Italian law states that every company has to have an official registered office and keep company books.
A Representative Office in Italy (Ufficio di Rappresentanza) provides a local presence in the country to develop your business name and brand, including its products and services. There are restrictions on this type of company however; you can use it to promote your business but cannot use it as an address to send invoices, accept payments from customers, or pay your providers. The parent company or head office in your domicile country should take care of these aspects.
The benefits of a Representative Office include its cost effectiveness and reduced tax liability, as you don’t have to pay taxes or require a VAT number. It is the cheapest form of entity in Italy and so provides a low cost presence in the country from which you can build up your business exposure. It can also be a more prestigious entity than a normal Italian residence, as a Representative Office is officially recognised as a business vehicle.
In order to have a credible office, two numbers are required. Firstly, a “Codice Fiscale”. This is provided by the Tax Agency, “Agenzia delle Entrate”. It is made up of a series of eleven numbers and is the general tax code for a Representative Office. Secondly, a “Camera di Commercio”. This is provided by the Chamber of Commerce and is only given to those companies that pay an annual tax.
The Cost
There are annual costs that are applicable to all types of company in Italy.
1. In year one you must pay the setup costs. The amount depends on whether or not you use a consultant. Although it is the more expensive route, Italian legislation is notoriously tricky and can make this more of an ordeal to go it alone.
2. A government tax of around €110 Euros due to the Chamber of Commerce yearly.
3. You must have a registered address in Italy. These expenses vary according to how you want to present your company. You may want to spend more money and impress clients and associates with an upmarket looking office, or keep a lid on your budget and just be satisfied with a virtual office. Virtual offices range between €500 – 1500 a year, and renting costs will obviously be a lot higher and depend on the area.
For further information, please do not hesitate to contact us.