There are a few options available when it comes to hiring a remote worker or a remote team in Italy.
The first is of course to open an entity in Italy and start operating either as a branch of the foreigner company, or as an Italian company often in the form of SRL or Società a Responsabilità Limitata (Private Limited Company).
The pros of this solution is that once established, the company (or branch) can operate compliantly in Italy and hire as many workers as needed and own the employment relationship.
The cons however are not insignificant. The company must in fact find an attorney, an accountant and a payroll firm to guide them thought the entire process and manage the entire administrative side of the business. This step alone is not an easy one as it takes time (up to 12 months) and it might be very costly for the client if you think about all the paperwork that must be done in Italian and translated in the language of the company (power of attorney, Constitutive Act, employment contract, local bank account, mandatory certified email, mandatory electronic invoicing system, etc.).
We would recommend this solution to companies that want to obtain the right visibility in Italy and that want to trade freely in the country. This solution would suit clients who need to hire 5 + workers and have permanent establishment in Italy.
The second option for a foreigner company that want to hire a remote worker in Italy, is the so-called “Rappresentante Previdenziale” (Social Security Representative). That is to nominate a local representative that can pay social security contributions on behalf of the foreigner employer.
The advantage of this model is that the employer is not subject to local corporate taxation while it can still own the employment relationship.
Disadvantages are still there however, as the risk of permanent establishment and the inability to withhold tax at source for your employees.
The third option is to engage with an EOR (Employer of Record) firm who can employ remote workers on behalf of he client in Italy.
Certainly the main benefits of using this model is the turnaround time (as short as 24 hours), the simplicity of the solution and the relatively low and controllable costs.
The main drawback of using EOR is the fact that the foreigner company is giving away the ownership of the employment relationship and the possibility to offer equal company benefits and shares.
The good news is that at PeoItaly we can help you with all the above.
For more information feel free to contact us on email@example.com