INTERNATIONALIZING WITH SAP: THE BRANCH COMPANY

When a company is ready to start an internationalization process to reach foreign markets that it has not yet reached, be it EU or non-EU countries, there are a number of requirements to be met in order for the development of a new market area to be successful.

The way forward depends on several factors, first and foremost the type of business. The management system, however, can provide numerous tools to support this process. SAP, the most innovative information system on the market, able to manage multilingual, multi-country and multi-company business activities, offers two important macro solutions to companies that want to start business activities abroad regarding the two main organizational structures through which an Italian company can set up abroad:

  • Subsidiary company: with this solution, one or more subsidiaries are created in the country in which the company intends to operate, with all the advantages and functionalities of SAP, including the possibility of having a combined view of the different companies within the same system. All information and data are linked, shared and integrated in real time, even though the companies are legally separate. In addition, SAP offers solutions for intercompany processes that systematize and speed up the flow of information for a streamlined and efficient management.
  •  Branch company: this is a simpler configuration in which the VAT number abroad is not truly independent, but rather refers to the Italian parent company. In this case, therefore, SAP offers the possibility of exploiting plant abroad. With this solution, in other words, it is not necessary to create a new company, but the use of a newly created division is exploited, to which a VAT number is linked in the country in which the company intends to operate. Through this option, therefore, it is possible to fulfil all tax obligations in the country in which one operates (VAT registers, purchases, sales, etc.) without, however, having to bear the burden of creating a new company.  

The solution defined as a branch company, or permanent establishment, is obviously much more streamlined and easier to manage: faster implementation times, lower investment required, centralized management control by the parent company. In other words, thanks to SAP, today your company can open up to the world without the need for complex bureaucratic procedures and huge investments: thanks to the branch solution, in fact, it is possible to fulfil all fiscal and legal commitments, with all the information and management advantages promoted by SAP.

If you are thinking of opening a branch in an EU or non-EU country, contact Software Business to learn more about the most advantageous solutions by SAP!