How do I open a branch in Italy?
Foreign companies wishing to carry on business in Italy by means of a permanent establishment may decide to open a Branch distinct from the representative office because it is organised on a permanent basis.
In order to establish a branch in Italy, the competent body of the foreign parent company (shareholders’ meeting, board of directors, sole director’s resolution, depending on what is provided for in the articles of association) must make a special resolution with the purpose of opening the branch.
The resolution must contain the following:
- the will to establish the branch;
- the designation of the head office of the Italian branch;
- the appointment of one or more officers;
- the economic resources of the branch (optional).
The resolution must be signed, notarized and apostilled (when due) in the Country where the decision was taken.
The foreign parent company must also provide a copy of the company’s articles of association and a certificate of good standing at the same time as the resolution.
The latter documents, in addition to being legalised and apostilled (when required), must also be translated and legalised in Italy.
The officer appointed to manage the branch may attend the deed of incorporation directly or alternatively grant a power of attorney to a trusted professional in order to execute the deed before the notary.
Preliminary activities before opening a branch in Italy.
The Italian notary, at the time of the deed, will check the regularity of the documentation.
Prior to the notarial deed establishing the Branch, the person in charge appointed by the foreign parent company must request a personal tax code from the Italian Revenue Agency.
The person in charge will also have to request a VAT number attribution certificate, generally with the help of an accountant, which will, in any case, be necessary for all tax and accounting fulfilments.
The Italian branch will also have a PEC (certified electronic mail) when it is set up.
What is the advantage of a foreign branch?
Setting up a branch rather than a subsidiary is strictly a business choice rather than a purely legal one.
From a legal point of view, the branch acts as if it were directly the foreign parent company present on Italian territory.
All liability, therefore, falls directly on the parent company for the acts performed by the branch in Italy.
From a business point of view, the choice is strategic if the foreign company wishes to maintain and carry out its activity in a foreign country with its own brand and organisation.
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