An Italian representative office “Ufficio di Rappresentanza” follows the usual international rules, however there are a few local insides that you should known.
Like in any other country, a representative office provides a presence in Italy, to promote your company and your products. The key word is “promotion” not “trading”. Your representative office CANNOT send invoices, can NOT accept payments by your customer and CANNOT pay your providers. These activities should be performed by your company in your country.
So why setup a Representative Office in Italy?
- To have a presence in Italy. This is helpful in any country, and especially in Italy where the local business culture is based on personal relationship more than rational analysis;
- To have a low cost presence in Italy. The representative office is the cheapest form of entity to setup in Italy;
- To have a easy to manage presence in Italy. A representative office doesn’t pay taxes and doesn’t require a VAT number;
- To show in your country that you have a presence in Italy. We help foreign companies to invest in Italy since 2005, and we have noticed that an Italian representative office sometimes is more prestigious at home than in Italy. Think of a Chinese textile company or an Indian fashion designer that can make a press release from its Italian office during the Milan Fashion Week, the promotional result can be very rewarding.
How to setup properly your Italian Representative Office
This is where your Italian consultant usually fails. In Italy we have two company numbers, in order to have a credible and proper representative office you need them both. The first number is provided by the Tax Agency “Agenzia delle Entrate” and it’s called “Codice Fiscale“. Even if you don’t have to pay taxes, you need one Codice Fiscale for you – director of the foreign company – and one for your representative office. The code for an individual is a sum of letters and numbers, the code for your representative office is a series of 11 numbers.
The second number is provided by the Chamber of Commerce “Camera di Commercio“. You have to pay an annual tax to get this number. If your consultant – or the manager you sent to Italy – provides a very official looking document with a code of 11 numbers, you are in trouble. In fact your customer in Italy – or your colleague home – will not find any proof that your representative office is real.
To be sure that your office is registered correctly, you should get a green certificate usually with a gold legal stamp, like the one in this picture. This document could be legalized with apostille to be effective in your country. To be used in China, the legalization will be provided by the Chinese Consulate in Italy (major offices in Rome and Milan).
What’s the cost of a Representative Office in Italy?
As usual, it depends from your goal – do you want to impress your customer with an luxurious office in downtown Rome? Or a virtual office is enough? However some basic rules are always true.
- The first year you should pay the setup costs. The price depends from your consultant or if you do everything by yourself. Knowing the Italian bureaucracy I strongly suggest to use a consultant if you can afford it. It doesn’t have to be a lawyer, a cheaper company formation agent is enough. Price depends but I believe that they will not charge less than Eur 500 including setup taxes.
- Each year you have to pay a government tax. The moment I am writing – 2012 – this tax is around Eur 110 plus the job of the person filing the form and paying the taxes at the Chamber of Commerce (no online payment I’m afraid).
- You need a registered address in Italy. You can rent an office, but the law allows using a cheaper virtual office as well. The price of virtual office in Italy is higher than in other countries such as England but the competition is growing, so the costs are going down. You can probably have to put in your budget an expense of Eur 500-1500 per year, more if you want to rent your own office.
Do you have to setup a Representative Office or a Light Branch?
In the next post I will introduce you to Light Branches and Branches in Italy. A light branch is one of the less known entity in Italy, but one of the most effective solution for customer care, IT support and other similar companies.
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Thanks. Do I have to live in Italy to manage the representative office?
Good Article Stefano! Thanks for sharing you experience..
You can explain better the difference between a BRANCH and a LIGHT BRANCH?
I could write an essay of 20 pages, but – in short – that’s the difference:
1) If you need to issue invoices from the Italian entity = than you need a BRANCH
2) If you do NOT need to issue invoice = than a LIGHT BRANCH is enough
Wondering if you can help point me in the right direction. We need a legal representative in Italy for banking regulation purposes.
Thank you in advance for the help.
Great articles, thank you for posting them! I need your advice: I’m planning to import some goods from Latin America and deliver them throughout Europe. I decided to do it through Italy, due to its geographical position. I’m planing to rent a warehouse in Italy, perform the import there, and then ship throughout Europe (also in Italy). I’m located in Romania, but opening a company in either country is an option for us. Due to the lower taxes and lower bureaucracy, it would be better for me to open it Romania and to operate in Italy.
In this case, would it be sufficient to have only a Representative Office in Italy? Can we do the import and run the sales in Italy through a Romanian company? Also, we may need to staff some people in the Italian warehouse and also some sales agents. Does this mean we need a Light Branch?
We are also looking for more detailed legal advice, so please feel free to contact me offline.
Thanks in advance!
Yes, definitely it is better to open a light branch (representative office) in Italy. You will do import and sales through the Romanian company (this means no invoicing through the Italian light branch, but directly through the Romanian company). For further advice feel free to use the contact page.
Can REPRESENTATIVE OFFICE buy apartments in Italy ?
Do you mean a branch, or a light branch?
Ciao Stefano, grazie per i tuoi articoli, sono molto interessanti. Vorrei porti un quesito al quale ancora non ho trovato risposta:
L’azienda tedesca per cui lavoro attualmente come dipendente, mi ha proposto di trasferirmi a Roma, dove vorrebbero aprire un ufficio di rappresentanza (si tratta di una casa d’aste). In teoria,però, dovrei concludere il rapporto di lavoro in vigore e firmare un nuovo accordo “independent agreement” nel quale si afferma che lavorerei per loro come freelancer. Quindi mensilmente dovrei fatturare le mie prestazioni. Tra le mie responsabilità ci sarebbe, oltre a quella della promozione sul territorio nazionale anche l’acquisizione di oggetti d’arte etc. Un amico commercialista dice che per aprire la partita iva dovrei iscrivermi come “agente di commercio”, ma vorrei capire se è effettivamente questa la figura che andrei a ricoprire o se ci sono alternative.
Grazie in anticipo per il tuo aiuto.
dalla descrizione delle mansioni che svolgeresti, sembrerebbe che agiresti come agente di commercio.
Can a representative office or light branch sponsor an employee from the US to run that office?
Yes, it can.
I would like to ask if you can suggest a good professional lawyer company or formation company in Milan.
We would like to set up a representative office ,for the cost of agency ,we got quotation for making visa 2,000eu and representative office 1,500eu. do you think it can we get a processional which is cheapper ?
Thank you and looking forward for your answer.
Dear Stefano, I do thank you for the advices, the light branch option it’s precisely what I have been looking for.
Dear Michele, what is the correct Italian name for “light branch” and where shall I go for the registration?
Italian name is “ufficio di rappresentanza”.
Registration can be issued through us.
Can a representative office or light branch employed any person in Italy, to take care of their virtual office, and promote their business there? and you expand more on taxes in this case
Yes they can. In fact, this is one of the most common reasons to open a Light Branch (that is a Representative office registered at the Labour Office)
Thanks for your reply, who can help us to get more insight thereof, in lazio region? it means “A representative office” has to be registred with 1.) Tax office 2.) chamber of commerce 3.) Labour Office