UK or Greek company registration

[Nick86]

I am currently in the process of setting up a holiday charter business located within the Ionian sea ("you must be crazy" I hear you say - well, yes, I am). It will only consists of one yacht (50ft oceanis or similar).

I was wondering if anybody would be able to highlight the pros and cons of setting up a UK registered company and operating within greece, or whether is it better to register a local company within Greece?

I have recieved some professional advice however it is always good to have other opinions. One member of this forum has already been very helpful by advising of the current VAT status for Greek registered charter companies (you know who you are!).

I will appreciate any contribution.

Thanks

 

[sailaboutvic]

Melody would be a good person to answer your question , has she been there and got the T shirt , might be best to PM her

 

[jimbaerselman]

Irrespective of where the operating company, or the boat, are be registered, I'm sure you realise the the vessel must be operated according to Greek law governing use of boats for charter within Greek waters.

 

[Nick86]

Thanks sailaboutvic - I'll PM her if she doesn't mind..

Also, thanks for the info jimbaerselman, I was aware that we'll need to comply however I am still waiting on full details of what that looks like.

 

[Sybarite]

I am currently in the process of setting up a holiday charter business located within the Ionian sea ("you must be crazy" I hear you say - well, yes, I am). It will only consists of one yacht (50ft oceanis or similar).

I was wondering if anybody would be able to highlight the pros and cons of setting up a UK registered company and operating within greece, or whether is it better to register a local company within Greece?

I have recieved some professional advice however it is always good to have other opinions. One member of this forum has already been very helpful by advising of the current VAT status for Greek registered charter companies (you know who you are!).

I will appreciate any contribution.

Thanks

Irrespective of where the company is registered if you operate comercially in a territory you owe your taxes there. If you are not incorporated there you need to appoint a fiscal representative who will satisfy all the necessary fiscal obligations on your behalf.

 

[Nick86]

Cheers Sybarite, I suppose you could view this as a "con" to having a uk registered company operating within Greek territory. Double taxation and accountancy expenses?

 

[Melody]

A lot will depend on things you don't mention like where you will be tax resident, how many weeks you will operate, where your office will be, where people will book, what country the yacht will be flagged and commercially registered in.

I would look into setting up a NEPA, which is a special type of limited liability company for Greek-flagged professional yachts. Any EU citizen can own a NEPA and there are numerous tax and VAT advantages. If you don't live in Greece you may have to appoint someone to act for you, and you'll need a Greek lawyer and accountant. PM me if you want suggestions but I don't know any in the Ionian, only Athens area.

If you run a UK flagged yacht, it will still need to be inspected by the Hellenic Registry, as well as have UK commercial registration, as far as I know, unless the law has changed. Again, a good lawyer can advise you on that. The main advantages of having a UK company that I can think of off-hand are that it will be much quicker and cheaper to set up, UK accountancy fees will be smaller, if you are only doing a few charters you may not need to register for VAT, and if your main expenses will be in the UK - office, advertising etc. it will be easier to claim these.

If you intend to live in Greece and to seriously run a business here I'd definitely go for a Greek company. It will be more hassle initially but it will prove easier and more profitable in the long-run. There is also a good professional organisation for Greek yacht owners that can provide advice, information, and support and you can join even if you only own one Greek professional boat.

If you are basically going to remain resident in the UK, if the majority of your clients are likely to be from the UK, if that's where you will market and buy the majority of your supplies from, then a UK company might be more suitable.

We have both Greek and UK companies but that's not worth it for just one yacht.

By the way, you are not crazy to go into chartering in Greece, especially if you have a new boat. There is a big shortage of new charter yachts here due to the problems of getting credit over the past few years and now capital controls. The demand for bareboat charter in Greece is quite buoyant.

Be prepared for a lot of hassle with bureacracy though, whichever you decide. Having a UK company won't totally protect you against that

 

[Sybarite]

A lot will depend on things you don't mention like where you will be tax resident, how many weeks you will operate, where your office will be, where people will book, what country the yacht will be flagged and commercially registered in.

I would look into setting up a NEPA, which is a special type of limited liability company for Greek-flagged professional yachts. Any EU citizen can own a NEPA and there are numerous tax and VAT advantages. If you don't live in Greece you may have to appoint someone to act for you, and you'll need a Greek lawyer and accountant. PM me if you want suggestions but I don't know any in the Ionian, only Athens area.

If you run a UK flagged yacht, it will still need to be inspected by the Hellenic Registry, as well as have UK commercial registration, as far as I know, unless the law has changed. Again, a good lawyer can advise you on that. The main advantages of having a UK company that I can think of off-hand are that it will be much quicker and cheaper to set up, UK accountancy fees will be smaller, if you are only doing a few charters you may not need to register for VAT, and if your main expenses will be in the UK - office, advertising etc. it will be easier to claim these.

If you intend to live in Greece and to seriously run a business here I'd definitely go for a Greek company. It will be more hassle initially but it will prove easier and more profitable in the long-run. There is also a good professional organisation for Greek yacht owners that can provide advice, information, and support and you can join even if you only own one Greek professional boat.

If you are basically going to remain resident in the UK, if the majority of your clients are likely to be from the UK, if that's where you will market and buy the majority of your supplies from, then a UK company might be more suitable.

We have both Greek and UK companies but that's not worth it for just one yacht.

By the way, you are not crazy to go into chartering in Greece, especially if you have a new boat. There is a big shortage of new charter yachts here due to the problems of getting credit over the past few years and now capital controls. The demand for bareboat charter in Greece is quite buoyant.

