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Innovative Start Up Company: an Italian opportunity

Innovative Start Up Company

Innovation, R&D (research and development) and digital growth has become a main issue in every economic environment.

Aware of that crucial role played by the technological development Italian Government, has introduce since 2013, a specific set of rules (known as StartUp Act) in order to facilitate and support the birth and the growth of new “innovative” enterprises, stimulating the environment for such strategical kind of human and economic “assets”.


What is an Innovative StartUp?

The StartUp Act introduces a definition of “Innovative StartUp”, referring to it as a new enterprise (so not arose from M&A procedures) incorporated as a LLC (Limited Liability Company), who aims to develop or produce technological products or services, where technological refers to the way the service is provided, or inherent features of the product.

In addition to the abovementioned prerequisite, innovative StartUps needs to meet the following criteria:

  • Less than 60 months from the incorporation;
  • Italian headquarter or at least operational headquarter located in Italy;
  • Revenues/year below euro 5 million;
  • Inhibition from dividend distribution;
  • Main activity is development and/or production of highly technological services or products;
  • Has to meet at least one of the following:
    • Higher within 15% of revenues or total cost has to be spent in R&D;
    • Work force at least 1/3 Ph.D., or 2/3 master graduated;
    • IPR ownership.

Innovative StartUp’s benefits

Innovative StartUp may benefit of a series of benefits regarding business and corporate law, lean (but slow) incorporation procedures, tax benefits for investors and specific bankruptcy procedures.

Let’s see some of this features:

  • Incorporation procedures: Notary certification is not required (is mandatory otherwise), with a significant saving in terms of money, but not in terms of time as it may require some weeks or months to fulfill an incorporation;
  • Even if a LLC is required, it is possible to issue “shares” in order to reward employees or suppliers (Work for Equity), even allowing companies to issue non-voting “shares” (forbidden otherwise);
  • Tax clearing is easier and tax certifications are required for higher than ordinary limits (euro 50.000 instead of ordinary euro 5.000);
  • Opportunity to benefit from soma flexible employment contracts for longer than usual;
  • Tax benefits for investors (30% tax credit for individuals, 30% increase on fiscal cost for enterprises)
  • “Fail fast” procedures, in order to simplify bankruptcy for this kind of enterprises with a higher risk profile.

Studio Ferrari e Associati will be glad to support and give advice in your new Italian business venture. We may provide Tax, Business and Legal consultancy, in order to help you and your business from the rise to growth to turnarounds.