The document discusses setting up a startup in Italy. It outlines the legislative framework established by the Italian government to promote startup creation, including the Decreto Startup law passed in 2012. The law defines innovative startups and provides benefits such as tax incentives and simplified bankruptcy procedures. It also discusses how to legally form a startup company as a limited liability company and register it with the required Italian agencies. Finally, it covers common types of labor agreements for hiring employees.

1. Set up a startup in Italy
Frieda Brioschi / Emma Tracanella
frieda.brioschi@gmail.com / emma.tracanella@gmail.com
IED
Lesson 2/2014

2. 2. Set up a startup in Italy
Course program
1. Italian Startups
2. Set up a startup in Italy
2

3. 2. Set up a startup in Italy
Today's table of content
1. Legislative framework: Decreto Startup, etc.
2. Labour agreements
3

4. 2. Set up a startup in Italy
Italian startups: quick recap
Past slides available on Slideshare @ubifrieda:
https://www.slideshare.net/ubifrieda/
4

5. 2. Set up a startup in Italy
Italian startups: quick recap
During last lesson we analyzed many different
companies started from 1995 to 2011: most of them are
“alive and kicking”, few disappeared, a couple were re-
started.
5

6. 2. Set up a startup in Italy
Italian startups: quick recap
What we learnt from those experiences:
• Time-to-market <= 2 years
• Funds availability doesn’t really make the difference
• Acquiring or be acquired could be a measure of
success
• Passion and team are core values
• Never ever ignore your customers!
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7. 2. Set up a startup in Italy
The new law
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8. 2. Set up a startup in Italy
Decreto Crescita bis
On 4th October 2012, the Italian Government approved a
Law Decree on “Further urgent measures for Italy’s
economic growth”.
Section IX of the Law Decree (articles 25 to 32) provides
for specific measures which are aimed at promoting the
creation and development of startups.
This is the first time the Italian legislation deals with such
companies.
8
http://bit.ly/XAK87g

9. 2. Set up a startup in Italy
Decreto Crescita bis
After being approved by the Italian Government, the Law
Decree was signed by the President of the Republic and
published in the Official Journal (Decree Law no. 179,
18th October 2012).
9
http://bit.ly/XAK87g

10. 2. Set up a startup in Italy
Start-Up Regulation
On December 13, 2012, the Law Decree no. 179 was
modified by the Parliament and subsequently converted
into law (the Start-Up Regulation).
10
http://www.lw.com/thoughtLeadership/boosting-innovative-start-ups-italy

11. 2. Set up a startup in Italy
Start-Up Regulation
The Start-Up Regulation provides a new set of rules
promoting the creation and development of innovative
startups with a view to encouraging innovation and
strengthening of enterprises’ competitiveness.
It derives from the report by the task force on startups
established by the Minister of Economic Development.
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12. 2. Set up a startup in Italy
General idea
Over time, Italy has demonstrated that it is able to develop by
exploiting some of its great strengths:
• clothing and fashion,
• furniture,
• automation technology and mechanics,
• food and wine industry.
It has created and developed companies that can sell their best
products around the world. In many cases they have even become
global leaders.
12
http://www.sviluppoeconomico.gov.it/images/stories/documenti/startup_eng_rev.pdf

13. 2. Set up a startup in Italy
Looking overseas
In the last 10 years, startups have generated 3 million
jobs in the United States.
President Obama launched Startup America which
"moved" the equivalent of 1 billion dollars in business
services.
Why are they doing this? Because they are aware of the
fact that, nowadays, 40% of the wealth in the US is
produced by enterprises that did not even exist 30 years
ago.
13
http://www.sviluppoeconomico.gov.it/images/stories/documenti/startup_eng_rev.pdf

14. 2. Set up a startup in Italy
What’s a startup?
An enterprise that has been established recently
Whose goal is to develop, produce and market certain
goods or services
These products are the results of research, or the
company uses a high rate of innovation in its activity
Startups do not pertain just to the digital world, but are
established across all sectors
14
http://www.sviluppoeconomico.gov.it/images/stories/documenti/startup_eng_rev.pdf

