Branches - Italy
Many of the requirements and procedures for opening a secondary establishment are the same as for starting up a business.
The Services Directive: One-stop shops
The Services Directive is a European law that aims to make life easier for businesses that wish to provide services in the European Union – in their home country or abroad. The Directive defines the rules that apply to entrepreneurs wishing to establish a business or perform temporary services in the EU/EEA area (the 27 EU member states, plus Iceland, Liechtenstein and Norway). It obliges member states to eliminate unnecessary bureaucracy, simplify formalities for businesses and make public administrations more efficient.
For the implementation of the Directive, each member state had to set up ‘Points of Single Contact (PSC)’ , e-government portals which help businesses complete their administrative procedures on-line. The PSCs provide comprehensive information on all administrative matters related to setting up or expanding a services business in a given country. This includes for example:
- Which licences, notifications or permits do I need to obtain to start a business (at home or abroad)?
- What do I need to do when I want to offer my services abroad on a temporary basis?
- What do I need to do to apply for a licence? Which authority is responsible?
- Are the licences subject to a fee? What kinds of deadlines apply?
- Which acts and decrees apply in my sector?
- What do I need to do to establish, for instance, a restaurant or a shop? Or to work as a tour operator in another country without actually setting up a company?
- Where can I turn for personalised advice and further information?
With the PSCs, you no longer need to approach various authorities one by one!! The PSC allows you to find all relevant information and to send in your online applications to the responsible authority through one single contact point, the PSC. You can complete your administrative formalities electronically through the PSC. Just contact the PSC of the country that you want to do business in.
All PSCs are part of the European EUGO network; through a central website you can easily access all PSCs in Europe. Of course, the services of the PSCs are optional. You may always address yourself directly to the relevant authorities, too.
Types of secondary establishment
Foreign companies wishing to do business in Italy have various opportunities which are, in order of increasing commitment and autonomy, permanent organisations and subsidiary companies.
First of all, they can set up a permanent organisation, which is a fixed business headquarters through which the foreign company carries out all or part of its activities within the State (Article 162 Presidential Decree 917/86).
The permanent organisation has accounting/fiscal autonomy (operates with its own tax identification code/VAT number) and is used for the taxation of revenue produced within the state by the parent company. The permanent organisation, therefore, does not have legal or contractual anonymity, i.e. it cannot carry out business in its own name, but only in the name and on behalf of the foreign company.
The permanent organisation must be signed up to the Italian General Business Register (REA) within 30 days of the opening day, either online (with digital signature) or on paper, submitting models P, inserts P and UL.
The turnover of the permanent organisation and branches is subject to taxation in Italy and is also included in the balance sheet for the parent company (which can only avoid double taxation by way of specific agreements between Italy and the country in which its registered office is based).
Finally, if the parent company wishes to establish a long-term business in Italy, it can set up a subsidiary company, which has complete legal, contractual and fiscal autonomy.
The subsidiary is naturally subjected to taxation in Italy and its turnover is only shown on the balance sheet of the parent company as a residual amount.
As it is an autonomous company, the tasks for setting it up are the same as those for a new company.
Tax relief is available for setting up new businesses and expanding existing ones. Financial aid is also available and is aimed at supporting investment, management, training and technical assistance.
Check also the legislation on this topic in: