Are you about to enter a new market? More specifically the Italian market? Have you read our previous blog about setting up a legal entity vs. registering as a foreign employer? If you are interested in a straightforward and light touch solution, registering as a foreign employer and running payroll locally, without setting up a local business entity could be the best choice for your company. Adopting this approach to payroll does not constitute a permanent establishment in Italy and below you will find a general outline of the process.
Legal Representation and Tax Code
Before registering as a foreign employer in Italy, you need to appoint a social security representative (just like in Spain, see previous blog) who is either an Italian resident or has a legal presence in Italy. This representative will act on behalf of your company in dealings with Italian authorities and is responsible for the payment on social security charges on behalf of the employer. In addition to appointing a social security representative you also need to obtain a tax code (codice fiscale) for the legal representative and for the company itself. This is a unique identifier for tax purposes in Italy.
Registering at Relevant Social Security and Employment Related Authorities
As an employer, you need to register with INPS (Istituto Nazionale della Previdenza Sociale), which is the Italian social security institute. Registering with them is necessary to fulfil your social security obligations for your employees. Notice that if you are hiring foreign workers, you need to register them separately with INPS. There are specific requirements for hiring foreign workers in Italy, including work permits and residency permits.
Furthermore you will need to register with INAIL (Istituto Nazionale Assicurazione Infortuni sul Lavoro), which is the Italian national institute for insurance against workplace accidents. This will cover your employees for workplace accidents and occupational diseases.
Depending on your business activities, you may need to register for VAT (value added tax) in Italy. This is necessary if you are providing taxable goods or services in the country.
Legal and Regulatory Compliance
As an employer in Italy, you are required to keep detailed records of your employees, including contracts, salary payments, working hours, and any other relevant information. Bear in mind that the specific process and requirements for registering as a foreign employer in Italy may vary depending on factors such as the nature of your business, the number of employees you intend to hire, and your country of origin. Therefore, it is essential to research and seek guidance tailored to your specific situation.
Staying informed about Italian labour laws and regulations is important. By monitoring updates from regulatory authorities and seeking legal advice when necessary, you will help ensure ongoing compliance with Italian legal requirements.
By addressing these considerations you can navigate the process of registering as a foreign employer in Italy and establish a compliant and successful presence.
Internago is your trusted partner, supporting you in all steps of registering as a foreign employer in Italy. We also provide international and local payroll and bookkeeping services.
Interested in learning more? Please visit Internago or our Payroll Portal. For further inquiries, contact us at info@internago.com.