15. 2. Set up a startup in Italy
Definition of an
innovative startup
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16. 2. Set up a startup in Italy
Innovative startups/1
It is owned directly and for at least a 51% share by
individuals, also in terms of voting rights.
16
http://startup.registroimprese.it/

17. 2. Set up a startup in Italy
Innovative startups/2
It must have been established for no longer than 48
months.
17
http://startup.registroimprese.it/

18. 1. 2. Set up a startup in Italy
Innovative startups/2bis
For the startups which have not
yet been running for 48 months,
but which already exist, the 48-
month period would start when
the package is adopted.
However, startup support
measures should no longer
apply when a startup enters its
6th year.
18
http://www.sviluppoeconomico.gov.it/images/stories/documenti/startup_eng_rev.pdf

19. 2. Set up a startup in Italy
Innovative startups/3
It must reside or be subject to taxation in Italy.
19
http://startup.registroimprese.it/

20. 2. Set up a startup in Italy
Innovative startups/4
It has no turnover or has a turnover that does not exceed
5 million euros.
20
http://startup.registroimprese.it/

21. 2. Set up a startup in Italy
Innovative startups/5
It does not distribute profits.
21
http://startup.registroimprese.it/

22. 2. Set up a startup in Italy
Innovative startups/6
Its core business consists of innovative goods or
services of high technological value.
22
http://startup.registroimprese.it/

23. 2. Set up a startup in Italy
Innovative startups/7
It shall not result from the merger, division or transfer of
business from a going company.
23
http://startup.registroimprese.it/

24. 2. Set up a startup in Italy
Innovative startups/8
EITHER
15% of its costs are related to R&D
OR
at least 1/3 of the team is made up of people who either hold a
PhD or are PhD candidates at an Italian or foreign university or at
least 2/3 of the team is made up of people holding a Master’s
degree or have conducted research for at least 3 year
OR
it is the owner or the licensee of a patent or a registered software.
24
http://www.mise.gov.it/images/stories/documenti/Executive-Summary-of-Italy's-new-policy-on-start-ups.pdf

25. 2. Set up a startup in Italy
Side definition: social goals
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26. 2. Set up a startup in Italy
Startups with a social goal
• same requirements that apply to ordinary startups
• operates in some specific domains
• its domain must have a considerable social value
!
Examples of domains are social inclusion, fight to
marginalization of disabled persons, environmental
protection etc.
26
http://bit.ly/13PFWUI

27. 2. Set up a startup in Italy
Why social startups?
Startups with a focus on the social dimension generally
tend to adopt business models that may be less
attractive for investors.
Their reason of being is to answer society’s needs first
and foremost, along with market ones.
Thus, they have lower returns on investments and fewer
chances to develop when compared to “ordinary”
startups.
27
http://www.sviluppoeconomico.gov.it/images/stories/documenti/startup_eng_rev.pdf

28. 2. Set up a startup in Italy
Social area
• Welfare
• Healthcare
• Education
• Vocational training
• Protection of the environment
• Cultural heritage
• Sustainable tourism
• Undergraduate and postgraduate education
• Research
• Cultural services
• …
28
http://www.sviluppoeconomico.gov.it/images/stories/documenti/startup_eng_rev.pdf

29. 1. 2. Set up a startup in Italy29

30. 2. Set up a startup in Italy
Movie Reading
http://www.youtube.com/watch?v=Jbjxuyd_DSA
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31. 1. 2. Set up a startup in Italy31

32. 2. Set up a startup in Italy
HelpTalk
http://vimeo.com/49388177
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33. 2. Set up a startup in Italy
Benefits for innovative
startups
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34. 2. Set up a startup in Italy
Advantages/1
• No setup costs
(unlike most companies, startups do not have to pay
anything for their own creation and registration)
• No stamp duties and fees paid for issuing documents
• Notary public services free of charge for under 35s
• No Chamber of Commerce annual fee
34
http://bit.ly/13PFWUI

35. 2. Set up a startup in Italy
Advantages/2
• Special financial instruments for debt management
• Extension by 12 months of the so-called “loss carry-
forward period” (rinvio a nuovo delle perdite), to better
absorb the whole initial operation running at loss
• Postponement of the recapitalization obligations to the
following financial year when needed to protect the
share capital
Ask your financial consultant!
35

