The establishment of a branch in Italy is regulated by the Civil Code, which provides certain requirements and rulings for creating this type of doing business for entrepreneurs willing to invest in Italy. A branch can only be set up if there is a mutual decision to do so among the shareholders of the foreign company. Our company formation agents in Italy can offer information on the branch office registration process in 2025.
| Quick Facts | |
|---|---|
| Applicable legislation |
For foreign countries |
|
Best used for |
– banking, – insurance, – financial operations, – trading |
|
Minimum share capital |
No |
| Time frame for the incorporation (approx.) |
Around 3 months |
| Management |
Local, but not mandatory |
| Legal representative required |
Yes |
| Local bank account |
Yes |
| Independence from the parent company | Dependent on the parent company |
| Liability of the parent company | Full liability on the branch office’s debt and obligations |
| Corporate tax rate | 24% |
| Possibility of hiring local staff | Yes |
Table of Contents
The rights and obligations of a branch in Italy in 2025
A branch can issue invoices has the right to hire employees and may also perform trade activities under the foreign company’s name. If the branch is planning to hire personnel, it’s important to register any hired individuals at the labor office. A local resident must be appointed as the branch representative in Italy, even though the company and implicitly the branch are managed by the parent company’s board of directors.
When establishing a branch in Italy, the founders must keep in mind that any legal entity in the country is subject to corporate taxation and must fulfill its accounting obligations. The accounting documentation must then be submitted to the local Revenue Agency, along with the income tax returns and VAT returns. A major difference between a local company and a branch of a foreign company is that the branch must provide the financial accounts of the parent company and the reports of the audited accounts.
The advantages of a branch in Italy
The branch has lower set-up costs than the subsidiary, for example. Foreign investors will need to consider this when choosing the most appropriate business entity, but they will also need to remember that the company abroad is fully liable for the branch and can be indebted to it. Although the branch will not be able to perform any other business activities than those already performed by its mother company, it will work closely with the clients and business partners in Italy and it will provide valuable knowledge and insight about the Italian market to its mother company abroad.
Our company registration agents in Italy can help you throughout the incorporation of your branch. Although the process is simpler than for other types of companies, the investor still needs to provide a set of documents. The registration takes place in front of a notary who notarizes the incorporation documents. The following documentation is requested upon registration:
- a document showing the parent company’s decision to open the branch;
- its registered address in Italy, types of activities, identification details for the branch representative;
- the foreign company’s certificate of registration and copies of its articles of association;
- information about the representative of the branch office accompanied by the decision of his/her appointment.
Branches in Italy are considered as autonomous and separate entities. The tax registration is therefore mandatory for this kind of structure. As such, Italian branches must submit VAT and income tax returns, maintain their books and file the annual report of the foreign company. We invite you to watch a short video about how you can open a branch in Italy:
The light branch vs. the branch office in Italy
Foreign companies can register two types of branch offices in Italy: the light or the regular branch office. As a comparison, between these two, one should note that a regular branch office can carry out commercial activities, issue invoices, and be used for regular trading activities. Also, a regular branch must have a registered address in Italy and file tax returns, according to the applicable laws.
Regarding the light branch office, it cannot be negated in commercial activities and cannot issue invoices. There is no need to have a local office to file tax returns, but it can be used by foreign companies offering online support for Italian clients remotely.
A short guide to opening a branch in Italy in 2025
If you have decided on a branch in Italy, it is recommended to check the registration formalities, as well as the applicable legislation. You can review the following guide to get an idea of how this entity can be established, with the mention that you can call on one of our agents with experience in company formation in Italy.
- Appoint a representative – A local agent is needed for the registration of a branch in Italy. Here you can call one of our specialists.
- Business address – A branch must have a business address at the time of formation. You can also opt for a virtual office in Italy if this option is much more convenient.
- Necessary documents – Articles of Association and memorandum of association are the documents required by the Italian Trade Register for the establishment of a branch. These must contain information about the shareholders of the parent company, the accepted and signed declaration for the registration of a branch in Italy, as well as details about the company’s directors.
- Bank account – Being an entity with economic activities, it is necessary to open a bank account. You can choose local or foreign banks with branches in Italy. And here you can benefit from help from our agents.
- Tax registration – It is mandatory to register for the payment of taxes, as a branch in Italy. The corporate tax and the VAT are one of the most important.
- The choice of management – This can be local or foreign, depending on the preferences of the parent company.
- Hiring staff – If you want to hire foreign personnel, it is recommended to check the immigration formalities, where applicable. We are at your disposal with specialized help in this matter.
Would you like to start a business in Italy as a foreigner? Interested in opening a company in Italy? It is advised to ask for help from a local team of specialists, such as our agents. We assist investors in starting their branches in this country, by managing the procedures involved.
Accounting aspects for branches in Italy
The accounting of a branch can come to the attention of a company or a department of this kind in the company. Regardless of the option you have, you must know that the branch in Italy must respect the Italian Civil Code and EU legislation for accountancy. Considering these aspects, it should be mentioned that the branch in Italy must keep accountancy books and file the annual financial statements with the applicable authorities. Are you interested in the services of a team of accountants in Italy? You can contact our company and benefit from payroll services, bookkeeping, audits, preparation and submission of annual financial statements, and many more.
Italy’s economy in a few lines
Italy remains a preferred business option for many international investors due to varied opportunities available. As such, opening a branch in Italy in different business sectors is quite appealing. We invite you to explore the following information that highlights in a few lines the economic direction of Italy:
- About 0.5% was the GDP expansion registered in Italy by the end of 2024, according to data provided by the National Statistics Bureau. However, an increase of at least 1% was estimated for this year.
- Approximately 0.7% was the increase of the net exports of Italy in 2024.
- According to estimates, the GDP is expected to grow by around 0.8% in 2025.
- The unemployment rate in Italy in 2024 stood at around 6.5%. The rate is expected to fall to 6.2% in 2025.
Do you need to know more about the opening branch in Italy in 2025? Feel free to contact our experts in company incorporation in Italy and ask for further information and personalized services.