First of all, it must be emphasized that, in accordance with Art. 917/1986 of the Decree of the President of the Republic, a representative office is a permanent establishment of a foreign company in Italy that performs only promotional functions, scientific or marketing research or other data collection activities, and for this reason it is not subject to taxation and is fully subject to the prohibition of double taxation, since it does not receive any income. In fact, the representative office only plays a supporting or preparatory role for the foreign company to enter the Italian market, therefore it cannot engage in industrial or commercial activities.
A representative office must be present on site to promote the company and its products/services and other non-commercial activities, although a local branch does not require a permanent representative office as it does not have legal representation to third parties. As already noted, the representative office must be registered in the competent Register of Enterprises in the Economic and Administrative List of Enterprises.
The decision to open a representative office must be taken at an extraordinary meeting of the management body of the foreign company (if it has the authority, otherwise the decision must be made by the meeting of founders), which is competent in accordance with the laws of the country in which the foreign company is located.
In the decision making process, the company will have to appoint a representative, not necessarily resident in Italy, who will then be registered in the Economic and Administrative List of Enterprises, must have an address in Italy (we can offer a lease of a legal address), and who will be able to apply for permission for stay. Of course, before registering with the Chamber of Commerce, both the representative and the representative must obtain a tax code from the Italian Taxation Agency.
To open a representative office in Italy, you must provide the following documents:
- A detailed description of the activities carried out by the company on the territory of the state in which it is located, on the letterhead of the company;
- An extract (or similar document) from the company that intends to open a representative office in Italy, including the articles of association and the names of the founders and directors;
- A decision taken at an extraordinary meeting of the Board of Directors (CEO) to open a representative office in Italy, indicating the address of the representative office, as well as appointing a representative;
- A copy of the passport of the representative of the Italian mission.
All of the above documents must be notarized and apostilled.
All of the above documents (including the company's articles of association) must be translated into Italian and the translation must be certified by a sworn translator or a translator accredited by the Italian Consulate in Russia.
For tax purposes, a representative office is not considered a "permanent establishment" of a foreign company and is therefore not subject to any tax in Italy. Accordingly, representative offices are not required to maintain accounting records, publish financial statements or file tax or VAT returns. However, they are required to keep regular records to document the expenses (ie personnel, equipment, etc.) that will be covered by the foreign company.
As already mentioned, a representative office cannot carry out activities related to production or trade, but a representative office is allowed that does not perform exclusively representative functions, but can carry out additional activities in relation to third parties, however, related to agreements between the representative office and the parent foreign company. For tax purposes, such a representative office that does not perform exclusively representative functions is considered a permanent establishment of a foreign company and, as such, is subject to taxation.
Therefore, in addition to registering in the Economic and Administrative List of Enterprises and having a tax code, the representative office will also have to obtain a VAT account number from the competent Italian Taxation Agency.
The request must be made by a legal representative of a foreign company holding an Italian tax code (or an Italian lawyer authorized by special power of attorney) via a single message. After registration in the Economic and Administrative List of Enterprises, the Agency for Taxes and Duties will provide a representative office that does not perform exclusively the functions of a representative office with a special taxpayer code.
Unlike a simple representative office, a representative office that does not solely perform the functions of a representative office will be required to maintain separate accounting records, file VAT returns, file annual tax returns and file financial statements of the foreign company with the competent chamber of commerce.
The designated representative will be able to make a request for a residence permit. P. 1, Art. 27 of the Immigration Code states that “the regulation establishing the application of the law regulates specific procedures for the issuance of work permits, entry visas and residence permits for employees for each of the following categories of foreign workers:
a) managers or highly specialized personnel of companies with headquarters or branches in Italy or representative offices of foreign companies that have their head office in the territory of a Member State of the World Trade Organization, or heads of Italian companies or companies of another Member State of the European Union with headquarters in Italy” . The legal rule in this case refers to the temporary transfer of executives or highly specialized specialists of companies that have their head offices or branches in Italy, or at least representative offices (in this case, the foreign company must have its head office in another member state of the World Trade Organization ), who can be employed either for hire or under a self-employment contract.
In this case, we are talking about managers or employees with special knowledge who, in accordance with the applicable contract, qualify their activities as highly specialized and who must have at least six months experience in this industry. The duration of employment in the representation must be determined and commensurate with the actual needs of the company, and in any case, temporary transfer, also subject to any extensions, may not exceed a total duration of five years. The prerequisite for the issuance of a self-employment visa under Article 27, paragraph a) of the Immigration Code is a professional services contract that the worker enters into with a separate unit, previously approved by the Territorial Labor Office,
In order to obtain a visa at the Italian Consulate, a foreign worker must also attach a certificate of no impediment obtained from the Questura, all documentation sufficient to demonstrate certain professional skills and at least six months of work experience in the industry in which he will work (see art. 40, paragraph 22 of the Regulations establishing the procedure for applying the law; section 1 - entry visas to the territory of the state - paragraph d) categories and types of visas - visa for self-employment). In case the representative is an employee, he will have to apply for the so-called Blue Card.
Representative offices of foreign companies in Italy, which are not independent legal entities, have two distinctive characteristics:
• local presence to promote the interests of the company and its products/services and to conduct other non-business activities;
• the local branch is not a permanent establishment (it does not represent the interests of the foreign company in relations with third parties).
The local branch must register with the Register of Economic and Administrative Organizations (REA, Repertorio Economico Amministrativo) at the Chamber of Commerce, based on the following documents: •
if the company is registered in an EU country: a certificate containing basic information about the company and its legal representatives issued by a foreign authority, equivalent to the Italian Register of Legal Entities;
• if the company is registered outside the EU: certificate of existence of the company, issued by the Italian embassy in the country in which the legal address of such a company belongs.
