The first action a foreign company may take in order to be presented as a business entity in Italy is to open a liaison office, also known as a representative office. The Ufficio di Rappresentanza, as known in Italy, represents the easiest way for a foreign legal entity to extend the business on the Italian market. The main purpose of a liaison office is to support the parent company in its marketing efforts as well as in the business development in Italy.
Usually, a liaison office may be registered in Italy, as well as in other countries, in order to do promotional and research activities so that later on the foreign company can open a branch or a subsidiary so it can legally perform commercial and economic activities.
The most important fact a foreign company must know regarding a liaison office is that it is forbidden to perform commercial activities that could generate profit. As in some cases, it can be a disadvantage, the main advantage is that all the costs generated by the liaison office are fully deductible for the foreign company. As such, if a company wishes to perform an accurate market research before starting investments in a new country, a liaison office represents the cheapest method of doing so.
Another important advantage of opening a liaison office in Italy rather than a branch or subsidiary is that the representative offices in Italy are not obligated to register with the Trade Register or submit articles of association. Moreover, as it is not viewed as being a legal entity, but an extension of the foreign company, the liaison office does not have to file financial statements and does not require a minimum share capital in order to function.
A liaison office in Italy can perform a limited number of activities, as it is not an Italian taxpayer. A liaison office can take promotional actions, but can also do marketing research and data gathering. In addition, it can store, display or deliver goods that belong to the parent company.
Like any other business undertakings, opening a liaison office in Italy involves different costs, such as a yearly government tax, that must be deposited at the Chamber of Commerce. Other costs involve the actual monthly costs such as rent and other expenses.
Registering a liaison office in Italy is far from a complicated procedure. The representative and a special attorney must make the first step and it consists of requesting a tax code from the local Tax Office. After the tax code is obtained, the representative must register his presence at the liaison office to the Companies Register in order to be recorded in the Inventory of Economic and Administrative. These steps do not take longer than two weeks to be completed.
We also invite you to watch a short video on the representative office in Italy:
Our team can help you open a liaison office in Italy and they will also provide all the necessary information on virtual offices. Contact our agents in Italy and they will help you with all the details regarding the company formation process.