The simplest business structure available to a foreign company to establish a presence in Italy is the “Representative Office” (“Ufficio di Rappresentanza”). Foreign companies often use a Representative Office to conduct market research before making a decision to establish a branch or a subsidiary.
Rep Office cannot execute commercial or financial transactions of any kind; nor can it act as an agent or distributor of a foreign company. The key word is “promotion” not “trading” and Representative Office cannot send invoices, cannot accept payments by customers and cannot pay providers. Failure to comply with such regulations may result in the transformation of the Representative Office into a permanent corporate entity, subject to all forms of taxation. Thus, Rep Office acts primarily as a marketing vehicle with no tax implications, as long as its structure is kept within strict limits. Before starting any activities, it is advisable to seek legal advice.
What is a Representative Office?
A Representative Office is an entity with no legal autonomy which carries out in Italy auxiliary and preparatory activities on behalf of a foreign company; typically, such activities are those of marketing, sales promotion, collection of information and scientific or market research, being excluded actual sales and production operations.
A Representative Office shall be qualified by the absence of:
The presence of the elements listed above would imply the existence of a Branch Office, which falls within the legal and fiscal requirements of a permanent establishment.
NOTE: employees seconded to Italy will need to be registered with the Italian Social Security Authority (INPS). Italian law provides for that Social Security charges are to be paid on behalf of the employee, unless different rules are set forth by any bilateral treaty between Italy and the country where the foreign company is registered.
Attorney at law since 2006, specialized in real estate law, inheritance, citizenship and corporate law.
Mazzeschi S.r.l. | Operazione/Progetto finanziato nel quadro del POR FESR Toscana 2014-2020
Il progetto ITACA (ITaly Attract ChinA) è un investimento nei paesi/mercati a lingua cinese, in particolare Taiwan con l’obiettivo di accrescere le quote di mercato dell'azienda. Tramite ITACA la Mazzeschi Srl ha aperto un ufficio a Taiwan con assunzione di personale di lingua cinese, creato un sito internet in lingua cinese e partecipato a fiere e varie attività di promozione a Taiwan.
Mazzeschi S.r.l. | Project co-financed under Tuscany POR FESR 2014-2020
The ITACA project (ITaly Attract ChinA) is a fund to invest in Chinese-speaking countries/markets, in particular Taiwan with the aim of increasing the company's market shares. With the help of ITACA project, Mazzeschi Srl has opened an office in Taiwan and has hired a Chinese-speaking staff, created a Chinese website and participated in fairs and various promotional activities in Taiwan.