Corporate Restructuring

There are various reasons for restructuring a company: for tax reasons a change of legal form may be advisable, in the case of one company taking over another a merger may become necessary, and the merger of several companies can give rise to a new company. Spinning off part of a company can be useful in order to operate a business division as an independent “spin-off,” or in order to sell or otherwise contribute that part.

Unlike a few years ago, Greece has had, since Law 4601/2019 (“Εταιρικοί Μετασχηματισμοί” – the Corporate Transformations Act), a largely uniform set of rules for mergers, demergers, and changes of legal form, replacing the provisions that were previously scattered across numerous individual laws. The law now, in principle, also permits restructurings between companies of different legal forms (e.g. from a GmbH/EPE into a public limited company, or vice versa), thereby creating considerably more scope for structuring than under the earlier, fragmented law.

Under this framework, a legal entity may be restructured by change of legal form, merger, or demerger (split-up and spin-off). What all “genuine” restructurings have in common is that the business activity continues in the form of a new economic entity, and existing liabilities pass to that entity by way of universal succession – a matter of particular importance for the rights of existing creditors, employees, and shareholders. By contrast, there is the so-called “abusive restructuring,” for example through dissolution and liquidation of the old company followed by contribution of its assets to a newly formed company; this distinction can have significant consequences under company and tax law.

In connection with mergers or business combinations, competition-law issues may also arise, which can trigger a notification and reporting obligation to the competent competition authority. For the tax side of restructurings, the new, unified tax-neutrality regime under Law 5162/2024 has applied since the end of 2024 (see in more detail our article Tax Advantages of Corporate Restructuring), which also implements the EU Merger Directive into Greek law.