How to Open a Branch in Italy: Registration, VAT and Payroll

An Italian branch is a registered presence of the foreign company, not a newly incorporated Italian S.r.l. Opening one is more than obtaining a VAT number: the parent must define the Italian activity, appoint a person with stable representative powers, prepare the foreign corporate documents and complete the appropriate registration and tax steps.

The branch can then need its own Italian accounting, VAT and employment workflow. The exact sequence depends on the parent's home jurisdiction, the activity carried out in Italy and whether employees will start at the same time.

First decision: identify what the foreign company will actually do in Italy. A registered branch, an Italian subsidiary, a local unit and a VAT-only position answer different operational needs.

What is a branch under Italian company law?

Article 2508 of the Italian Civil Code addresses a foreign company that establishes a sede secondaria in Italy with stable representation. The company must register the relevant corporate acts and disclose the identity and powers of the people who represent it in Italy. Its business documents must include the required corporate and Italian registration details. ^[source]

The parent company remains the legal entity contracting through its Italian branch. This differs from an Italian S.r.l. subsidiary, which is a separate company. A simple local address or warehouse is not automatically a registered branch: the Italian Business Register distinguishes a secondary office with stable representation from an ordinary local unit.

For an early-stage or limited activity, assess whether an Italian VAT registration or direct hiring by the foreign employer addresses the actual requirement. Neither arrangement should be presented as a branch if no branch has been established and registered.

Decisions to make before collecting documents

Begin with a short internal plan approved under the parent's own corporate rules. It should identify the Italian location, activities, intended start date, person authorised to represent the parent in Italy and the limits of that person's powers. The authority to sign customer, lease, banking and employment documents should be explicit rather than inferred from a generic title.

Check licences or sector-specific authorisations where the proposed activity requires them. Registration of a branch does not, by itself, authorise every regulated activity.

Documents commonly needed to open a branch

The exact package should be confirmed with the Italian notary and the competent Chamber of Commerce. In a typical case the preparation includes:

• the foreign company's current constitutional documents and registration details;
• the decision establishing the Italian branch and specifying its address and activity;
• the appointment of the person who will represent the company in Italy, with clear powers and identity details;
• the latest parent-company accounts and other filings required for the relevant registration procedure;
• powers of attorney where someone else signs or completes the formalities;
• Italian translations and the appropriate form of authentication or certification for the documents concerned; and
• tax and contact information needed for the Italian registration, including the chosen digital contact arrangements.

For EU capital companies, Article 2508-bis of the Civil Code sets out a specific procedure involving a notary practising in Italy; it also allows the statutory digital route, including videoconference where its conditions are met. The Milan Chamber of Commerce guidance lists the establishing act, appointment and powers of the representative, updated articles and latest accounts, with translation requirements for foreign-language documents. The stable representative must also declare the absence of the statutory ineligibility grounds under Article 2382 and of EU administrator disqualifications. Procedures for a company formed outside the EU, or a different legal form, require a separate check. ^[source]

How the registration sequence works

The competent Business Register office is generally the one for the location of the Italian branch. The specific filing and supporting documents depend on the foreign company's legal form and jurisdiction; Rome's Chamber of Commerce identifies the office where a foreign company's secondary office is located. The Comunicazione Unica framework coordinates Business Register filings with tax, INPS and INAIL requirements when those obligations apply. ^[source]

Do not count the project from the last filing alone. Getting usable foreign acts, confirming powers, preparing translations and completing tax or employer setup can take longer than the register's processing of a complete application. Any timetable should be built around the actual documents and the planned first transaction or hire.

Tax code, VAT and the permanent establishment question

The Italian tax identification and VAT workflow should reflect the foreign company and its real Italian activity. A VAT number is an identifier and reporting mechanism; it does not create a branch, nor does the absence of a registered branch settle whether a taxable presence exists. The Revenue Agency's AA7/10 materials concern commencement and changes of VAT activity for persons other than individuals.

