Slides presented during #ISVwebinar n°1, 12 September 2016. Content: the Italian legislation for innovative startups, measures and results.

1. #ISVwebinars: day 1
The Italian legislation for innovative startups
Rome, 12 September 2016
Mattia Corbetta
Member of DG Industrial Policy, Competitiveness and SMEs

2. The
opportunities
for innovative
startups

3. Spreading an
innovation-oriented,
entrepreneurial
culture
Creating qualified
employment, for
young people in
particular
Promoting social
mobility and
merit
Attracting
talents and
capital from
abroad
Economic
growth
Why are innovative startups important?

4. Decree-law
179/2012
Decree «Growth 2.0»: original legal framework
(artt. 25-32)
Decree-law
on “Labour”
76/2013
Broadening of the pool of eligible startups
Decree-law
3/2015
«Investment Compact»:
Special regime extended to 5 years. New
procedure for incorporation.
Innovative SMEs introduced
Legal references

5.  new businesses, or operational for less than 5 years
 HQ in Italy or in another EU country, with at least a
production site branch in Italy
 yearly turnover under €5 mln
 not listed on a regulated market nor on a multilateral
negotiation system
 do not distribute profits
 are not a result of company merger, split-up or selling-off
 have a clear character of technological innovation
Definition of «innovative startup» (D.L. 179/2012)

6. 1. expenses in R&D and innovation are at least 15% of either
its annual costs or its turnover (the largest value is
considered)
2. employs highly qualified personnel (at least 1/3 PhD
holders and students, or researchers, or at least 2/3
Master’s graduates)
3. is the owner, depositary or licensee of a registered patent,
or the owner of a registered software.
Finally, a startup is innovative if it meets
at least 1 of the 3 following criteria:
Definition of «innovative startup» (D.L. 179/2012)

7.  The startup can redact its deed of foundation
and its successive amendments for free, using
a standard model, and with a digital signature
(art. 4, section 10 bis DL n. 3/2015 «Investment Compact»)
Free-of-charge
incorporation
with digital signature
SOSTITUIRE
CON IMMAGINE 1.
ALBERO

8.  Instant access to the special section
of the Italian Business Register
by a self-certification, sent online
 #ItalyFrontiers
An online showcase, both in Italian and English versions, where startups
can create a profile for free and with a digital signature. Its aim: to
increase their visibility to national and international investor, and to
favour open innovation dynamics
A special regime
easy to access SOSTITUIRE
CON IMMAGINE 1.
ALBERO

9. The innovative startup is exempted from paying:
 Annual fees to the Chambers of Commerce
 Other registration fees and duty stamps usually owed to the Business
Register
(circular 16/E Italian Revenue Agency, 11 June 2014)
Cuts to red tape
and fees

10. Srl (Ltd.) are made more similar to SpA (Inc.):
 Possibility to create categories of shares with particular
rights (e.g. voting rights non proportional to the participation in
capital)
 Possibility to carry out operations on one’s shares
 Possibility to issue participative financial instruments
 Possibility to offer capital shares to the public
A flexible corporate
management

11. Extension of terms for covering losses:
In the event of systematic losses, the innovative
startup benefits from a 1-year grace period to cover
losses over 1/3 of the share capital (terms postponed
by two financial years)
Easier to cover
systematic losses

12. The innovative startup is exempted from regulations
on dummy companies and on companies registering
systematic losses.
As a result, the startup does not need to undergo
operationality tests to verify its inactivity status.
In case the revenues of the startup are considered as «not appropriate», it
is not subject to the tax penalties usually faced by dummy companies (e.g.
computation of a minimum income and tax base for corporate taxation
purpose).
No regulations on
dummy companies

13. The innovative startup is exempted from the duty to
affix a compliance visa to compensate VAT credits, for
a maximum of €50,000
(regular threshold: €15,000)
Easier compensation
of VAT credits

14. Specific variants to the regulations on fixed-time
contracts, as defined in DL 81/2015
(«Jobs Act»)
• no limits to durations and total number of renewals (max 36 months)
• possibility of one more renewal after 36 months (max 12 months, 48 overall)
• no obligation to keep a fixed ratio between fixed-term and open-ended contracts
Tailor-made labour law