Be prepared for a lot of hassle with bureacracy though, whichever you decide. Having a UK company won't totally protect you against that

I believe that the main reason why you have a lot of Red Ensigns on large yachts is that the boats belong to British offshore companies which are non-taxable outside of British waters.

 

[Melody]

I believe that the main reason why you have a lot of Red Ensigns on large yachts is that the boats belong to British offshore companies which are non-taxable outside of British waters.

The reason for red ensigns on Greek yachts is usually that the Greek owner is trying to avoid having the yacht declared as an asset. In Greece you have to declare all assets - cars, boats, houses, etc - on your annual tax return. If you own more than the tax office thinks you can afford from the income you declare they will investigate. You have to give your tax number when you buy a car or boat in Greece so you can't own assets and not declare them. If you buy through a UK company, however, they don't get declared. The UK provides a lot of loopholes for tax-dodgers from other countries ...

If you are going to charter in Greece you can do it with a UK-flagged yacht, as long as it is commercially registered in the UK, but you still have to comply with much of the Greek legislation for chartering. These include things such as filing charter agreements with the PP, complying with Hellenic Registry standards which are slightly more rigid than UK ones in some ways, carrying an appropriate amount of insurance, and ensuring charterers sign that they accept Greek laws. I think you may need a Greek tax number if you are chartering in Greek waters, even if you are running the yacht through a UK company, but an accountant can advise on this.

 

[KellysEye]

From memory all Sunsail boats in Greece have a Greek flag which implies you would need need one if you intend to charter. I found this be prepared for a lot of red tape and time:

SOME PARTICULARS OF GREEK LEGISLATION
1. The right to charter "professional" pleasure craft under Greek flag belongs solely to yacht owners, operators and brokers.
2. It is prohibited for pleasure craft under foreign flag to be chartered from Greek harbours or to take on passengers for a fee. The same applies to crafts under Greek flag that are not licensed as "professional".
3. Pleasure craft under an EU member-state flag or the flag of a state of the European Economic Area and European Free Trade Area, excluding Switzerland, may be chartered on a total charter basis only between Greek ports on the coasts of mainland Greece, without approaching island ports. They can approach island ports only of they exceed 650 G.T. Another exception is made in special circumstances and only by special license granted by the Minister of Merchant Marine, under certain conditions. This exception applies to all foreign flag craft.
4. For charters arranged abroad, the first Greek harbour sailed into is considered to be the first departure harbour.
5. Any chartered vessel must, prior to sailing from the departure harbour and for each cruise, be furnished with a copy of the charter agreement, certified by the Port Authority, where a copy will be deposited.
6. Before each sail, the skipper is required to deposit with the local Port Authority a list with full data of the crew and the passengers, a certified (by the Port Authority) copy of which he must carry on board, together with all other documents of the vessel, throughout the cruise.

 

[Melody]

From memory all Sunsail boats in Greece have a Greek flag which implies you would need need one if you intend to charter. I found this be prepared for a lot of red tape and time:

SOME PARTICULARS OF GREEK LEGISLATION
1. The right to charter "professional" pleasure craft under Greek flag belongs solely to yacht owners, operators and brokers.
2. It is prohibited for pleasure craft under foreign flag to be chartered from Greek harbours or to take on passengers for a fee. The same applies to crafts under Greek flag that are not licensed as "professional".
3. Pleasure craft under an EU member-state flag or the flag of a state of the European Economic Area and European Free Trade Area, excluding Switzerland, may be chartered on a total charter basis only between Greek ports on the coasts of mainland Greece, without approaching island ports. They can approach island ports only of they exceed 650 G.T. Another exception is made in special circumstances and only by special license granted by the Minister of Merchant Marine, under certain conditions. This exception applies to all foreign flag craft.
4. For charters arranged abroad, the first Greek harbour sailed into is considered to be the first departure harbour.
5. Any chartered vessel must, prior to sailing from the departure harbour and for each cruise, be furnished with a copy of the charter agreement, certified by the Port Authority, where a copy will be deposited.
6. Before each sail, the skipper is required to deposit with the local Port Authority a list with full data of the crew and the passengers, a certified (by the Port Authority) copy of which he must carry on board, together with all other documents of the vessel, throughout the cruise.

This is outdated information. For a number of years it has been legal for EU-flagged professional yachts to charter in Greek waters as long as they comply with Hellenic Registry requirements in addition to those required in the country of registration. On the charter agreement there is a place to enter flag of the vessel. There are other requirements I'm sure but a good charter lawyer can advise you how to do this.

Also it's no longer required to get the PP to certify your crew list prior to departure (this only changed recently) but you must carry a crew list on the yacht with the certified charter agreement and you must have no-one on board who is not listed on It.

The PP don't always keep up with charter legislation so some may still ask for it. We had to take a copy of the law up to our local office before they'd accept it.

The reason Sunsail use Greek flagged yachts, just as we do, is that it is much easier and more profitable to use Greek-flagged yachts for any serious business in Greece. Some foreigners run a small one-boat charter company more as a hobby and to fund a lifestyle they want, rather than as a business that will expand and employ people. There's absolutely nothing wrong with that if they are doing it legally, but what is appropriate for a bigger business may not be the best choice for them.

Anyone doing business in Greece in any way must be prepared for a lot of red tape. It's probably not quite as bad as France but the bureaucracy here is pretty formidable at times.