The Italian legislation in support of innovative startups

The measures adopted by the Italian Government since 2012 with the Decree-Law 179/2012 aim to promote sustainable growth, technological advancement and to create favourable conditions for the development of a new business culture inclined towards innovation. Other explicit goals of this policy are enhancing social mobility and generating new employment, especially for the youth. A constant attention during the years has been inspired by the mentioned decree, which is considered a milestone and is also known as “Decreto Crescita 2.0” (“Growth Decree 2.0”) on “Further urgent measures for Italy’s economic growth”, converted into Law 221 the 18^th December 2012.

The Decree has introduced into the Italian legal system a definition of a new innovative enterprise of high technological value, also known as “innovative startup”.

Analyzing the extensive regulatory framework arranged in favour of this type of company must be highlighted the absence of any sectorial or age-related restriction for the entrepreneur, as it is commonplace in other national legislations. A framework “for everyone”, dynamic and coherent with the goals of Italy’s industrial development. The Italian legislation in support of innovative startups, far from being static, has been strengthened in the last few years by several subsequent legislative interventions. The Decree-Law 76/2013, known as “Decree on Labour” and the Decree-Law 3/2015, known as “Investment Compact”, and the Budget Law for 2017 (Law 232/2016), have improved and broadened the range of benefits in favour of innovative startups provided in the original act.

At the same time, additional recent normative provisions, although not part of the Italian Startup Act in a strict sense, have nevertheless vastly enriched the overall legislation, first of all the National Plan “Industria 4.0”, whose benefits may be cumulated with.

Before analyzing the main benefits of the policy is necessary to clarify which startup may be defined “innovative” and which subjective requirements must be held. Following the legal framework at art. 25 of the Decree-Law 179/2012, «to the favourable measures can access companies with shared capital (i.e. limited companies, “società di capitali”), including cooperatives, whose capital shares – or equivalent – are neither listed on a regulated market nor on a multilateral negotiation system. These enterprises must also comply with the following requirements»:

1. be newly incorporated or have been operational for less than 5 years (in any case, not before 18 December 2012);
2. have their headquarters in Italy or in another EU country, but with at least a production site branch in Italy;

• have a yearly turnover lower than € 5 million;

1. do not distribute profits;
2. have as exclusive or prevalent company object – as stated in the deeds of incorporation – the production, development and commercialization of innovative goods or services of high technological value;
3. are not the result of a merger, split-up or selling-off of a company or branch;

• the innovative character of the enterprises is identified by at least one of the following criteria:
  1. at least 15% of the company’s expenses can be attributed to R&D activities;
  2. at least 1/3 of the total workforce are PhD students, the holders of a PhD or researchers; or, alternatively, 2/3 of the total workforce must hold a Master’s degree;
  3. the enterprise is the holder, depositary or licensee of a registered patent (industrial property), or the owner and author of a registered software

One of the first benefits for the innovative startups is the incorporation and following statutory modifications by means of a standard model with digital signature free of charges.

The constitution deed is filled in XML format and, notwithstanding being a standard model, it allows thorough checks and a sufficient degree of personalization which will guarantee an “on size” solution. Furthermore, it will give the chance to get future integrations without costs, and cuts from the payment of stamp duty and fees incurred due to the obligation of entering the Business Register, as well as from the payment of the annual fee usually owed to the Chambers of Commerce.

For innovative start-up incorporated as LLC (as an exception to the ordinary discipline) it is, moreover, allowed to: i) create categories of shares with particular rights (e.g. the creation of shares without right to vote); ii) execute operations on their own shares; iii) issue financial issue participative instruments and offer capital shares to the public.

The last aspect, related to the financial side, has to be regarded as an added value that aim help this kind of enterprise, notoriously refrained by the market due to an incredibly high “failure rate”, that at the global rate is around the 90%.

A first solution in order to cope with such difficulties has been provided by the crowdfunding regulation, the first in the world. This regulation made possible to acquire capital by exhibiting the startup’s project to potential investors throughout authorized websites. For more information it is possible to look at the Consob regulation 18952/2012 as modified by the statement 18952 dated 26/06/2013. On this front many benefits have been provided, as – for example – the exemption from the investment service regulation’s fees.

Many other advantages have been renewed by the law on budget (“legge di bilancio”) 232/2017 which confirm the aim of the lawmaker to pursue this process of “growth of talents” in the Country, both in terms of access to the credit and fiscal benefits thanks to ad hoc rules; such as the exemption from the duty to affix the compliance visa for compensation of VAT credit and fiscal incentives to invest on innovative Start-up.

For more informations: legale@studiocorno.it