is a market of 35 million inhabitants spread over a major part of Greece, Bulgaria, FYROM, Albania and Serbia-Montenegro.
Within a radius of 1000 km there are an additional 146 million people. This market includes Turkey, Romania and southern Italy.
In a 1500 km radius there is direct access to the markets of Hungary, Croatia, Slovenia, Libya, Egypt and Cyprus.
History and government
Greek (Hellenic) civilization dates back to ancient times and Greece is famous for giving birth to democracy. Throughout its long history, Greece’s borders expanded and retracted continuously. Despite the fact that, at various times, Greece had been under foreign rule (Roman, Ottoman) it has, since the 1800’s, emerged as an independent nation. Notwithstanding the many years of foreign occupation Greece has retained its traditions, homogeneous population, and language.
Greece is a Presidential Parliamentary Democracy with the members of parliament being elected for four year terms. The head of the State is the President, who is elected for a five year period by the Parliament. The functions of the State are divided into three branches: the executive, the legislative and the judicial.
In administrative terms, Greece is divided into 13 regions, 51 prefectures and the autonomous administrative region of Mount Athos. At the level of local government, the recent "Kallikratis Program" reorganized the administrative map of the country, abolishing the plethora of previously existing 'communities' and creating uniform, larger municipalities. The mayors and the prefects of the country are elected by ballot of the people every four years, while heads of regions are appointed directly by the government. The right to vote in Greece is universal and mandatory for all citizens aged over 18 in the country. The supreme courts of Greece are the "Areopagus" (the Supreme Court of Civil and Penal Law) and the Council of State. Finally, it should be noted that in Greece the death penalty does not apply. Following its last review in 2008, the Constitution of Greece explicitly repeats this specific prohibition, which also applied in the previous text of the Constitution.
Following its full membership of the European Monetary Union (EMU), Greece replaced its former monetary unit, the drachma (GRD), with the Euro (EUR) on 1 January 2002. The conversion rate was 1 EUR = 340.75 GRD.
Business culture in Greece
Greece has a long and eventful history. It was part of each of the great empires - the Roman, the Byzantine and the Ottoman that ruled the region. Greece has strong historical ties with south eastern and western Europe, Asia and Africa. At the crossroads of so many civilizations, Greece is gifted with a rich and fascinating cultural heritage. The country's turbulent history had remarkably little effect on the Greek language. Modern Greek is easily recognizable as the language of Plato.
The Greek culture shapes acceptable business practice. An emphasis on family and personal relations means that many Greeks like dealing with people that they know and trust and prefer face-to-face meetings to emails and telephone calls. It also contributes to the widespread nepotism in Greek business.
The slower pace of life in Greece as well as the Greek love for haggling, affects the pace of business. Making decisions can take a while, meetings are often drawn out and patience is required. Many people also place less emphasis on punctuality than elsewhere in Europe although this doesn’t mean that business isn’t taken seriously and foreigners should still be on time.
In Greece the Cultural gestures can also make for confusing negotiations. Greeks also maintain traditional views of democracy and honor. Meetings often entail vigorous exchanges of ideas but expats should take care when disagreeing with a colleague, which should be done in such a way that doesn’t reflect poorly on the other person. A lot of importance is placed on experience as well, and employees are expected to respect seniority.
Attitude to Foreigners
With the economic situation and record unemployment in Greece, it may be difficult for foreigners to conduct business in the country. With the rise of anti-foreigner sentiment in certain sections of society, even with the government’s crackdown on the ultra nationalist Golden Dawn party in 2013, some Greeks may be hesitant to do business with foreigners. That said, however, the majority of Greeks are opposed to the party’s hard-line positions and, after the necessary trust has been built, would be more than happy to engage with a foreign-owned and run business.
Language of business
While many Greeks do speak English, having a working grasp of the Greek language or going into business with a first language speaker are essential for a successful business.
Business dress: Business dress differs. Bigger firms often require formal business attire while many smaller businesses are relatively casual. Expats are advised to dress formally in their first meetings with potential associates. Given the influence of the Greek Orthodox Church, female expats should dress conservatively in the business environment.
Business hours: Business hours in Greece are normally from Monday to Friday, either from 8am to 4pm or 9am to 5pm. Some businesses also stay open on Saturdays.
Greeting: Shaking hands with men and women is the most common business greeting in Greece. Close acquaintances embrace or kiss each other. Greeks appreciate it when people attempt to speak their language and a simple “kaliméra” (good morning) or “kalispéra” (good afternoon) goes a long way.
Gifts: Especially with the country’s reputation for corruption, gifts are best left to friends, family and close acquaintances.
Gender equality: While women are equal under the law, many Greeks retain a “traditional” view of gender roles. There is still a glass ceiling in the higher levels of business hindering many women from reaching the boardrooms of Greece’s biggest companies.
