ITALY

COMPANY FORMATION
REGISTRATION OF BRANCH IN ITALY

The incorporation of an Italian legal entity by a foreign entity (whether a corporation or an individual) usually reflects a transition from doing business with Italy to doing business in Italy. Indeed, Italian legislation recognizes said transition and allows such entities to establish various levels of presence in Italy, from a representative office to a branch and eventually to a limited liability company.

Let us provide you a brief review of the two most common forms of incorporation for foreign entities in Italy (Representative Office and Branch, having excluded the current Italian limited liability companies – the S.p.A. and the S.r.l.), having however noticed for your specific interest for a Branch of your Foreign Company.

REPRESENTATIVE OFFICE
A Representative Office is usually incorporated to serve for limited purposes of marketing and sale promotion, as it cannot generate profits, and is also not deemed as a permanent establishment for fiscal purposes. The proceedings for its incorporation are quite similar to those of a Branch (as specified hereunder). Neither the Representative Office nor the Branch are deemed as separate legal entities with respect to the parent company, however, the Branch is often treated as such by Italian law (from the fiscal point of view).

BRANCH
The following documents are required to register a Branch in Italy:
a) Corporate resolutions of the Parent Company resolving:
(i) to open a branch;
(ii) to appoint a branch manager; and
(iii) to grant the manager some powers, necessary in order to enable him to carry on the day to day business of the branch;
b) By Laws of the Parent Company (latest version); and
c) Certificate of good standing of the Parent Company issued by the competent authorities.

All the above documents must be translated to Italian, as well as notarized and legalized by Apostil.

Additional documents, which are required to affect such registration, are:
a) Application for the VAT number of the Branch and for the fiscal code numbers of the legal representative of the parent company and of the Branch manager;
b) Photocopies of the pages of the legal representative's and the Branch manager's passports showing residence, signature and photograph;
c) Forwarding of all the above documents to a Notary Public in Italy for deposit with the authorities;
d) Registration of the deed of deposit in the Corporate Register Office (signed by the Branch manager);

LEGAL ASPECTS
The branch of foreign companies is governed by Art. 2508 of the Italian Civil Code as changed by Legislative Decree No. 6/2003(1), which lays down the general rules and duties to comply with in this circumstance. It does not expressly define the concept of branch but lays down some duties of disclosure to be observed as we are going to see hereinafter in the survey on the legal aspect of the set up of a branch.

On a legal standpoint the branch is not company established ex novo under the Italian law, even though with the capital entirely owned by foreign partners. It is an entity with no legal status under the Italian legislation, belonging to the foreign subject (an office, a store, laboratory, etc.), that continues to have its head office, registered office and operating office abroad.

Despite that the branch is subject to the Italian laws governing the disclosure of the company deeds, as well as to those ones governing the management of the company, or laying down specific conditions (see Art. 2508 Civil Code).

Pursuant to the above mentioned, it must disclose the surname, forename, date and place of birth of the person (individual) appointed as the Legal Representative of the Branch in Italy.

Should the aforementioned formalities not be observed, an unlimited and joint liability will rise on those subjects acting in the name of the branch for the obligations assumed on behalf of the company.

The establishment of a branch must be performed before and by an Italian Notary Public, who will carry out all the needed fulfillments. For this purpose the foreign company setting up a branch must provide the Italian Notary Public with the following documents:

1) Certified copy of minutes of the Board of Directors Meeting or of the Minutes of the Ordinary Shareholders' Meeting of the foreign company aiming to establish a branch in Italy (it is obviously required the minutes of the meeting resolving upon the set up). In that resolution in fact the Board of Directors (or the Shareholders' meeting as above) must in general state:

a) the opening of the branch;
b) the address of the legal office of the branch;
c) the business activity that will be performed by the branch;
d) the personal data of the subject empowered to carry out the formalities for setting up the branch;
e) the personal data of the subject appointed as a representative who will run the branch and the relating powers.

Should the above mentioned subject not be a member of the Board of Directors of the foreign company, a special power of attorney must bring the powers granted.

Obviously the above documents must be accompanied by a sworn translation in Italian and have to be notarized by a notary of the place where the foreign company is located, and apostilled.

Should you need, we can take in charge of respective translations and certifications, into the Italian language; just let us know should that be your option, so that we may quote you these services;

2) Certificates of the foreign company. Particularly, the foreign company must provide with the following documents:

a) a copy of the certificate of registration of the head office with the Register of Companies the State where the foreign company is located stating the establishment of a branch in Italy;
b) a copy of the Articles of Incorporation and of updated By-Laws of the head office.
c) Certificate of good standing of the Parent Company issued by the competent authorities.