15. Without prejudice to minimums determined in
collective agreements, parties can determine fixed
and variable components of the salary
(es. linked to efficiency, productivity, profitability, agreed
objectives)
Dynamic salaries

16. Employees and consultants can be remunerated
through stock options and work for equity
that are not included in taxable income
(taxed as capital gain!)
Incentives to work for
equity schemes

17.  for legal persons, allowance from gross income tax
amounting at 19% of the sum invested in innovative
startups, up to €500,000
 for entreprises, deduction on taxable income amounting
at 20% of the sum invested in the share capital of innovative
startups, up to €1.8 mln
 strengthened incentives for investments in innovative startups with a
social goal and cleantech (25% IRPEF allowance and 27% IRES deduction)
 investments can be also disposed indirectly through CIUs and corporations
that predominantly invest in innovative startups and SMEs
 the incentive is conditioned to a holding period of no less than 2 years
Incentives to
investment

18.  Italy was the 1° country in the world to
introduce a special legislation on the matter
(Consob Regulation n. 18592/2013)
 New measures post-Investment Compact
(resolution n. 19520 24/2/2016):
 Extension to innovative SMEs, CIUs and other businesses investing predominantly in
innovative startups and SMEs
 Dematerialisation of the transfer of quotes of innovative startups and SMEs, as a
waiver to the regular legislation, and consequent reduction of costs, with a goal of
fluidifying the secondary market
 Broadening of the definition of professional investors to satisfy the 5% rule
for capital subscription (business angels now included)
Equity
crowdfunding

19. Preferential access to the
Central Guarantee Fund:
 Free intervention
 Fast-track investigation
 Guarantee on 80% of total amount, with no evaluation of the business plan and
balance sheets, and with no additional guarantees from the bank
 Maximum amount guaranteed: €2.5 mln, which can also be spread on several
operations
Easier access to
bank loans

20. Access to the “Startup Service Card”, granting a
30% discount on the following support services:
assistance in legal, societary, fiscal, real estate,
contract and credit matters, free-of-charge participation
in international fairs and showcases, matching activities with
potential investors.
To request the Card, enterprises must write to the following address,
writing in the subject “Startup Service Card request”:
Italian Trade Agency (ICE) – startup@ice.it
Targeted support from
the Italian Trade Agency

21. A subsidised financing scheme for innovative
startups in any part of Italy.
• €200mln until exhaustion of funds, for expenditure
programmes between €100,000 and €1.5 mln each
• Zero-interest mortgages for 70% of the total sum (80% for
predominantly female or under-35 startups)
• 20% grant for startups located in Convergence regions
• Managerial and technical tutoring startup younger than 12 months
Further information: http://www.smartstart.invitalia.it
Smart&Start Italia

22. Launched on 24 June 2014, Italia Startup Visa is
aimed at non EU entrepreneurs who want to
establish an innovative startup in Italy, introducing a
new procedure to issue self-employment visas.
The procedure is:
• fast: it never takes more than 30 days
• centralised: it is based on a Committee of representatives of the Italian
innovation ecosystem, coordinated by the Ministry of Economic Development
• free-of-charge
• completely online
More information: italiastartupvisa.mise.gov.it
Italia Startup Visa

23. Since 23 December 2014, Italia Startup Hub
has extended the simplified procedure provided by
Italia Startup Visa to non EU citizens that already hold
a regular residence permit, in case they want to remain
in Italy to establish an innovative startup.
The ISH procedure allows to convert the previous permit (obtained, for
instance, for study reasons) in a «startup self-employment permit» with no
need to leave Italy at any time, enjoying the same fast-track, simplified
procedure granted to startup visa holders.
More information: italiastartuphub.mise.gov.it
Italia Startup Hub

24. Invitalia Ventures was set up to accelerate the
development of cutting-edge innovative entreprises:
startups and innovative SMEs.
The company (an SGR), controlled by Invitalia (The
national agency for inward investment promotion and enterprise
development, owned by the Ministry of Finance), manages the Venture
Capital fund Italia Venture I.
Endowed with €50 mln, Italia Venture I operates in co-investment with
national and international private operators, reinforcing at the same time
the Venture Industry and the Italian innovative startups and SMEs.
Visit the website www.invitaliaventures.it
Invitalia Ventures

