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Law 89 of 1/1.8.1967 – on the establishment of foreign Manufacturing Companies in
Greece

Law 89/1967 reads as follows:

Article 1

1.  Foreign companies may establish in Greece according to the provisions of this law, having as their exclusive object the provision of consulting services, central accounting support, manufacturing/product/operating/services quality control, drafting of design studies and contracts, advertising and marketing, processing of data, collection and provision of information, research and development services to their central offices or to their connected entities (within the meaning of law 2190/1920 on S.A. companies). The so established companies have the following obligations: a) within 12 months after the administrative decision mentioned in paragraph 2 below they must employ and keep employed at least 3 employees b) they must have annual expenses in the country of at least €100.000. […]

2.  In order to be subject to the provisions of the present law, a special permission issued by the Minister of Finance is required. Such permission is publicized in the Government Gazette and is issued after 50 days following the submission of an application by the company.

3. If violations of its terms or of this law are noted, the permit may be revoked by a similar decision. Before the revocation the administration must invite the company in writing to express also in writing its opinions in order to present its views regarding the violations that it is being accused of, within fifteen (15) days from the notification of the call.

Article 2

1. The gross income of the companies in article 1 resulting from their services must be collected through remittances. It is determined by adding a percentage of the profit to the total of the expenses, regardless the expense, and their depreciation minus the income tax (cost-plus method). The applied, to every company, percentage of profit, results from the application of the regulatory decision mentioned in the first paragraph of article 3 of this law. It is noted by the decision of the second paragraph of the mentioned article, after the review of the Commission, which is formatted by the specific Ministry and is constituted by the decision of the Minister.

The Committee consists of an Advisor or Legal Counselor of the State’s Legal Board who serves at the Ministry of Economy, as President of the Committee. Furthermore it consists of the Supervisors of the Income Tax Division and the Division of Foreign Capital of the same Ministry, as well as of an auditor. They are considered to be members of the Committee. The above percentage of profit is reexamined every five years or earlier in the case that the market’s conditions diverse significantly.

The compensations of the President, of the members, the Secretaries and the Rapporteurs of the Committee noted in this paragraph, are assigned by decisions of the Minister of Economy and they result from the credits provided in paragraph 18 of the article 7 of law 3299/2004 as amended. With the same decisions these amounts can be adjusted.

2. For the determination of the profit rates, which cannot be lower than five percent (5%), the company’s provided services are particularly taken into consideration, the branch of activity and the Instructions of O.E.C.D. for the chargers within clusters.

3. For the determination of the company’s taxable income, all the expenses on which the profit rate is calculated are deducted from its gross revenues, if they are supported by relevant documents which meet the requirements of the Code of Books and Records.

4. If for any reason the company’s revenues, as they result from the its books, are higher that the revenues determined by the method mention in the first paragraph, the revenues resulting from the books are the ones taken into consideration.

Article 3

1.    By the decision taken by the Minister of Economy the above are determined:

a)    The information that the application must include and the necessary documents for the inclusion of the companies in the provisions of the present law,

b)    The criteria of the article 2 par. 2 of this law are specialized,

c)    The bodies and the process of the control are designated, as well as the reasons for the revocation of their permits and

d)    The process and the necessary documents for the returning of the letters of credit, provided in the provisions of this law before their replacement, as well as any other necessary detail for the its enforcement.

2.    With the same decision, it is possible for other services of coordinating and subsidiary character, apart from the ones mentioned in article 1 of this law, to be designated and to be provided by companies covered by this law.

Article 4

In the provisions of the previous articles, resident companies are covered by this Law after filing relevant application, as long as they exclusively offer their services, mentioned in article 1 of this law, to foreign branches or to connected to them, non established in Greece, companies.

Article 5

All public services and authorities, as well as individuals must provide to the Division of Foreign Capital at the Ministry of Economy every information that may be asked for and every possible assistance for the smooth implementation of this law.

Article 6

By this law, which validity commences from its publication at the Government Gazette, the provisions of article 9 of law 4171/1961 «regarding the taking of general measures to assist the development of the country’s economy» are not affected, as well as the provisions of article 50 of law 2190/1920 «regarding the S.A. companies».