36. 2. Set up a startup in Italy
Advantages/3
• Simplified procedure for bankruptcy
• Basically an exemption from bakruptcy procedures,
innovative startups are subject only to the so-called
“over-indebtedness procedure”.
!
This shorten judicial liquidation, reducing consequences
from a bankruptcy procedure on the entrepreneur
reputation.
36
http://bit.ly/13PFWUI

37. 2. Set up a startup in Italy
Advantages/4
• Startups can hire personnel through fix-time contracts (6 to
36 months).
• Contracts can be renewed more than once.
• After 36 months, the contract can be further renewed for just
one more time, for no longer than 12 months, i.e. the total
duration of the contract must not exceed 48 months.
!
After that, the employee can keep on working for the startup
exclusively with an open-ended contract.
37
http://bit.ly/13PFWUI

38. 2. Set up a startup in Italy
Advantages/5
Start-ups can remunerate their team members and the
providers of external services, including lawyers and
accountants, with STOCK OPTIONS and WORK FOR
EQUITY respectively.
The tax system applicable to these instruments is
advantageous and is tailored on the most common
needs of a startup.
38
http://bit.ly/13PFWUI

39. 2. Set up a startup in Italy
Advantages/6
Tax incentives for corporate and private investments in
startups for the years 2013, 2014, 2015 and 2016, both
for direct investments in startups and in case of indirect
investments (by the means of other companies investing
predominantly in startups).
Tax concessions are greater if the investment concerns
startups with a social goal or those operating in the
energy sector.
39
http://bit.ly/13PFWUI

40. 2. Set up a startup in Italy
Advantages/7
Introduction of crowdfunding.
CONSOB has published a “Regulation on the raising of
venture capital by innovative start-ups through on-line
portals”, thanks to which Italy has become the first EU
country to have introduced a structured legislation on
equity-based crowdfunding.
(still underway: there’s a missing law)
40
http://bit.ly/13PFWUI

41. 2. Set up a startup in Italy
Advantages/8
Credit deriving from tax return: priority access is granted to
facilitations for the employment of highly qualified personnel in
innovative start-ups and certified incubators.
41
http://www.mise.gov.it/images/stories/documenti/Executive-Summary-of-Italy's-new-policy-on-start-ups.pdf

42. 2. Set up a startup in Italy
Fiscal Incentives
Fiscal incentives in 2013-2016 time frame for investors:
• natural person: 19% tax credit (IRPEF), up to 25% for
innovative startups with a social goal. Max
investment: 500.000 €/year. Every investment must
last at least 2 years.
• company: 20% tax credit (IRES), up to 27% for
innovative startups with a social goal. Max
investment: 1.800.000 €/year. Every investment must
last at least 2 years.
42
http://www.gazzettaufficiale.it/eli/id/2014/03/20/14A02246/sg

43. 2. Set up a startup in Italy
Advantages/8
Fast-track, simplified and free-of-charge access for
startups to the Fondo Centrale di Garanzia, a
Government Fund that supports access to credit through
guarantees on bank loans.
43
http://bit.ly/13PFWUI

44. 2. Set up a startup in Italy
Advantages/9
More targeted and tailored support to the process of
internationalisation of startups provided by the Italian
Trade Promotion Agency (“ICE”). Support includes
assistance in the legal, corporate and fiscal activities,
real estate and credit matters.
Support measures include free-of-charge participation to
international fairs and events, as well as to international
activities the aim of which is to favour the matching
between innovative start-ups and potential investors for
the phases of early stage capital and expansion capital.
44
http://bit.ly/13PFWUI

45. 1. 2. Set up a startup in Italy
And then?
• Found a limited company
• Send notification of setting up
of business
• Register at an online directory
created for this purpose at
the Chambers of Commerce
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46. 2. Set up a startup in Italy
Limited companies
• joint stock companies (società per azioni),
• share partnership companies (società in accomandita per azioni)
• limited liability companies (società a responsabilità limitata)
• simplified limited liability company (società a responsabilità
limitata semplificata)
• limited liability companies with reduced share capital (società a
responsabiltà limitata a capitale ridotto)
• cooperative companies (società cooperative)
46

