Persons resident in Italy are often contacted directly by German companies for the purpose of penetration and expansion in the Italian market. If they wish to work in Italy for a German (or Austrian) company and, hence, for a foreign company, they will have to check if the company is duly registered in Italy. After doing so (e.g. by registration as an employer or by incorporation of a limited liability company under Italian law), an employment agreement in accordance with Italian law and payroll processing in compliance with Italian law needs to be established.
Working from home, service personnel, field staff, sales consultants? Things to consider
Besides the above-mentioned registration, remote office workers will not have to consider many other things. In fact, the place of residence will be registered as workplace (also for insurance purposes) and the remote worker, like any other employee, will have to abide by the rules laid down by the employer. The only difference is that the remote worker performs all or part of his work from home. In general, the work equipment and working materials (e.g. computer, printer, mobile phone, stationery) are provided by the employer, unless otherwise agreed. However, expressly regulated working hours apply. Moreover, a trusting relationship between both parties is obviously advantageous, as it is impossible or difficult to control the actual working time of the employee. However, the remote worker does not have to be available at any time.
In the case of service personnel/field staff (e.g. help desk personnel, programmers, maintenance staff), the employee's place of residence is normally considered for the purpose of registration of the place of work, as the German employer often does not have or need a secondary office in Italy. Since service personnel/field staff sometimes need to travel to customers/suppliers, the company often provides a company car or the employees use their own private car, charging the costs to the employer on a pro rata basis. In Italy, vehicle regulations and laws are very complex and subject to constant change. Hence, they need to be checked carefully together with the tax consultant/payroll consultant.
One case in point is that of sales representative/sales force. In fact, their work mainly consists of sales promotion and expansion in Italy and they often get better contractual conditions. Under the OECD Model, employees who play a key role in sales, even if they do not participate in the conclusion of final contracts, constitute a personal permanent establishment. In this case, the company shall register in Italy (usually under the business name "XY Italy Srl"). Hence, the employees will carry out their work for the Italian company.
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