Businesses & Expansion

Branch or New Company: What Suits Your Expansion

Published 9 October 2026 · 7 min read · NS Accounting & Tax Office

Written by the NSTAX team of accountants and tax advisers

Branch or new company business expansion - NSTAX accounting firm Athens

When a business is doing well and is considering opening a second shop, an office in another city or a new activity, a key question arises: do I open a branch of the existing company or set up an entirely new company? In this article NSTAX explains the difference, the advantages and disadvantages of each option, and when each one fits.

What a Branch Is

A branch is a secondary establishment of the same legal entity, without its own separate legal personality. It operates under the same tax number (AFM) as the parent business, with a separate sub-code, and at year end its financial results are consolidated into a single tax return for the entire business.

What a New Company Means

Setting up a new company creates an entirely separate legal entity, with its own tax number, its own books, its own tax return and its own liability. Even if both companies belong to the same owner, they are treated as completely different entities for tax and legal purposes.

Procedure and Cost of Setting Up a Branch

For an IKE or EPE, opening a branch requires an extraordinary meeting of the partners and checking whether the articles of association allow it — if not, the articles must be amended. The amended articles are published in GEMI and the procedure must be completed within 30 calendar days of registration, otherwise a fine is imposed. No transaction (sale or purchase) may be carried out by the branch before this 30-day procedure is completed. The business must also be tax, social security and treasury compliant.

Procedure and Cost of Setting Up a New Company

A new company is set up electronically through the One-Stop Shop (e-YMS), where the founder chooses a legal form, reserves a name and trade name, completes the model articles of association and, once accepted by all members, GEMI, tax number and e-EFKA registration are issued automatically, usually within a few days. Unlike a branch, a new company needs its own complete accounting and tax organisation from scratch.

For choosing a legal form see our guide to IKE, OE, EE or sole trader, and for the first steps our guide to tax obligations of a new business.

Advantages and Disadvantages of a Branch

Advantages

Less initial red tape, as no new legal entity is required
A single tax return and accounting picture for the whole business
Ability to offset profits and losses between the head office and the branch within the same return

Disadvantages

Liability remains unified: any problems or debts of the branch affect the whole business
Less flexibility if you later want to sell or spin off the new activity separately
Harder to assess the profitability of the new activity separately without internal, informal accounting separation

Advantages and Disadvantages of a New Company

Advantages

Clear separation of liability: problems of the new company do not directly affect the existing one
A clean, independent picture of the new activity’s profitability
Greater flexibility for a future sale, investor entry or independent growth of the new activity

Disadvantages

Full cost and red tape of a new incorporation, with separate books and returns
No direct offsetting of the new company’s losses against the existing company’s profits
Double accounting cost, since each company needs its own complete accounting organisation

An Example: Expanding a Retail Shop to a Second City

Suppose an IKE with a clothing shop in Athens plans to open a second shop in Thessaloniki. If the activity is essentially the same, with the same owner and low business risk, a branch is usually simpler: the business avoids double red tape and can offset any initial losses of the new shop against the profits of the existing one within the same tax return.

If instead the business plans to bring in a new investor solely for the Thessaloniki shop, or wants to isolate the risk in case the new market does not perform, setting up a separate company makes more sense despite the extra cost and red tape, precisely because it isolates liability and facilitates a future independent sale or partnership.

4 Questions to Help You Decide

Is the new activity essentially the same as the existing one, or something different that would warrant a separate identity?
How important is it to isolate the business risk of the new activity from the existing one?
Do you plan in future to sell, partner with an investor or spin off the new activity separately?
Can you bear the double accounting cost of an entirely new company, or do you prefer a simpler structure?

Frequently Asked Questions

Does a branch need a new tax number?

No. A branch operates with a sub-code under the same tax number as the parent business, while a new company obtains its own tax number.

Can I offset losses of a new activity against the profits of the existing business?

Through a branch, yes, as results are consolidated into a single tax return. With a separate company, direct offsetting is not possible, as they are different legal entities.

How long does setting up a branch take for an IKE?

An extraordinary partners’ meeting, a possible amendment of the articles of association and publication in GEMI are required, and no transaction may take place before 30 calendar days have passed from registration.

What if my company’s articles of association do not allow a branch?

In that case the articles must be amended before setting up the branch, which adds an extra step and time to the procedure.

Which option is more tax-efficient?

There is no single general answer; it depends on the expected result of the new activity (profit or initial loss), the business risk and your future goals, which is why an individual assessment is needed.

Planning to Expand Your Business?

NSTAX, an accounting and tax advisory firm in Athens, assesses your business’s data and guides you to the right choice between a branch and a new company. Contact us for a personalised analysis.

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