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Companies wishing to set up a new legal entity in Italy have three main options:

 

  • LIMITED LIABILITY COMPANY Società a responsabilità limitata (s.r.l.)

 

  • FOREIGN BRANCHAs opposed to the establishment of an Italian company, a branch is not a separate legal entity but a foreign “unit” of the mother company. Branches do not enjoy, as such, organizational and decision-making autonomy. For tax purposes, branches are considered as permanent establishments and are therefore subject to taxation in Italy. They shall thus keep their own books, submit VAT and income tax returns to tax authorities (Revenue Agency or Agenzia delle Entrate) each year, and file the annual report of the foreign company with the Italian Register of Companies.

 

  • REPRESENTATIVE OFFICE - A representative office is a  registered office of a foreign company that carries out in Italy, purely and exclusively, promotional and advertising activities, collection of information, scientific or market research. The representative office has only an auxiliary or preparatory function to facilitate the foreign company’s penetration in the Italian market. A representative office can open a bank account in Italy. It cannot carry on business activities (production, sales, or services), and its manager has no power to decide or to bind the foreign company.

 

LIMITED LIABILITY COMPANY

1) REGISTRATION OF DIRECTOR(S) AND/OR SHAREHOLDER(S) WITH ITALIAN TAX AUTHORITY (AGENZIA DELLE ENTRATE)

Foreigners can request their Italian fiscal code at their nearest Italian Embassy or Consulate.

 

2) EXECUTION OF THE ARTICLES OF ASSOCIATION WITH A PUBLIC NOTARY

The procedure must be executed in person in Italian language.

The shareholder only speaks his mother tongue or the notary only speaks Italian: the notary drafts the document in Italian; certified translator must attend and translate

The shareholder and the notary both speak English/other: the notary drafts he document both in Italian and English/other

The shareholder does not attend in person and grants a Power of Attorney to an Italian lawyer or professional who proceeds with the incorporation on his behalf: the document is drafted and signed in Italian and a courtesy copy is translated into the shareholder's language. The Power of Attorney (translated in Italian) must be notarized and apostilled by a notary from the shareholder's country.

 

3) ISSUANCE OF THE COMPANY VAT NUMBER

 

4) ISSUANCE OF THE CERTIFICATE OF INCORPORATION (VISURA) WITH THE LOCAL CHAMBER OF COMMERCE

 

5) OPENING OF THE BANK ACCOUNT

 

FOREIGN BRANCH

Under Italian law, a branch is not a separated legal entity but a foreign "unit" of the mother company. Accordingly, branches do not enjoy organisational and operational autonomy, but are subjected to taxation in Italy and to the same corporate disclosure requirements of companies with the Registar of Companies (i.e. filling of financial statements, significant corporate changes).

The establishment of a branch must be authorized with a special resolution by the mother company, indicating the Italian address and appointing a representative. The establishment deed must be executed with an Italian notary. This step can be carried out in person or through a power of attorney act (notarized and apostilled).

 

1) REGISTRATION OF THE BRANCH WITH THE ITALIAN REGISTRAR OF COMPANIES AT THE LOCAL CHAMBER OF COMMERCE

 

2) APPOINTMENT OF A BRANCH REPRESENTATIVE WITH THE REGISTER OF COMPANIES

She/he can be a foreign resident.

 

3) APPOINTMENT OF PERMANENT ADDRESS IN ITALY

It may be a virtual one as well.

 

4) ISSUANCE OF AN ITALIAN VAT NUMBER

REPRESENTATIVE OFFICE

Representative offices do not find a specific definition under Italian law and are therefore subjected to OECD Model Convention to contrast tax evasion and avoid double taxation. Representative offices are thus considered  a fixed place of business exclusively established to pursue marketing and promotional activities, and scientific and market research. The pursuit of commercial activities is not allowed under this type of entity. Representative offices are not subjected to taxation in Italy and are not required to keep financial books.

 

 

1) APPOINTMENT OF A BRANCH REPRESENTATIVE WITH THE REGISTRAR OF COMPANIES (SHE/HE CAN BE THE SAME DIRECTOR OF THE MOTHER COMPANY AND A FOREIGN RESIDENT)

 

2) APPOINTMENT OF PERMANENT ADDRESS IN ITALY

 

3) ISSUANCE OF A TAX IDENTIFICATION NUMBER FOR THE MOTHER COMPANY AND THE BRANCH REPRESENTATIVE

It can be requested at the nearest Italian Consulate or Embassy.