Growth and Innovation. On October 4, 2012
the Italian Government passed a new bill offering innovative
start-ups, researchers and investors a vast array of legal
and tax instruments aimed at fostering growth and innovation, and
attracting investment capitals to Italy. The bill is the latest of
a series of measures enacted by the Italian Government to spur
investments in innovative and technologically advanced fields, thus
stimulating growth in strategic industries. The stimulus package is
expected to enter into force within the next few weeks.
Innovative Start-ups. The new stimulus
measures apply to innovative start-ups that meet the following
The majority of capital must be owned by individuals;
The corporate seat must be located in Italy and the company
must be incorporated and active for no longer than 48 months;
Revenues per year, starting from the second year of activity,
must not exceed €5 million and there must be no distribution
The sole corporate mission must be to develop and manufacture
highly technological innovative products or services;
The company must not originate from a merger, a demerger or
transfer of business;
R&D expenses must be at least equal to 30% of the total
expenses or revenues, whichever is higher;
At least one third of employees must be PhDs, PhD candidates or
The company must be owner or licensee of protected intellectual
Incubators. The stimulus package also
applies to certified incubators, i.e., entities providing services
to start-ups, including use of premises, facilities, consulting
Corporate benefits. Start-ups will be
granted an extended timeframe for covering losses as compared to
ordinary companies (two fiscal years; one if losses caused the
corporate capital to decrease below the statutory minimum).
Start-ups incorporated in the form of limited liability
companies will be able to issue participations with limited,
non-proportional or no voting rights, and different categories of
quotas may be freely created: these are all options previously
reserved to corporations. Further, limited liability companies will
be entitled to offer to the public their quotas and may issue
financial instruments. An online "crowdfunding" platform
will be created to incentivize public investment in innovative
Lastly, start-up companies will be exempted from the payment of
fees and duties due to the Companies Register.
Tax incentives. Tax incentives have been
introduced for individuals and legal entities investing in
innovative start-ups. Stock option plans for employees, directors
or collaborators will also be subject to a more favorable tax
Employment flexibility. It will be easier
for start-ups to create temporary job positions: the requirements
set forth by Italian law for the employment of fixed-term personnel
will be automatically deemed to be met in case of innovative
start-ups. Fixed-term employment contracts may last up to 36 months
and may be renewed one or more times within such timeframe. The
contract term may be extended up to 48 months, if the employment
contract is executed before the competent labor office.
Bankruptcy protection. Innovative
start-ups are not subject to ordinary insolvency proceedings, but
rather to the specific bankruptcy protection granted by Italian law
to over-indebted small businesses and individuals, which entails
the possibility to reach a debt-restructuring agreement with
creditors under Court supervision. Start-up shareholders will also
not be subject to personal bankruptcy sanctions and will be to a
certain extent shielded from public disclosure.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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