Business Acquisition in Greece – Complete FAQ Guide

Before a business acquisition takes place — and it can take many forms — the buyer needs to conduct a detailed legal, technical and financial review (due diligence) in which the business secrets of the target will be disclosed. A business acquisition can be structured in two fundamental ways: (a) by acquiring the assets of the business (asset deal) or (b) by acquiring equity control over the company that operates it (share deal). Only the first type simultaneously constitutes a transfer of business, resulting in a change in the legal entity acting as employer. The choice between the two has decisive consequences for tax planning, employment relations and liability for pre-existing debts of the business.
Read more: The Fate of Employment Relationships in a Business Transfer

In the context of a share acquisition of a limited liability company (SA), four are the key stages that take place. (1) Before the acquisition, the buyer conducts a detailed legal, technical and financial due diligence; the parties must first sign a confidentiality agreement before any business secrets are disclosed. (2) The MOU is the document in which the parties record the points on which agreement has already been reached and those on which negotiations continue — its binding force is notoriously variable. (3) The due diligence takes 1-6 months and its results determine the price and the contractual terms of the SPA. (4) The final stage is the execution and signing of the share purchase agreement (SPA), followed by the share transfer agreement (closing). If we think of an acquisition as a marriage, then the MOU is the engagement, the signing of the contract is the marriage proposal, and closing is the wedding ceremony itself.
Read more: Advisory Services in the Context of a EUR 36 Million Share Acquisition

A confidentiality clause is the agreement between the prospective buyer and seller not to disclose business secrets to third parties; it is typically entered into at the stage preceding the due diligence review of the target company. Its purpose is to prevent disclosure of business secrets to third parties and to prohibit the prospective buyer from using those secrets for any purpose other than the acquisition. The clause defines which information is protected as confidential, which persons have access to it, the duration of the obligation, and to which third-party advisers of the prospective buyer further disclosure of the secrets is permitted, etc. If the parties have not entered into this clause, the statutory protection — in particular Articles 22a to 22k of Law 1733/1987 and Law 146/1914 — cannot operate satisfactorily, especially as regards the sanction for breach.
Read more: Confidentiality Clauses NDA/CA in Business Acquisitions

Under recently adopted legislation, a “trade secret” means information that cumulatively satisfies the following conditions: (a) it is secret, in the sense that it is not generally known or readily accessible to persons who normally deal with such information; (b) it has commercial value by reason of its secret character; and (c) the person who has lawfully acquired control of it has taken reasonable steps to protect its secrecy (see Article 22a of Law 1733/1987 as amended by Law 4605/2019). Examples of critical such secrets include: client lists, employee remuneration data, sales information and particular strategies, information about distribution or supplier networks, business plans, product pricing and costing information, marketing information, etc.
Read more: Confidentiality Clauses NDA/CA in Business Acquisitions

In almost all confidentiality agreements the parties agree in advance on a specific penalty clause amount as the sanction for each breach; this amount will naturally be linked to the subject-matter of the transaction (for example, a Greek court awarded the full agreed penalty of EUR 2.5 million in connection with a related exclusivity clause). Following the transposition of the relevant EU Directive in 2019 (through Law 4605/2019), breach of a confidentiality clause constitutes a civil wrong, with the consequence that the defaulting party may also be sentenced to personal detention — a particularly significant sanction because it engages personal liberty. However, confidentiality agreements typically operate as a deterrent — as a “threatening” tool for the prospective buyer. In practice, judicial enforcement in the event of a breach is difficult, particularly as regards the compensation claim.
Read more: Confidentiality Clauses NDA/CA in Business Acquisitions

An “MOU” (Memorandum of Understanding) is a document signed by the prospective acquisition parties that confirms their intention to complete the transaction and serves as a roadmap towards the final agreement that will follow. It records the key terms of the agreement as identified at that point in the negotiations: for example, the price, the payment method, the timing for execution of the definitive contract, confidentiality/exclusivity terms and many others. It has been described as a “chameleon” document: sometimes it constitutes a mere “gentlemen’s agreement” without legal binding force; at other times it can perfectly well bind the parties with serious consequences for non-compliance. A striking example is judgment no. 14837/1989 of the Athens Court of First Instance, where — even though the parties had agreed that a definitive agreement reflecting the already agreed terms would be signed shortly — the court held that the MOU was fully binding without awaiting the signing of the final contract.
Read more: MOU — Memorandum of Understanding: The Road to Business Acquisition

