INTERNATIONAL INVESTMENT CONSULTING

Branches

branchesIn accordance with article 2508 of the Italian Civil Code, foreign companies have the right to establish one or more branches in Italy.

A branch  is  an  extension of  the  foreign  entity  and  depends –  both  administratively and economically – on its headquarters. It uses the  same name and  legal form  as  the  foreign company: it does not have  its own  internal governing body but is managed directly by the governing body  of  the  foreign  company, which  appoints one  or  more   permanent legal representatives (preposto/i), entrusted with the powers to manage and represent the branch  before third parties.

It does not have its own capital and is not required to draw up annual financial statements: 
a copy of the financial statements of the headquarters must be filed at the Trade Register (in the original language, accompanied by a sworn Italian translation).

An annual report is required only in order to prepare the Italian income tax return.  To facilitate record-keeping and the  preparation of its annual  report,  an Italian branch usually keeps the accounting books  required by article 2214  of the  Italian Civil Code,  in particular the  general ledger (libro giornale) and the inventory  book (libro inventari).

Contracts concluded by the  branch  through its  legal  representative are  binding  upon  the foreign  company and  any  liabilities  for  the  breaching of  the  contractual  obligations are attributable directly to the directors of the latter.

The  branch  is subject to Italian laws  and  regulations. The setting-up of a branch must be recorded in the  Trade Register, together with the  appointment of the legal representative, the description of his powers, details  of the registered office, the activities, etc.