Italy, as one of the largest economies in Europe, remains a strategic market for foreign companies seeking to expand operations within the EU. Whether aiming to explore the Italian market or to manage operations locally, establishing a branch or a representative office in Italy can be a powerful move.

However, this requires a clear understanding of the legal, administrative, and fiscal framework. In this guide, we will cover everything you need to know about setting up a branch in Italy, including the legal definition, registration process, required documents, tax and accounting obligations, and the role of the legal representative.

Under Italian law, a branch (filiale) is a secondary office of a foreign company with a permanent and operational presence in Italy. According to Article 2508 of the Italian Civil Code, a branch does not have its own legal personality but operates under the legal identity of the parent company. It is thus the parent company that remains fully liable for the activities carried out by the branch.

For tax purposes, a branch is treated as a “permanent establishment” (Stabile Organizzazione) and is subject to Italian corporate tax laws. While it lacks legal autonomy, a branch typically has operational autonomy, delegated by the foreign parent, to conduct business activities within Italy.

Setting up a branch begins with a formal resolution by the parent company’s authorized corporate body. This resolution must include the branch’s Italian address and the appointment of a legal representative (institore), with clearly defined powers.

Although the representative does not need to be an Italian resident, they must obtain an Italian tax code (Codice Fiscale). The branch must also have a registered office in Italy and obtain both a VAT number (Partita IVA) and a separate tax identification number.

The branch must be registered with the Registro delle Imprese (Business Register) managed by the local Chamber of Commerce. This registration serves as the official act of establishing the branch’s presence in Italy and must occur within 30 days of the effective establishment.

Registration must be notarized by an Italian public notary, who drafts and files the deed of establishment (atto costitutivo), along with all supporting documentation. The process is streamlined through Italy’s “Comunicazione Unica” system, which allows a single online submission to the Business Register, tax authorities, and social security institutions. In some cases, the branch may also need a European Unique Identifier Code (EUID).

The parent company must provide the following documents, which must be officially translated into Italian and either notarized, apostilled (if applicable), or legalized:

• Memorandum and Articles of Association

• Certificate of Incorporation or Good Standing

• Board Resolution authorizing the branch, detailing:

  • Italian address

  • Appointed legal representative

  • Scope of powers

• Copy of the representative’s ID or passport

• Power of Attorney, if the directors are not directly managing registration

These documents must be filed with the notary as part of the registration process.

The legal representative of the branch is a key figure and acts as the interface between the Italian authorities and the foreign parent company. This person may be Italian or foreign, and resident or non-resident in Italy, but must have an Italian tax code.

Their responsibilities include:

• Managing the branch’s daily operations

• Representing the branch before Italian authorities

• Ensuring compliance with tax, labor, and administrative laws

In some cases, the representative may be personally liable—jointly and severally—for unpaid taxes of the branch. The representative’s handwritten signature is generally required for deposit at the Business Register.

Tax obligations of a branch in Italy

Setting up a branch of a foreign company in Italy offers strategic access to the Italian and broader EU market. However, it requires careful planning and strict compliance with local legal, tax, and administrative regulations. From appointing a legal representative to understanding the implications of unlimited liability, each step must be handled diligently.

Working with a local legal advisor can significantly ease the process and ensure that your branch is set up effectively and compliantly. Whether you’re considering a full-fledged branch or a representative office, Italy remains an attractive and accessible destination for foreign investment.