All the above documents must be translated to Italian, as well as notarized and legalized by Apostil.

The reason why the foreign company must provide the Italian Public Notary with the above documents is that they must be submitted at the time of the registration of the branch with the Local Trade Register.

Once done all the above fulfillments in fact the branch must be registered with the Local Register of Companies by filing specific forms prepared by the Italian Register of Companies (i.e. Forms SE and S1). Those forms must be signed by the Legal Representative and the signature must be certified as true by a notary.

TAX ASPECTS
Under Italian law, the Branch is not an independent entity with respect to the parent company but in some cases is treated as such by Italian law. From the fiscal point of view, all profits made by the Branch in Italy are subject to taxation as if they were made by an Italian company. A Branch is, therefore, considered as a permanent establishment and is consequently subject to corporate income tax and must keep proper books and file its VAT returns as well as the annual financial statement of the parent company, including profit and loss accounts (translated into Italian). In addition the Branch may issue invoices, employ employees and trade under the name of the parent company.

INCORPORATION FEES
Professional fees – Euros 3,500.00
Domiciliation fees (provision of registered Office as legally required) – Euros 1,800.00/annual
Notary fees – Euros 2,500.00
Capital Transfer Tax (assuming EUR 10,000 capital) - Euros 100.00
Application VAT registration number in Italy – Euros 475.00
Preparing and providing a Specific POA (written directly in Italian language in order to avoid the sworn translation from English into Italian language) issued in our behalf to take part to the public deed in Italy or the Branch registration – Euros 650.00 (*)

(*) If written in English, a sworn translation into Italian language will be required in Italy with separate translation cost to be charged – Euros 375.00
Preparing and providing a Specific POA (written directly in Italian language in order to avoid the need of following sworn translation from English into Italian language) issued in our behalf to apply for obtaining a personal tax number for your Client (in its capacity of non resident Manager of the Italian Branch) – Euros 375.00 (**)

(**) Also this Specific POA need to be provided with notarized signature and Apostil, together with a notarized and apostilled copy of his/her Passport and a free copy of his/her personal identification document showing where is currently and actually residing
Registration of the Branch with Registrar of Companies – Euros 525.00
Registration of the Branch with Italian Tax Office – Euros 425.00
Inscription at the local Chamber of Commerce (Camera di Commercio - Diritto Anuale) - Euros 450.00
Annual maintenance fees – Euros 650.00/annual
Book keeping services – Euros 3,400.00/annual (depending on volume of documents to be processed (***)

(***) This service is optional, as you can freely contract your own accountant in Italy;
this service includes the maintenance by electronic records of the following corporate and accounting books: general ledger, shareholder’s meeting book, Director’s resolutions book, Input Vat register, Output Vat register, depreciable assets’ book, as required by both Itax and commercial law in Italy; online transmission service of the annual tax returns to the Tax

Administration on behalf of the company is also included;
Opening of Corporate Bank Account in Italy – Euros 870.00
2nd set of statutory documents for bank account opening purposes – Euros 325.00
General disbursements – Euros 500.00
Delivery of documents by express courier – Euros 70.00
Company (Branch) Seal – Euros 70.00

ANNUAL FEES
The Annual Fees are concerned with the following services:
Annual Statutory Fee, which includes:
- Local incorporation agent to provide you all services relating company matters (registered agent facilities);
- Attending to routine compliance matters (inclusive of periodic file reviews), reviewing official correspondence received and other routine matters incidental to good corporate governance;

FULL SERVICED VIRTUAL OFFICE IN ITALY 8OPTIONAL SERVICES)
Additional services:

Exclusive Telephone number in Italy - 750.00/annual
Set up fee – Euros 50.00
Provision to cover all calls diverted to your own line outside Italy – Euros 500.00

Exclusive Fax number in Italy – 750.00/annual
Set up fee – Euros 50.00
A provision to cover fax re-forwarding on a daily basis – Euros 200.00

BANKING IN ITALY
Recommended Italian Banks:

Banca Agricola Mantovana
Ambroveneto
Banca del Salento
Banca Popolare del Verona
Banca Popolare di Novara
Banca Sella
Banco di Napoli
Cariplo
Mediocredito Centrale - Mediosim
Monte dei Paschi di Siena
We@bank

DELIVERY OF DOCUMENTS
We can either dispatch the documents to you by DHL or any other express courier, if a faster delivery service required

TIME REQUIRED FOR INCORPORATION
Approximately 2 week’s time

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