The due diligence (DD) is one of the most important stages of the entire process. It is where the prospective buyer learns in detail what it intends to acquire, discovers potential problems, defects and weaknesses, etc. The DD typically follows the signing of the MOU and lasts, in most cases, from 1 to 6 months, depending on the volume of data and the size of the team conducting it. The DD covers primarily: (a) corporate documents (formation, representation and management), (b) affiliated companies, (c) client base, (d) branches, (e) litigation and potential disputes, (f) changes in share capital, (g) asset position (real estate, equipment, cash), (h) intellectual property rights, (i) credit agreements, (j) security interests (pledges, pre-registrations, mortgages), (k) tax and social security compliance, (l) contracts, and (m) employment relations, etc.
Read more: Due Diligence in Business Acquisitions

The results of the DD are important for two reasons. First, they largely determine the price: if problems are identified during the review, the proposed price may be reduced or made subject to conditions. This is illustrated by judgment no. 493/2021 of the Athens Court of Appeal (Qualex): “For this reason, in order to determine the purchase price for the shares, the parties carried out a pre-contractual financial due diligence so as to ascertain the financial condition of the business they were to acquire.” Second, the DD shapes the contractual terms of the SPA, as the buyer’s concerns arising from the DD findings are translated into efforts to shift risks onto the seller through contractual provisions. Moreover, the buyer’s pre-signing awareness of potential defects ultimately results in the seller’s release from liability in respect of those defects (see Civil Code Article 539).
Read more: Due Diligence in Business Acquisitions

To manage the seller’s release from liability arising from the buyer’s DD knowledge, the seller typically delivers to the buyer a Disclosure Letter listing all documents that have been disclosed, or the parties agree that all documents uploaded to the Virtual Data Room are deemed known to the buyer. However, it is possible to agree that the DD is entirely irrelevant to the seller’s liability — i.e., even if the buyer became aware through the DD of certain defects in the business, the seller remains fully liable because it warranted a defect-free business (the “pro-sandbagging” clause). This clause protects the buyer against, for example, last-minute document disclosures for which there is no time to process, or against the inability to assess the implications of certain issues within the agreed commercial structure.
Read more: Due Diligence in Business Acquisitions

The final stage of any acquisition is the execution and signing of the share purchase agreement (SPA), followed by the share transfer agreement (closing). The ultimate purpose of the DD is to give the buyer the best possible picture of the material and serious problems that may arise, and to assist both in setting the sale price and in allocating liability between the parties when the time comes to execute the acquisition agreement. Breach of the principle of good-faith negotiation (Articles 197 and 198 of the Civil Code) is likely to give rise to a liability to pay damages to the other party — and this applies even during the negotiations, before any definitive contract is signed.
Read more: MOU — Memorandum of Understanding: The Road to Business Acquisition

A business transfer automatically transfers employment relationships between the employees and the new operator/employer. The new employer, from the date of transfer, steps into the position of the previous employer as regards the rights and obligations arising from the employment relationship. Upon the transfer, the transferor is in no circumstances released from obligations arising from the employment contract up to the time of transfer; on the contrary, the transferor remains jointly and severally liable for those obligations with the successor. Presidential Decree 178/2002 explicitly provides (Article 5(1)) that dismissal is prohibited and, if effected, is void when it occurs solely because of the transfer. Dismissals aimed at more rational business organisation and restructuring are permitted, even when taken to improve the prospects of a sale (AP 226/2011).
Read more: The Fate of Employment Relationships in a Business Transfer