All documents in foreign languages must be translated into Italian by a certified translator.
For a free consultation on legal support for opening a representative office and obtaining a residence permit in Italy on this basis, you can contact us.
A representative office must be present on site to promote the company and its products/services and other non-commercial activities, although a local branch does not require a permanent representative office as it does not have legal representation to third parties. As already noted, the representative office must be registered in the competent Register of Enterprises in the Economic and Administrative List of Enterprises.
The decision to open a representative office must be taken at an extraordinary meeting of the management body of the foreign company (if it has the authority, otherwise the decision must be made by the meeting of founders), which is competent in accordance with the laws of the country in which the foreign company is located.
In the decision making process, the company will have to appoint a representative, not necessarily resident in Italy, who will then be registered in the Economic and Administrative List of Enterprises, must have an address in Italy (we can offer a lease of a legal address), and who will be able to apply for permission for stay. Of course, before registering with the Chamber of Commerce, both the representative and the representative must obtain a tax code from the Italian Taxation Agency.
To open a representative office in Italy, you must provide the following documents:
- A detailed description of the activities carried out by the company on the territory of the state in which it is located, on the letterhead of the company;
- An extract (or similar document) from the company that intends to open a representative office in Italy, including the articles of association and the names of the founders and directors;
- A decision taken at an extraordinary meeting of the Board of Directors (CEO) to open a representative office in Italy, indicating the address of the representative office, as well as appointing a representative;
- A copy of the passport of the representative of the Italian mission.
All of the above documents must be notarized and apostilled.
All of the above documents (including the company's articles of association) must be translated into Italian and the translation must be certified by a sworn translator or a translator accredited by the Italian Consulate in Russia.
For tax purposes, a representative office is not considered a "permanent establishment" of a foreign company and is therefore not subject to any tax in Italy. Accordingly, representative offices are not required to maintain accounting records, publish financial statements or file tax or VAT returns. However, they are required to keep regular records to document the expenses (ie personnel, equipment, etc.) that will be covered by the foreign company.
As already mentioned, a representative office cannot carry out activities related to production or trade, but a representative office is allowed that does not perform exclusively representative functions, but can carry out additional activities in relation to third parties, however, related to agreements between the representative office and the parent foreign company. For tax purposes, such a representative office that does not perform exclusively representative functions is considered a permanent establishment of a foreign company and, as such, is subject to taxation.
Therefore, in addition to registering in the Economic and Administrative List of Enterprises and having a tax code, the representative office will also have to obtain a VAT account number from the competent Italian Taxation Agency.
The request must be made by a legal representative of a foreign company holding an Italian tax code (or an Italian lawyer authorized by special power of attorney) via a single message. After registration in the Economic and Administrative List of Enterprises, the Agency for Taxes and Duties will provide a representative office that does not perform exclusively the functions of a representative office with a special taxpayer code.
Unlike a simple representative office, a representative office that does not solely perform the functions of a representative office will be required to maintain separate accounting records, file VAT returns, file annual tax returns and file financial statements of the foreign company with the competent chamber of commerce.
The designated representative will be able to make a request for a residence permit. P. 1, Art. 27 of the Immigration Code states that “the regulation establishing the application of the law regulates specific procedures for the issuance of work permits, entry visas and residence permits for employees for each of the following categories of foreign workers:
a) managers or highly specialized personnel of companies with headquarters or branches in Italy or representative offices of foreign companies that have their head office in the territory of a Member State of the World Trade Organization, or heads of Italian companies or companies of another Member State of the European Union with headquarters in Italy” . The legal rule in this case refers to the temporary transfer of executives or highly specialized specialists of companies that have their head offices or branches in Italy, or at least representative offices (in this case, the foreign company must have its head office in another member state of the World Trade Organization ), who can be employed either for hire or under a self-employment contract.
In this case, we are talking about managers or employees with special knowledge who, in accordance with the applicable contract, qualify their activities as highly specialized and who must have at least six months experience in this industry. The duration of employment in the representation must be determined and commensurate with the actual needs of the company, and in any case, temporary transfer, also subject to any extensions, may not exceed a total duration of five years. The prerequisite for the issuance of a self-employment visa under Article 27, paragraph a) of the Immigration Code is a professional services contract that the worker enters into with a separate unit, previously approved by the Territorial Labor Office,
In order to obtain a visa at the Italian Consulate, a foreign worker must also attach a certificate of no impediment obtained from the Questura, all documentation sufficient to demonstrate certain professional skills and at least six months of work experience in the industry in which he will work (see art. 40, paragraph 22 of the Regulations establishing the procedure for applying the law; section 1 - entry visas to the territory of the state - paragraph d) categories and types of visas - visa for self-employment). In case the representative is an employee, he will have to apply for the so-called Blue Card.
Representative offices of foreign companies in Italy, which are not independent legal entities, have two distinctive characteristics:
• local presence to promote the interests of the company and its products/services and to conduct other non-business activities;
• the local branch is not a permanent establishment (it does not represent the interests of the foreign company in relations with third parties).
The local branch must register with the Register of Economic and Administrative Organizations (REA, Repertorio Economico Amministrativo) at the Chamber of Commerce, based on the following documents: •
if the company is registered in an EU country: a certificate containing basic information about the company and its legal representatives issued by a foreign authority, equivalent to the Italian Register of Legal Entities;
• if the company is registered outside the EU: certificate of existence of the company, issued by the Italian embassy in the country in which the legal address of such a company belongs.
All documents in foreign languages must be translated into Italian by a certified translator.
For a free consultation on legal support for opening a representative office and obtaining a residence permit in Italy on this basis, you can contact us.