For income tax, Article 162 of the Italian Income Tax Code (TUIR) defines a permanent establishment by reference to a fixed place through which a foreign business carries on activity, with further rules including dependent agents. It lists a branch among examples, but also contains exceptions for preparatory or auxiliary activities. Registering a sede secondaria is a company-law step; its income-tax treatment follows the activities actually carried out and any applicable tax treaty. ^[source]

Where the Italian operation is a permanent establishment, Article 152 TUIR governs the attribution of its taxable profit and calls for an appropriate separate economic and balance-sheet statement. Parent and branch are one legal company, but an accounting trail for the Italian activity is still necessary. The scope of corporate income tax, IRAP and VAT returns must be planned on the actual facts and current rules; a company law label is not an all-purpose tax answer. ^[source]

VAT has its own rules for whether an Italian establishment participates in a transaction. The VAT treatment of each supply, purchase and inter-office movement must be reviewed independently. Our Italian VAT guide addresses registration, invoices, ledgers and periodic reporting in more detail.

Hiring employees through the Italian branch

If the branch will employ staff, build payroll into the launch schedule. The employment contract, applicable collective agreement (CCNL), salary structure, mandatory hiring communication, social security, work injury insurance, withholding and monthly payroll reporting need a coordinated setup. A registered branch alone does not complete these employer steps.

INPS states that an employer starting activity with employees must obtain a contribution position (matricola); where the business begins and hires simultaneously, the ComUnica path applies. INAIL requires an insurance registration at the start of activities subject to its cover, with information on the work performed and expected wages. ^{[source] [source]}

For the ongoing cycle of payslips, withholding payments and UniEmens, see Payroll in Italy for foreign employers. If the business needs only one Italian employee, the separate guide on hiring without a local entity explains why a branch is one possible structure, not an automatic prerequisite.

What must be maintained after the branch opens?

Registration is the start of a continuing workflow. The foreign parent should be able to reconcile Italian customer and supplier invoices, bank movements, employment costs, stock and any cross-border dealings with its wider accounts. It should identify who holds the underlying records, who submits Italian returns and who monitors changes in the parent's name, address, directors or branch representative.

There is also a Business Register disclosure distinct from the Italian tax accounts. A foreign company with an Italian secondary office deposits the relevant parent-company annual accounts with the Italian Register; it does not simply substitute a branch-only balance sheet. The Turin Chamber of Commerce guidance explains the distinction and the translation requirements. ^[source]

Three practical examples

Branch opening checklist for the parent company

1. Describe the Italian activity, customers, contracts, facilities and expected turnover.
2. Choose between branch, subsidiary, local unit and VAT-only setup based on the actual operations.
3. Approve the branch location, representative and precise signing powers.
4. Obtain current foreign corporate records, resolutions, accounts and any mandate.
5. Agree document form, translations and filing route with the Italian notary and Register; for an EU capital company, collect the representative's required ineligibility declaration.
6. Map Italian tax identifiers, VAT invoices, income-tax attribution and bookkeeping.
7. If hiring, arrange contracts, INPS, INAIL, mandatory notifications and payroll before the start date.
8. Assign responsibility for parent accounts filing, changes to registered details and recurring returns.

Primary legal and institutional sources

• Italian Civil Code, Articles 2508 and 2508-bis — foreign companies' Italian secondary offices and EU company registration.
• Milan Chamber of Commerce — registration documents for EU capital companies' branches.
• Italian Business Register — secondary office and local unit distinctions; Comunicazione Unica.
• Italian Income Tax Code, Article 162 — permanent establishment; Article 152 — profit attribution and separate statement.
• Official Gazette — Legislative Decree No. 117/2026, Article 377, application from 1 January 2027.
• Italian Revenue Agency — AA7/10 VAT activity registration resources.
• INPS — contribution registration for an employer with employees; INAIL — insurance registration.
• Turin Chamber of Commerce — foreign parent annual accounts filed for an Italian branch.

Related ISY guides and services

Frequently asked questions

Scope: This general guide reflects the rules and official guidance checked on 26 September 2026. Incorporation documents, home-state law, tax treaties, activities, personnel and later legislative changes may alter the result. The sequence should be reviewed for the specific foreign company before transactions or employment begin.