By contrast, changes in the identity of the partners of a general/limited partnership or changes in the shareholders of a capital company do not constitute a change in the operating entity. In both cases the legal entity holding the employer status vis-a-vis the employee does not change (AP 647/2003). Different treatment applies in the case of an acquisition by transfer of a controlling shareholding, because when the ownership structure of a company changes through a share transfer, there is no change in the legal personality of the employing entity (the same legal entity persists) and the existence of employment contracts is unaffected by that change. Because of the mandatory nature of the relevant provisions, even a sham termination by mutual agreement between the transferor and an employee followed simultaneously by entry into a new contract with the new operator on different (usually less favourable) terms is void as a circumvention of the law (AP 838/2023).
Read more: The Fate of Employment Relationships in a Business Transfer

Under Article 42 of the ITC, any income arising from the capital gain on the transfer of securities — e.g., shares, units or participations in partnerships, limited liability companies, private companies, civil associations and civil partnerships, participations in joint ventures, bonds and derivative financial instruments — is subject to personal income tax insofar as it does not constitute business activity. The capital gain is taxed at a rate of 15%, as provided in Article 43 of the ITC. The tax is calculated on the difference between the sale price and the acquisition cost of the security. If the capital gain is negative — i.e., a loss arises — that loss may be carried forward for the next five years and may only be offset against future capital gains from transfers of securities.
Read more: Capital Gains Tax on the Transfer of Securities

For legal entities, income from the transfer of securities is treated as income from business activity and is taxed in accordance with Article 58 of the ITC at a rate of 22%. However, Article 48A of the ITC, added by Article 20 of Law 4646/2019, provides a capital gains tax exemption subject to specific conditions, with the aim of promoting investment and facilitating corporate restructurings. In particular, the transferring legal entity must hold at least 10% of the value or number of shares, participations or voting rights of the entity whose securities are being transferred, and that minimum participation must be held for at least 24 months. This exemption makes Article 48A ITC the central tax planning tool in intra-group restructurings involving Greek entities.
Read more: Capital Gains Tax on the Transfer of Securities

Law 4601/2019 provides for three basic categories of transformation: merger, demerger and conversion. A merger is the process by which one existing or newly-formed company acquires the assets and liabilities of other companies, which are dissolved without a winding-up stage. A demerger is the process by which the assets and liabilities of a company — which is dissolved without winding-up — are transferred to at least two existing or newly-formed companies. Importantly, a transformation cannot be annulled on the ground that the exchange ratio of company participations is not fair and reasonable: a shareholder who finds himself with shares of substantially lower value after the transformation cannot seek annulment, only compensation for the loss sustained. Creditors may request adequate security within 30 days of publication of the transformation plan in the General Commercial Registry (GEMI).
Read more: The New Legal Framework for Corporate Transformations (L. 4601/2019)

As expressly provided in Article 50 of Law 5162/2024: “The capital gain arising from a merger, demerger or conversion does not give rise to a tax liability for the receiving company or, in the case of a conversion, for the company in its new legal form.” This is the Roll-over or Carry-over mechanism, under which the balance sheet items of the transforming companies remain unchanged for tax purposes after the transformation. The mechanism operates as a deferral of taxation: the capital gain will be taxed in the future when a taxable event occurs. A taxable event is constituted, for example, by the receiving company transferring the contributed asset to a third party. The mechanism was confirmed and elaborated by Circular E.2088/2025.
Read more: The Tax Framework for Corporate Transformations after Law 5162/2024

Article 479 of the Civil Code (AK) provides that: “If property or a business has been transferred by contract, the acquirer is liable to the creditor up to the value of the transferred assets for the debts belonging to the property or the business. The liability of the transferor continues to exist.” The application of this provision was confirmed by judgment no. 93/2020 of the Athens Court of Appeal, which upheld a claim against a company to which the client base of the debtor company had been transferred: “It was established that a transfer of the client base of the company took place […] — being the most important element of that specific business that had ceased to operate — to the defendant, so that the transfer of it to the defendant also constituted a transfer of its business.” Article 479 AK therefore applies even where only a single critical element — such as the client base — was transferred, and not the entirety of the business.
Read more: Athens Court of Appeal Judgment on Liability from Business Transfer (EfAth 93/2020)