Recently, misleading articles concerning the obtaining of an Italian Visa and Residence Permit through the establishment of a Representative Office in Italy have circulated on the internet.
It is necessary to clarify that the Italian Immigration Code does not refer precisely to this type of Residence Permit, but includes it within a broader category: the Intra-Company Secondment Residence Permit.
The Intra-Company Visa is conceived for employees of foreign Companies, with headquarters in another European or non-EU country, that are temporarily transferred to another entity or Italian branch.
Notably, pursuant to article 27-quinquies of the Italian Immigration Code, the intra-company secondment can be implemented when the hosting entity is a subsidiary or in any case belonging to the same corporate group of the seconding company, when it is its branch or its representative offices.
What is a Representative Office?
The Italian law does not give a precise definition for “representative office”. It is thus necessary to refer to the definition included in the OSCE Convention, according to which the representative office is a foreign Company’s permanent office in Italy having promotional functions only, or carrying out scientific or trade research, or other data collection activities.
The representative office has to be a physical place, with specific address, through which the Company can work in Italy in preparation of any possible future start of a business activity. Indeed, the representative office can carry out study activity and market analysis only, or other ancillary activities, whereas it cannot conduct any commercial or production activity of goods or services.
The establishment of a representative office requires specific procedures and the collection of relevant documentation, for instance:
- a detailed description on headed paper of the activity carried out by the Company;
- the Company registration report of the foreign Company that intends to establish a representative office in Italy, including the charter and the name/s of the shareholder/s or the director/s;
- a proxy of the Board of Directors (or of the sole director) which has to (a) authorize the establishment of a representative office in Italy and specify the office’s address and to (b) appoint a supervisor who can be either a director or an employee of the foreign Company;
Since the Rep. Office does not carry out production or sales activities and therefore it does not have profits (it is solely a cost for the foreign Company), the representative office is not considered a permanent organization from a tax perspective, and does not have to pay taxes in the Country where it is located.
As a consequence, the representative offices do not have to file income tax return or VAT tax declarations, but they will just have to keep internal accounting in order to keep track of office and personnel expenses, which will be covered by the foreign Company.
Intra-Company Visa and Residence Permit
Article 27-quinquies allows the application for the Intra-Company Residence Permit only and exclusively to employees of the seconding Company, that is the Company posting workers in Italy. Just those who are employed by the seconding Company can be seconded to the Italian branch. In Italy, employment implies a relationship of subordination between the employee and the employer. Therefore, the main shareholder of the seconding Company, who controls it, cannot be also an employee of the same Company.
In non-EU jurisdictions there are various and broader notions of “employee” compared to the Italian one, and a major shareholder of a company, in some cases, can formally be an employee of the same company too. The conflict among more or less rigid concepts of employment finds clear solution in article 2, paragraph 2 of the Directive 96/71/EC: the concept of employee is understood as per the legal framework of the State where the worker is seconded. Therefore, secondment to Italy (and probably to any EU Country) is not an option for to major shareholders (occasionally directors) of foreign Companies.
In addition, it is noteworthy that the procedure for the obtaining of an Intra-Company Visa does not change according to the hosting entity. In particular, whether the hosting Company is a representative office, the procedure to follow is the one laid out in article 27-quinquies of the Italian Immigration Code, comprising the following steps:
- application for the “Nulla Osta”, a Certificate of No Impediment issued by the competent Immigration Desk;
- application for the Visa at the Italian Embassy/Consulate in the applicant’s place of residence;
- entry in Italy and application for the residence permit at the competent Immigration Desk within 8 days;
- registration of the applicant’s fingerprints at the competent Police headquarters and submission or relevant documentation;
- issuance of a 2-year residence permit.
The Transnational Secondment to a representative office in the labour law field
Once the Representative Office has been established and the Italian Residence Permit issued, it is essential that the seconding Company is in compliance with labour law obligations
With reference to the Italian law, transnational secondment is regulated by the Legislative Decree 136/2016, implementing the European Directive n. 2014/67/UE, which in turn implements Directive 96/71/EC, the core European legislation in the transnational secondment field and its guarantees[1]. This legal framework is aimed at protecting employees seconded to the Italian territory posted by companies located in other European or non-EU states by guaranteeing a full-bodied set of protections concerning working, health, and safety conditions.
During the secondment period and up to two years after its termination, the foreign seconding Company has to fulfil various obligations, together with the obvious burden of continuing to pay the worker[2] . For what concerns salary, since the employment relationship is kept with the Company of origin (so-called seconding) during the whole period of secondment, the burden of remuneration will lay on the latter
Conclusions: is it possible to apply for a Representative Office Visa?
In light of the above, it is clear how the Intra-Company Visa procedure through the establishment of a Representative Office cannot be considered as a “facilitated” way to move to and work in Italy, nor an accessible path for major shareholders directors of foreign companies.
On the other hand, whether a company with registered office in a non-EU country has the real intention to move its own employees to Italy to carry out promotional activities, or scientific or trade research, it should do it through the establishment of a representative office and the procedure for the obtaining of an Intra-Company Visa and Residence Permit for its employee/s.
For further in-depth analysis on this kind of Visa and Residence Permit, and on the consequent legal obligations upon the seconding Company, you can read the extended version of this article:
Written by Pietro Derossi and Maria Cherubini
[1] Directive 96/71/EC, article 2, paragraph 1: “the seconded employee is a worker who, for a limited period, carries out his/her work on the territory of a member State different than the one where he/she regularly works”.
[2] Legislative Decree 136/2016, Article 10, paragraph 3.
