How to Open a Branch in Italy

    A comprehensive guide for foreign companies considering an Italian branch (sede secondaria) as their market entry structure. From legal definition to registration, tax obligations and costs.

    Timeline

    4–12 weeks

    Structure

    Sede secondaria

    Corporate tax

    IRES 24%

    VAT rate

    22% standard

    What is a Branch Office in Italy

    A branch office in Italy (sede secondaria) is a permanent extension of a foreign company that operates in the Italian market. Unlike a subsidiary, a branch does not have its own legal personality — it is legally part of the parent company.

    The branch is registered with the Italian Companies Register (Registro delle Imprese) and can carry out all commercial activities authorised by the parent company, including signing contracts, issuing invoices and employing staff.

    Legal Definition of a Branch (Sede Secondaria)

    Under Italian law (Articles 2506 and 2508 of the Civil Code), a branch is defined as a secondary establishment of a foreign company with a stable organisational structure, its own representation and the capacity to enter into transactions.

    From a tax perspective, an Italian branch is treated as a permanent establishment (stabile organizzazione) under Article 162 of the Italian Income Tax Code (TUIR), meaning profits attributable to the branch are subject to Italian corporate taxation.

    Branch vs Subsidiary: When to Choose a Branch

    The choice between a branch and a subsidiary depends on several factors including liability preference, tax planning goals and operational requirements.

    A branch is typically preferred when the parent company wants direct control over Italian operations, when the activity is project-based or time-limited, or when the parent company wishes to consolidate profits and losses internationally.

    Common scenarios where a branch is preferred include: project-based operations with a defined timeline, Italian activities where the parent company wishes to consolidate profits and losses internationally, and situations where the parent requires direct operational control without creating a separate Italian legal entity.

    For a detailed comparison, see our Branch vs Subsidiary guide.

    Requirements for Opening a Branch in Italy

    To open a branch in Italy, a foreign company must:

    • Obtain apostilled or legalised corporate documents from the country of incorporation
    • Have the documents officially translated into Italian by a certified translator
    • Appoint a legal representative for the Italian branch
    • Execute a notarial deed before an Italian notary
    • Register the branch with the local Chamber of Commerce (CCIAA)
    • Obtain an Italian tax identification number (codice fiscale) and VAT number

    For the full checklist, see Documents required to open a branch.

    Registration with the Italian Companies Register (CCIAA)

    The Companies Register (Registro delle Imprese) is managed by the local Chamber of Commerce. Registration requires filing the notarial deed, the foreign company's articles of association, the appointment of the legal representative and proof of the registered office address in Italy.

    Once registered, the branch receives an Italian registration number (REA) and can begin operations. The process is typically completed within 10–15 business days after filing.

    Tax Obligations of Italian Branches (IRES, IRAP, VAT)

    Italian branches are subject to:

    • IRES (corporate income tax) at 24% on profits attributable to Italian operations
    • IRAP (regional production tax) at approximately 3.9%
    • VAT on sales of goods and services in Italy
    • Withholding taxes on certain payments (dividends, royalties, interest) where applicable
    • Intrastat declarations for intra-EU transactions (where applicable)

    For ongoing VAT obligations, see our VAT registration guide.

    Accounting Requirements for Italian Branches

    Italian branches must maintain proper accounting records under Italian GAAP (OIC), including a general ledger, VAT registers, inventory records and annual financial statements. The branch's financial statements must be filed with the Companies Register annually, together with the parent company's consolidated accounts.

    The branch must also file the parent company's financial statements alongside its own accounts with the Italian Companies Register on an annual basis.

    VAT Obligations

    Once registered, the branch must charge Italian VAT on domestic sales, file periodic VAT returns (monthly or quarterly), submit the annual VAT declaration and comply with electronic invoicing (fatturazione elettronica) requirements. Italy's standard VAT rate is 22%, with reduced rates of 10%, 5% and 4% for specific goods and services.

    Timeline for Opening a Branch (Typically 4–12 Weeks)

    The overall timeline depends on the speed of document preparation, apostille or legalisation procedures in the home country, certified translation, notarial execution and Chamber of Commerce processing. With proper preparation and professional support, the process can be completed in as little as 4 weeks. Complex cases involving non-EU jurisdictions may require up to 12 weeks.

    Timeline may vary significantly for non-EU companies due to apostille and translation requirements, and may extend to 3–6 months in complex cases.

    Costs of Opening a Branch in Italy

    Costs include notarial fees, government registration taxes, certified translation costs, professional fees for the accountant and lawyer, and ongoing annual costs for accounting, tax compliance and registered office maintenance.

    For a detailed breakdown, see Cost of opening a branch in Italy.

    Professional Support for Foreign Companies

    This guide is provided by Studio VPG, a firm of chartered accountants in Italy assisting foreign companies entering the Italian market since 1971.

    Studio VPG provides support for:

    • Opening branches in Italy
    • VAT registration and fiscal representation
    • Accounting and tax compliance
    • Transfer pricing documentation

    Learn more about our services for foreign companies: studiovalpiani.it/apertura-branch-italia/

    Need help with opening a branch in Italy?

    Our team of Italian chartered accountants assists foreign companies with tax registration, accounting and compliance in Italy.

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    Frequently Asked Questions

    How long does it take to open a branch in Italy?

    The process typically takes 4 to 12 weeks, depending on document preparation, apostille requirements and the responsiveness of the Italian Companies Register (Camera di Commercio).

    Do I need a local director or representative?

    Yes. Italian law requires the appointment of a legal representative (rappresentante legale) for the branch who has the authority to act on behalf of the foreign parent company in Italy.

    Does a branch pay corporate tax (IRES) in Italy?

    Yes. An Italian branch is treated as a permanent establishment and is subject to IRES (corporate income tax at 24%) and IRAP (regional tax at approximately 3.9%) on income attributable to Italian operations only — not on the parent company's worldwide income.

    Can a non-EU company open a branch in Italy?

    Yes. Non-EU companies can open a branch in Italy, although additional documentation requirements may apply, including apostille or consular legalisation of corporate documents.

    What is the difference between a branch and a representative office?

    A branch (sede secondaria) can conduct commercial activities and generate revenue in Italy. A representative office (ufficio di rappresentanza) can only perform auxiliary and preparatory activities such as market research, and cannot engage in sales or contracts.