47. 2. Set up a startup in Italy
Statutory minumum capital
• S.p.A. and S.a.p.A.: €120,000
• S.r.l.: €10,000.
• S.s.r.l. and S.r.l.c.r.: > €1 and < €10,000.
47

48. 2. Set up a startup in Italy
S.r.l. group
• company needs to be registered with different
institutions (the tax office,the companies registry,
INPS, INAIL)
• registration can be done using ComUnica online
• all this has to be done via notary public
48
http://www.registroimprese.it/comunica#tab=cosa&under-tab=corsi

49. 2. Set up a startup in Italy
S.r.l. obligations
• pay an annual tax on company books,
• issue a company valuation report,
• pay tax for lodging the minutes of a meeting every
time profits are distributed;
• pay for a tax advisor;
• pay taxes on the registration of the transfer of shares
from one business partner to another
49

50. 2. Set up a startup in Italy
Liquidation
• It is the process by which a company is brought to an
end, and the assets and property of the company
redistributed.
• Liquidation may either be compulsory or voluntary.
50
http://en.wikipedia.org/wiki/Liquidation

51. 2. Set up a startup in Italy
Reasons for liquidation
A liquidation or a dissolution may occur for:
• Term elapsed
• The company has reached the business purpose or the object can't be
reached
• Unable to operate
• Statutory minumum capital less than legal minimum
• Assembly resolution
• Other reasons according to the bylaws
There’s no limit to the length of a liquidation
51

52. 2. Set up a startup in Italy
Bankruptcy
It is a legal status of a company that cannot repay the
debts it owes to creditors. Often bankruptcy is imposed
by a court order, but can be voluntary too.
Bankruptcy can be a consequence of insolvency. All
assets of the debtor are liquidated under the
administration of a official receiver.
52
http://it.wikipedia.org/wiki/Fallimento_(ordinamento_giuridico_italiano)

53. 2. Set up a startup in Italy
Labour agreements
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54. 2. Set up a startup in Italy
Fornero’s labour law
• Apprenticeship
• Co.co.pro (contract work)
• Freelance (VAT number)
• Freelance (Minimum taxpayer regime)
• Occasional work
• Fixed term agreement
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55. 2. Set up a startup in Italy
Apprenticeship agreement
• Job & training
• age: 18-29
• Total employee cost low
55

56. 2. Set up a startup in Italy
Co.co.pro
• Define a detailed project with expected results
• No trial period
• Total employee cost about 150% net salary
56

57. 2. Set up a startup in Italy
Freelance
Often in Italy freelances are used as regular employees.
After Fornero’s law a freelance is considered fake if:
• earns <€18,000 gross
• collaboration lasts more than 8 months for at least 2 successive years
• salary > 80% of total income for at least 2 successive years
• freelance has a “fixed” desk in the company
!
This does not apply to everyone subscribed to a professional register
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58. 2. Set up a startup in Italy
Minimum taxpayer regime
It’s a simplified VAT number regime.
• no IRAP, no IRPEF. Fixed taxation: 5% for 5 years
• no VAT at all (no compensation)
• earns <€30,000
• no employees neither collaborators
• available just for new business
!
5 years limit does not apply to <30 years.
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59. 2. Set up a startup in Italy
Occasional work
• earns <€5,000
• no more than €2,000 from each customer
• fixed taxation: 20%
59

60. 2. Set up a startup in Italy
Fixed term agreement
• Lasts <= 36 months
• Can be briefly extended (30 dd if it last <6 months, 50
dd otherwise)
• Compulsory break between two contracts (60 dd if it
last <6 months, 90 dd otherwise)
• Total employee cost equal to open ended employee
agreement
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61. 2. Set up a startup in Italy
Intellectual property
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62. 2. Set up a startup in Italy
IP
Intellectual property (IP) is a legal concept which refers
to creations of the mind for which exclusive rights are
recognized.
Common types of intellectual property rights include
copyright, trademarks and patents.
!
In italian a preferred term is "industrial property".
62
http://en.wikipedia.org/wiki/Intellectual_property_law

63. 2. Set up a startup in Italy
Next week
Ideas management
63