An Italian branch/secondary registered office may be a representative of the foreign company’s core business including a permanent establishment in Italy with decision-making powers. This should be distinguished from the setting up of a completely new company used by the foreign party to conduct its business in Italy indirectly (which can be a subsidiary, “filiale” in Italian, of an existing foreign company), and secondly, from the conduct of a business in Italy without a permanent establishment as described above.

The Italian branch office is not a separate legal entity and the parent company is responsible for its initiatives.

Details of the branch office must be registered with the Business Register (Registro delle Imprese). The registration of a branch office is governed by the Italian civil code (Codice Civile).

The foreign entity first needs to appoint a legal representative.

The deed of appointment, the certificate of incorporation (memorandum of association), the articles of association and the registration details of the foreign company must be registered with the Business Register in the area in which the branch office is located. Where foreign companies have more than one branch office in Italy, the publication requirements involving the filing of the above-mentioned documents only need to be satisfied for the first Italian branch.

All documentation must have been issued by a public authority with sworn translation into Italian. These documents must be filed with an Italian Notary (or with a District Notarial Archive). The notary will draft a specific notarial deed with the documents listed above as annexes, to be registered by the Notary and filed with the Business Register.

If the branch office is not registered in this way, directors or anyone acting in the name and on behalf of the company will have unlimited liability for all company contractual obligations.

The foreign company and its directors will be liable for company obligations contracted in Italy in its name (except for European companies given that European principles of freedom of establishment apply).

Tax issues

The overall income of a permanent establishment in Italy of a company residing abroad is determined according to the rules governing the determination of the company income, as if it were a company domiciled in Italy.