The Greek Limited Partnership (EE)

The Limited Partnership – Ετερόρρυθμη Εταιρεία (E.E.) – is not the structure most foreign clients ask about first. But in certain situations, it offers something the IKE and SA cannot: single-layer taxation on profits, with no dividend tax on distributions.

That advantage alone makes it worth understanding – with the important caveat that it only applies under specific conditions.

HOW IT WORKS

An E.E. has two types of partners:

General partners manage the business and bear unlimited personal liability for its obligations. Their personal assets are exposed if the partnership cannot cover its debts. At least one general partner is required.
Limited partners are passive investors. Their liability is capped at the amount of their capital contribution. They do not participate in management – and if they do, they risk losing their limited liability protection entirely.
This structure creates a natural division: one side runs the business and accepts the risk; the other contributes capital and stays out of day-to-day operations.

THE TAX ADVANTAGE – AND ITS LIMITS

This is what makes the E.E. distinctive:

If the partnership maintains single-entry books (the simplified accounting regime available to smaller businesses), profits are taxed once at the corporate level – 22% – and distributions to partners are not subject to any further tax. No 5% dividend withholding. No additional income tax at partner level. One layer of taxation, full stop. This is a meaningful difference compared to an IKE or SA, where distributed profits are taxed at 22% plus an additional 5% on dividends.
However, if the partnership’s annual revenue exceeds €1,500,000 for two consecutive years, it must transition to double-entry bookkeeping from the third year onward. Once on double-entry books, the E.E. loses this advantage: distributions become subject to the standard 5% withholding tax, putting it on the same footing as an IKE.

In other words, the tax benefit is real – but it’s tied to staying below the revenue threshold and maintaining single-entry books. For businesses that expect to remain under that ceiling, this is one of the most tax-efficient structures available in Greece. For businesses that expect to outgrow it, the advantage is temporary.

FORMATION AND ACCOUNTING

Formation follows a similar path to other Greek entities. Most E.E.s are now incorporated electronically through the GEMI portal, without notarial involvement unless real estate or other assets requiring formal transfer are contributed. The partnership agreement must specify who the general and limited partners are, their capital contributions, profit-sharing arrangements, and management structure.

Single-entry bookkeeping – the default for E.E.s below the revenue threshold – is significantly simpler and cheaper to maintain than double-entry. This reduces accounting costs and administrative overhead, which is a practical advantage for smaller operations.

WHEN IT MAKES SENSE

The E.E. is not for everyone. The general partner’s unlimited liability is a serious consideration, and the structure’s governance is less flexible than the IKE’s. But it can be the right choice in specific circumstances: where the tax efficiency of single-layer taxation matters and the business is expected to stay below the double-entry threshold, where a clear separation between an active managing partner and passive investors is desired, or in family or small-group arrangements where one party manages and others contribute capital without operational involvement.

It is also worth noting that the E.E. is a well-established structure in Greece – banks, suppliers, and counterparties are entirely familiar with it.

WHAT WE ADVISE

The choice between an E.E., an IKE, and other structures depends on your specific situation – your expected revenue, your appetite for personal liability, the number and roles of your partners, and your tax position both in Greece and abroad. We help foreign clients evaluate whether the E.E.’s tax advantage justifies the trade-off of unlimited liability for the general partner, and whether the revenue threshold makes it a sustainable choice for their business.

Contact us to discuss which structure fits your plans. We’ll give you an honest comparison – not a default recommendation.