The Italian Government has approved Law Decree, No. 179 of 18 October 2012, which has been published in Official Gazette No. 194. The Decree introduces incentives for innovative start-up companies, to encourage economic growth.
For the first time the decree provides a legal definition of a start-up company. These are defined as firms which are not listed on a stock exchange, are resident and subject to taxation in Italy, and have as their objective the development of innovative high-technology products or services. However, it has been emphasized that start-up companies can be set up in various sectors including most traditional productive sectors. To qualify they should be owned at least 51% directly by individuals; have been established for not more than four years; should not have been formed following a merger or corporate sale; must have a business turnover not greater than EUR5m (USD6.5m); and should not be paying dividends.
In addition, a start-up company should satisfy at least one of the following criteria: research and development expenditure amounting to at least 30% of the greater of total costs and value of production; employ highly-qualified individuals amounting to at least one third of its total employees; or be the holder or licensee of, for example, a trademark connected to its productive activity.
It is also agreed that, for the three fiscal years 2013 through 2015, both individual and corporate investors in a start-up business will be able to deduct from their taxable income a part of the amount so invested, either directly or by way of specialized start-up funds. Formation expenses of a start-up company will also be reduced by exempting these companies from stamp duties and registration fees, while annual fees due to the Chamber of Commerce would also be abolished.
After four years of operation, or if any of the other start-up conditions are exceeded in the intervening period, the above benefits would be revoked and the company would continue its operations under normal corporate regulations.
