The branch in Italy of a foreign company
The "filiale" or "sede secondaria" of company
How to set up a secondary seat in Italy
(it is a permanent tax establishment)
The branch of a foreign company is a distinct unit of the company, notwithstanding it is not legally an autonomous entity.
The branch benefits of decision making authority and organizational autonomy which is delegated from the mother company.
By a branch in Italy a foreign company can operate in Italy with a more cost-effective tool instead of a subsidiary.
By a branch the foreign company can perform in Italy the same business as abroad (on the contrary this is not possible by a representative office of foreign company which cannot perform any production or sale activity, but just public relations ones).
The law governing the branch in Italy of a foreign company is art. 2508 of the civil code, it provides that the branch has to publish the surname, name, date and place of birth of the persons who permanently represent the foreign branch in Italy, jointly with indication of their powers.
The technical name of a branch in Italy is “unità locale” ruled by Art. 10, paragraph 2 of DPR 581/1995.
The foreign company often appoints a local manager (called institore) to conduct the branch.
The branch is a permanent establishment under tax purposes, it has:
- to keep accountancy books;
- declare income tax and VAT to tax authorities;
- file the annual report with the relevant Chamber of Commerce.
The director (Italian o foreign too) and legal representative of the branch (or institore) has to get the release of the Codice Fiscale (tax ID code) from Agenzia delle Entrare (Italian tax authority) or from Italian consulate abroad if he is a foreign not resident in Italy.
The documents have to be submitted for registration at Company Register or at Repertorio Economico Amministrativo by Single Notification (Comunicazione Unica) transmission are as follows:
- copy of the Memorandum and Articles of Association of the foreign company;
these documents must be authenticated by a public notary abroad in the state where the foreign mother company has been registered;
these documents must be also legalized by the Italian consulate, or apostilled, and translated into Italian by a sworn translator;
- original certificate of registration (not a copy) issued by chamber of commerce or ministry or tribunal abroad where the mother company has been registered;
this certificate points out who is the foreign company’s legal representative;
it must be also translated in Italian and authenticated by the Italian consulate or embassy;
- copy of the document which contains the declaration of the foreign company to open the branch in Italy; this document shall be authenticated by a notary, translated and apostilled in the state of the mother company, it shall also be filed by an Italian notary, it also include:
the address of the branch;
the person designated as director;
the management and representation powers entrusted to such designated person.
After registration has been done, the Agenzia delle Entrate (the Tax Authority) will release to the branch its own tax ID code (codice fiscale) and VAT code (partita IVA).
Transfer of foreign companies to Italy
Italian laws apply also to foreign companies if they establish in Italy their administrative headquarters or carry out their main business in Italy; they will have to:
- register with the Italian Companies Register and
- adopt a statute compatible with Italian company law.
Until such fulfillments has been completed, for the non EU foreign company, the person who acted in his name and behalf will be personally responsible and without limit.
The Article 16 of the implementing provisions of the Italian Civil Code requiring the check of the condition of treatment reciprocity will apply to non EU foreign companies.
The Article 101-quater of the implementing provisions of the Italian Civil Code provides that if companies incorporated in EU countries have multiple secondary offices in Italy, the duty of registration for public advertising (mandatory for all companies) may be carried out by registration in the Companies Register (which is held at Italian Chamber of Commerce in each province) of one of these secondary seats and depositing in others Companies Register (of the others provinces) only the attestation of having implemented the first registration.
The third paragraph of Article 25 of Law 218/1995 (the Italian International Private Law) provides that in the case of the transfer in Italy of the legal seat of a foreign company, the transfer is valid if it has been validly registered also in the country of origin.