The light branch in Italy is a good choice for foreign investors who want to set up an office in the country but want to do so with less associated costs. This form of business is similar to the Italian representative office but allows the investors to perform certain activities that cannot be undertaken otherwise.
The light branch is a solution for certain businesses or an option to test the Italian market before opening a new company or setting up a subsidiary. Our company registration agentts in Italy can help you incorporate this simple business form and handle any matters related to company formation.
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The characteristics of a light branch in Italy
The light branch is essentially a type of representative office, but unlike its counterpart, it can have employees and a bank account opened in Italy.
The light branch cannot perform trade activities, cannot issue invoices or be registered for VAT purposes. Although it has its limitations, this type of company has financial advantages: lower incorporation costs and significantly lower costs for maintenance.
This business form needs to be registered with the Chamber of Commerce and also with the Labour Office if the investor plans to hire employees to work for the light branch.
If you want to open a business in Italy, our advice is to discuss in detail the formalities involved with one of our specialists. You have at hand a series of optimal business structures, and among them, LTD, with a minimum share capital of only 1 EUR. We mention in this case that the incorporation of a company does not normally exceed 7 days. You also have the possibility to buy a ready-registered company, but all the information can be provided by our company formation agents in Italy.
The advantages of a light branch in Italy
Apart from the lower incorporation and maintenance costs, the light branch will also have less requirements for annual financial reporting and the keeping of books and records. Because it cannot perform trade activities or issue invoices the light branch does not have to file an income tax return or a VAT return.
The foreign company abroad can easily cover the taxes and expenses of the Italian light branch such as those associated with employment, office rent and additional office expenses. If the mother company needs to expand the activities of the light branch it can upgrade it to the traditional recognised form of branch in Italy. The foreign company will still be liable for the actions of its Italian counterpart but the branch will be able to perform a number of additional business activities in the country.
For more information and assistance during the company incorporation procedure please contact our company registration agents in Italy.