The light branch in Italy
is a good choice for foreign investors who want to set up an office in the country but want to do so with less associated costs. This form of business is similar to the Italian representative office
but allows the investors to perform certain activities that cannot be undertaken otherwise.
The light branch
is a solution for certain businesses or an option to test the Italian market before opening a new company or setting up a subsidiary. Our company registration agentts in Italy
can help you incorporate this simple business form and handle any matters related to company formation.
The characteristics of a light branch in Italy
The light branch is essentially a type of representative office, but unlike its counterpart, it can have employees and a bank account opened in Italy.
The light branch
cannot perform trade activities, cannot issue invoices or be registered for VAT purposes
. Although it has its limitations, this type of company has financial advantages
: lower incorporation costs and significantly lower costs for maintenance.
The advantages of a light branch in Italy
Apart from the lower incorporation and maintenance costs, the light branch will also have less requirements for annual financial reporting and the keeping of books and records. Because it cannot perform trade activities or issue invoices the light branch does not have to file an income tax return or a VAT return.
The foreign company abroad can easily cover the taxes and expenses of the Italian light branch
such as those associated with employment, office rent and additional office expenses. If the mother company needs to expand the activities of the light branch
it can upgrade it to the traditional recognised form of branch in Italy
. The foreign company will still be liable for the actions of its Italian counterpart but the branch will be able to perform a number of additional business activities in the country.