Opening a foreign branch in Italy: complete guide

Introduction

Opening a foreign branch in Italy 📈 is a strategic choice for international companies that want to expand into the European market. This procedure allows a foreign parent company 🌍 to establish a legal presence in Italy while keeping a direct link with the headquarters.

In this complete guide, we’ll explore legal requirements, practical procedures, costs, tax benefits, and the differences between a branch, a subsidiary, and a secondary office. We’ll also highlight common mistakes ❌ and provide practical lifehacks 💡 to speed up the process.

What is a foreign branch in Italy?

A branch is an extension of a foreign company that operates permanently in Italy. It is not an independent legal entity ⚖️ but must be registered with the Italian Companies Register and appoint a legal representative in Italy.

📌 Key features:

• Directly dependent on the parent company.
• Can sign contracts, hire employees 👩‍💼👨‍💼, and open bank accounts.
• Has its own tax code and VAT number.
• Must comply with Italian law and tax obligations.

Branch, subsidiary, and secondary office: the differences

These terms are often confused, but Italian law assigns them precise meanings:

• Branch 🏢: local unit with operational autonomy but still dependent on the parent company.
• Subsidiary 🔗: an independent Italian company owned by the foreign parent.
• Secondary office 📍: the official term used for registering a foreign company’s presence in Italy, essentially equivalent to a branch.

Legal requirements

To set up a branch in Italy, you need:

1. Resolution of the parent company approving the opening of the branch.
2. Notarial deed in Italy 📜 certifying the incorporation.
3. Sworn translation and legalization of the parent company’s documents (articles of association, certificate of incorporation, company register extract).
4. Italian tax code and VAT number.
5. Registration with the Companies Register at the competent Chamber of Commerce.

Step-by-step procedure

1. Prepare the parent company’s documents 🌐.
2. Translate and legalize them (apostille if applicable).
3. Draft the notarial deed before an Italian notary.
4. Obtain tax code and VAT number from the Revenue Agency.
5. Register the branch with the Companies Register.
6. Open a business bank account in Italy 💳.
7. Appoint a legal representative resident in Italy.

⏳ Average timeframe: 4 to 8 weeks.

Costs of setting up a branch

The total costs vary depending on complexity:

• Notarial fees: €1,200–2,000.
• Translations and legalizations: €500–1,000.
• Chamber of Commerce fees: €200–400.
• Legal/accounting assistance: starting from €2,000.

👉 Average total: €3,500–6,000.

Advantages of a branch in Italy

• Direct access to the European market 🌍.
• Possibility to hire local staff.
• Improved reliability with clients and partners.
• Access to Italian banking and financial system 💶.
• Transparent and well-defined tax regime.

Tax and accounting obligations

The branch must:

• Keep separate accounting records 📚.
• File an annual tax return in Italy.
• Pay VAT and social security contributions.
• Comply with labor and safety regulations.

⚖️ Taxation applies only to income generated in Italy, not to that of the foreign parent company.

Useful lifehacks 💡

• Choose a trustworthy legal representative: they must reside in Italy.
• Pick a strategic city: Milan for finance, Rome for institutions, Bologna for industry.
• Prepare sworn translations in advance: they often delay the process.
• Check for regional incentives: some Italian regions offer tax benefits for foreign investors.

Common mistakes to avoid ❌

• Confusing a branch with a subsidiary (the latter is an autonomous Italian company).
• Missing deadlines for filing documents.
• Underestimating translation and notarial costs.
• Failing to appoint a resident legal representative.
• Assuming the branch is exempt from Italian taxes 🚫.

Conclusion

Setting up a foreign branch in Italy is a complex but strategic operation for companies aiming at long-term presence in the European market 🌐. Knowing the procedures, costs, and benefits helps avoid mistakes and saves valuable time.

With the right legal and tax assistance 👩‍⚖️👨‍⚖️, opening a branch becomes a safe and advantageous step, turning an international project into a solid Italian business reality.