The simplest business structure available to a foreign company to establish a presence in Italy is the “Representative Office” (in Italian: “Ufficio di Rappresentanza”). Foreign companies often use a Representative Office to conduct market research before making a decision to establish a branch or a subsidiary.
A Rep Office cannot execute commercial or financial transactions of any kind; nor can it act as an agent or distributor of a foreign company. The keyword is “promotion” not “trading” and Representative Office cannot send invoices, cannot accept payments by customers, and cannot pay providers. Failure to comply with such regulations may result in the transformation of the Representative Office into a permanent corporate entity, subject to all forms of taxation. Thus, Rep Office acts primarily as a marketing vehicle with no tax implications, as long as its structure is kept within strict limits. Before starting any activities, it is advisable to seek legal advice.
A Representative Office is an entity with no legal autonomy which carries out auxiliary and preparatory activities on behalf of a foreign company; typically in Italy. Such activities are those of marketing, sales promotion, collection of information, and scientific or market research, being excluded from actual sales and production operations.
A Representative Office shall be qualified by the absence of:
The presence of the elements listed above would imply the existence of a Branch Office, which falls within the legal and fiscal requirements of a permanent establishment.
Attorney at law since 2006, specialized in real estate law, inheritance, citizenship and corporate law.
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