1. Definition and requirements

Recently in Italy it was introduced a new type enterprise, the “innovative startup”, in order to attract talent and capital, both Italian and foreign, and to foster innovation (art. 25 of Decreto Legge, October 18,
2012, n. 179).

To qualify a company as an “innovative startup” are provided the
following requirements:
1. Formal requirements:
a. the company must be a corporation or cooperative society, Italian or European company resident in Italy;
b. shares in the capital should not be listed.
2. Substantial requirements:
a. the company must be constituted and carry out business activities no more than four years;
b. the majority of the shares in the share capital and voting rights must be held by individuals at the time of the constitution and for the next two years;
c. the company should not distribute or have distributed profits;
d. the company must not have been formed by a merger, division or company as a result of sale of the company or business unit;
e. the company must have its principal place of its business and affairs in Italy;
f. the total value of the annual production of the company, should not be more than € 5 million;
g. the object of the company must be the development, production and marketing of innovative products or services with high technological value.

2. Special Section of the Company Register

The innovative startup must be enrolled in the Special Section of the Registry of Companies in order to get the benefits of the law and the publicity of the initiative (art. 25, paragraph 8, DL 179/2012).

3. Exemption from charges for start

For the first four years, the innovative startup will not pay the stamp duty, the administrative fees for enrollment in the Special Section of the Registry of Companies and the annual fee to the Chamber of Commerce.

4. Exceptions to the company law

There are several exceptions to the corporate legislation in favor of innovative startups provided from art. 26 DL 179/2012:
1. the constitution act of innovative startups of the limited liability company may:
a. create classes of shares with different rights;
b. determine the content of different shares;
2. the shares held in innovative startup incorporated as a limited liability company may be the subject of a public offer of financial products;
3. the constitution act of innovative startups can provide for the issue of financial instruments with equity rights or even administrative rights;
4. is admitted the possibility of postponing the second year of operation the reduction of the share capital in the event of a loss less than 1/3 for innovative startups;
5. in case of a reduction of share capital below the legal minimum, it is allowed to the shareholders to postpone the end of the year following the resolution to reduce the capital and the simultaneous increase of the same to an amount not less than legal minimum.

5. Tax and contributory facilitated in favor of incentive plans

The DL 179/2012 provides that the labour income arising from the allocation to the directors, employees or continuous collaborator of financial instruments or of any other similar right or incentive, as well as from the right option granted for the purchase of related financial instruments does not contribute to the formation of the taxable income for both fiscal and contributory.

6. Incentives to investment ex DL 179/2012

Art. 29 for the years 2013, 2014 and 2015 provides that: 1. is allowed to deduct the tax on natural person income an amount equal to 19% of the amount invested by the taxpayer in the capital of one or more innovative startups; 2. not contributes for the formation of taxable income of the companies – different from innovative startup companies – 20% of the amount invested in the share capital of one or more innovative startups.

Art. 30 DL 179/2012 introduced the regulations for raising venture capital through online portals from innovative startups. The “online portal for raising capital for innovative start-ups” is defined the online platform which has the sole purpose of facilitating the collection of risk capital from the innovative startups.

To facilitate access to finance innovative startups can benefit from the intervention of the Central Guarantee Fund for small and medium-sized enterprises in a free and simplified way determined by the Ministry of Economic Development.

7. Financial aid for the recruitment of staff

The contribution by the tax credit for new hiring of highly qualified members is applied either to the innovative startups (Art. 27bis DL 179/2012).

For such companies, the application of the contribution is simplified because: 1. the tax credit is granted as a priority over other companies; 2. the application for obtaining the tax credit is drawn in a simplified form; 3. the tax credit is granted to highly qualified staff which have permanent contracts.

8. Composition and crisis management firm innovative startups

The innovative startup can not be subjected bankruptcy proceedings except in special cases and during the first four years of “life”. The legislature removed the innovative start-up to the discipline of bankruptcy cause the great risk of a company included in an investment in activities with a high level of innovation.

Publisher: Studio legale Poli