Greece enjoys a free public educational system, while all universities are also free. In addition, there are many private schools. Part of them is foreign, offering education in English, French, German, Italian and others. Foreign universities also have departments in Athens and other cities under restrictions of the constitution.
A new economic model is being implemented, aiming to create an investor friendly business environment which will foster a climate of confidence and trust based on entrepreneurship, international orientation and competitiveness. Greece steadily enjoyed high growth rates throughout the past decade based on supportive fiscal policies, entry into the Euro zone, undertaking the Athens 2004 Olympic Games and EU Community Support Framework (CSF) funding. In the third quarter of 2007, real GDP growth rate was approximately 4.1%, among the highest in Europe. Greece’s high rate of growth is expected to continue, providing a platform for the growing domestic market. The inflation rate in August 2007 was approximately 2.5%. Furthermore, interest rates on Government bonds were, in the beginning of 2007, approximately 3.42% (three month Government Treasury Bills), a change from approximately 11% in 1999. Greece’s revised Stability and Growth Program promotes important reforms in rationalizing public spending, increasing state revenues, implementing gradual fiscal adjustments, reducing the budget deficit, public spending and unemployment. In 2006 the deficit was reduced from 4.3% of GDP in 2005 to approximately 2.6% of GDP, in line with Greece’s commitments to the EU. The unemployment rate was 8.1% in the second quarter of 2007 compared with 10.4% in 2005.
One of the national strategic targets is the establishment of Greece as an international center for education, tourism, shipping, banking, and commerce. Other strong economic sectors include agriculture, services, manufacturing, high tech, construction, and those related to natural resources. One of the national strategic targets is the establishment of Greece as an international center for education, tourism, shipping, banking, and commerce. Other strong economic sectors include agriculture, services, manufacturing, high tech, construction, and those related to natural resources. The government has expressed its intention to privatize various public entities, such as utilities, public transportation, and banks. Infrastructure projects either have been completed, such as the new international airport at Spata, the Athens Metro and the major motorway that traverses Attica (Attiki Odos) or are underway, such as major national motorways, the expansion of the Athens Metro, the natural gas project, and the modernization of the public telephone and Power Corporation which are the most significant. There are still many opportunities available for investors interested in major infrastructure projects.
Government economic and fiscal policy
The major objective of government economic policy is to continue to reduce inflation, public sector debt and the trade deficit, as well as to complete the privatization of public entities. The Ministry of Economy and Finance has introduced a tax law that reduced, over a three-year period, from 2004 to 2007, the corporate income tax rate from 35% to 25% for Societies Anonyms and limited liability companies, and from 25% to 20% for partnerships.
Greece's main trading partners are other European Union members, primarily Germany and Italy. Greece's main exports are: Commodities - Manufactured Goods - Textiles - Food - Petroleum Products - Fuel - Minerals - Tobacco - Cotton. Tourism contributes around 15% to the GDP; while shipping over 4.5%.
Investment incentives are in various forms and include cash grants, lease payment subsidies, and tax exemptions. The primary investment incentive law currently in force is Law 3299/2004. The scope of the law is aimed at increasing employment, improving the competitiveness of the economy, fostering technological change, and achieving regional convergence. The new incentive law was well received by the business community and 2 328 applications involving investments were approved by 15 December 2006 totaling more than EUR 3 billion and the creation of 10 338 new jobs. Certain benefits are also provided by Legislative Decree 2687/1953.
The Greek road network continues to improve significantly. The Egnatia Highway (Egnatia Odos) has revived a historically important route across northern Greece, boosting east-west transportation and communication links and connecting the port of Igoumenitsa with Thessaloniki and points further east with highly improved road links. Greece's extended coastline (over 13.5 km) and multitude of islands (more than 3,000) underline the importance of maritime transportations, which are highly developed. As there are no navigable rivers and only one canal (the Corinth Canal), Greece has an extensive bus and ferry network. Railway construction began in the 1880s. The total railway track measures almost 2,600 kilometers. The Greek railway system is now in the process of being privatized. The constructions of the Athens Metro commenced in 1993. This Metro network, which opened to the public in January 2000, has significantly improved transportation in the capital and has relieved the traffic congestion problems. Further extensions are either being under construction or planned to begin in the near future. Moreover, the Thessaloniki Metro is under construction and should be completed by late 2014.
A domestic flight network links Athens with 34 domestic airports. Greece's main air terminals are “Eleftherios Venizelos” International Airport in Athens and Thessaloniki “Macedonia” airport. Crete, Corfu, Rhodes, Cos, Lesbos, and Alexandroupolis also have international airports. The former national carrier, Olympic Airways, has now been privatised and renamed as Olympic Air. Domestic competition is growing rapidly, while new airlines are entering the industry. However, the two major competitors Olympic Air and Aegean Airlines are working towards merging.
Access to Markets
Greece is Europe's strategic link to the sizeable, emerging markets of the Balkan, Black Sea, eastern European and eastern Mediterranean regions.
Greece's advantageous location provides access and opportunity to the neighboring regional markets while Thessalonica, the capital of northern Greece, offers the financial and trading services needed in order to conduct business in the regional markets.
An existing network of 4,156 Greek companies has initiated direct investment programs or marketing agreements in the regional markets.
Greek business people have the cultural understanding of the regions and the practical experience of doing business there.
Greece is the oldest EU member country in the region and is also considered a point of political and economic stability in the area.
A market of 35 million inhabitants spreads over a major part of Greece, Bulgaria, FYROM, Albania and Serbia-Montenegro, within a radius of 500 km.
Alternative market and an additional 146 million people to include countries such as: Turkey, Romania and southern Italy, is within a radius of 1000 km.
Also and in a 1500 km range, there is direct access to the markets of Hungary, Croatia, Slovenia, Libya, Egypt and Cyprus.
Athens Olympic Games
Athens successfully hosted the 2004 Olympic Games. The country which gave birth to the Olympic spirit more than 2000 years ago, Athens, staged the first modern Olympic Games in 1896 and after 108 years for the second time. The 2004 Olympic Games have provided long infrastructure and technology via major changes.
The stock exchange
The Athens Stock Exchange S.A. (ATHEX), established in 1876, is the main securities market in Greece. Currently, there are three groupings of securities, the “Big Capitalization” category (“Big Cap”), the “Medium and Small Capitalization” category (Mid & Small Cap), and the “Special Stock Exchange Characteristics” category.
The role of the stock exchange in Greece as an avenue for investment and a source of funds for companies has been strengthened in recent years by modernizing and upgrading legislation, resulting in a significant increase in the volume of transactions in shares and bonds. There are 83 companies in the Big Cap category, 181 in the Mid & Small Cap category and 18 in the Special Stock Exchange Characteristics category. There are also several debt securities listed, primarily (tax-free interest) bonds of the Greek Government and state-controlled public utility enterprises. Most of these bonds are actively traded between banks in the interbank market. Various factors contributed to the development of the stock exchange, especially in the late 1980s and during the 1990s, in line with the worldwide trend for small developing exchanges. Some of the factors that have contributed to a more favorable atmosphere for investing in the stock exchange are the listings of bonds and bond loans, the good performance of certain listed companies coupled with the quick capital appreciation that new listings offered, the listing of shipping companies, the tax-free income of profits distributed by Portfolio Investment Holding companies and Mutual Fund companies, the reduction of the transfer tax imposed on the sale of listed shares, the enactment of Law 3401/2005 which implemented into Greek law the EC Directive 2003/71 and the close supervision of the capital market by the competent supervising authorities.
The laws and regulations governing the securities market and listing of shares were amended in compliance with EU directives and regulations. The requirements for companies seeking to list their shares on the ATHEX for the first time in the Big Cap category, as specified by Law 3371/2005 and the ATHEX Regulation, may be briefly summarized as follows:
The company must be a Greek “S.A. Company” or an equivalent foreign entity with a minimum equity of EUR 15 million on a consolidated basis.
The cumulative pre-tax profits of the company of the previous three years must be at least EUR 12 million and not less than EUR 3 million in any one of the three years or its EBITDA of the last three years must be at least EUR 16 million and not less than EUR 4 million in any of the three years.
Total capitalization must be at least EUR 100 million.
The company must have published at least three annual financial statements audited by a certified auditor and have a satisfactory structure of assets in its last balance sheet. In case the company has published consolidated financial statements, these must be audited by a certified auditor as well as the financial statements of the companies included in the consolidated financial statements. The Capital Market Committee may allow, under certain conditions, the listing of companies which have been in existence for less than three years All financial years for which financial statements have been published must have been audited by the tax authorities. In the case of a foreign entity the relevant audit should be carried out by an internationally recognized auditing firm which prepares a special tax report for tax liabilities.
Before a decision for the listing of the shares is taken, the shares of the company must be dispersed over an adequate number of shareholders. Adequate dispersion exists when at least 25% of the shares are held by a minimum of 2 000 people. Under certain conditions, the Capital Market Committee may allow the listing of the shares which have a lower dispersion but in any case not less than 5%.
A number of documents, including financial statements for the last three years, articles of association and the like, must be submitted to the ATHEX together with the application for listing. Moreover, under Law 3401/2005, companies are required to publish a prospectus in line with Commission Regulation 809/2004, which shall be approved by the ATHEX and the Capital Market Committee. Securities already listed on other EU stock exchanges can use their existing prospectuses.