25. Innovative startups are exempted from the regular
legislation on bankruptcy.
The process is made faster and less costly, with the goal of
allowing the entrepreneur to get back on track immediately
with a new entrepreneurial project, overcoming deep seated prejudices on
failure.
Fail fast

26. The
opportunities
for innovative
SMEs

27.  SME as defined by EU regulation (Recommendation
2003/361/CE):
< 250 employees, < €50 mln yearly revenues, < 43 mln € total
turnover
 HQ in Italy, or in another EU country, with at least a
production site branch in Italy
 Certified statement of the accounts
 Not listed on a regulated market
 Not registered in the special section of the Business
Registry for innovative startup (asimplifiedtransitionbetween the
tworegimes is provided)
Definition of innovative SME (D.L. 3/2015)

28. 1. expenses in R&D and innovation are at least 3% of either its
annual costs or its turnover (the largest value is considered)
2. employs highly qualified personnel (at least 1/5 PhD holders
and students, or researchers, or at least 1/3 Master’s
graduates)
3. is the owner, depositary or licensee of a registered patent, or
the owner of a registered software.
Finally, an SME is innovative if it meets
at least 2 of the 3 following criteria :
Definition of innovative SME (D.L. 3/2015)

29. The opportunities for innovative SMEs
• Free access to #ItalyFrontiers
• Flexible corporate management
• Easier to cover systematic losses
• Exemptions on dummy companies
• Work for equity incentive
schemes
• Incentives to investment
• Equity crowdfunding
• Easier access to bank loans
• ITA Service Card

30. The Italian innovative startup ecosystem
Territorial distribution – Updated on 05/09/2016
397
483
619
750
1350
PIEDMONT
VENETO
LAZIO
EMILIA
ROMAGNA
LOMBARDY 1,350
199
483
149
14
397
750
340
619
97
295
152
396
47
142
232
289
152
107
Top 5 regions
Top 5 provinces
195
201
298
536
917
BOLOGNA
NAPLES
TURIN
ROME
MILAN
Total:
6,235
25

31. The Italian innovative startup ecosystem :
registration trends– Updated on 05/09/2016
479
1477
3120
5143
6235
0
1000
2000
3000
4000
5000
6000
7000
MARCH 2013 DECEMBER 2013 DECEMBER 2014 DECEMBER 2015 JUNE 2016
479
1,477
3,120
5,143
6,235
DEC
2013
DEC
2014
DEC
2015
SEP
2016
MAR
2013

32. The Italian innovative startup ecosystem :
dimensional distribution – Updated on 05/09/2016
65%
27%
5% 3%
Production value
up to 100k
between 100k and 500k
between 500k and 1M
more than 1M
64%
30%
6%
Share capital
up to 10k
between 10k and 100k
more than 100k
79%
15%
6%
Employees
up to 4
between 4 and 9
more than 10

33. 1122; 19%
293; 5%
77; 1%
1815; 30%895; 15%
505; 8%
1354; 22%
What they do
Industry and handicraft
Trade
Tourism and agriculture
Software production and
computer consultancy
Scientific research and
development
IT and related services
Other services

34. Business Register trends – how many people are involved?
Updated on 30/06/2016 (2° quarter 2016)
• 8,193 employees
+1,669 than late December 2015,+25.6%
• 23,045 shareholders
+1,927 than late March, +9.1%
• July 2015 – July 2016, the overall number of people involved in
innovative startups registers a 33.4% increase, going from just
under 21,000 to more than 31,000.
34

35. • 44.2% have at least a woman in the company
(slightly below the average of all capital companies)
• 22.2% have a majority of under-35 members
(more than three times higher than average)
• 12.6% include at least one non Italian citizen
(average: 10,5%)
– In 2.5% of innovative startups foreigners make up a majority
of its members
Business Register trends – how many people are involved?
Updated on 30/06/2016 (1° quarter 2016)

36. • €328 mln in 2014
(data calculated on 2.821 companies with at least one
statement of accounts)
• 29.7%: average ratio between fixed assets and
all assets:
(average of capital companies: 6%)
• Profitable startups generate on average more added value than
other capital companies (33 cents vs 21)
Business Register trends – how much value do they generate?
Updated on 30/06/2016 (1° quarter 2016)

37. • 1.065 innovative startups were granted bank financing with an intervention of
the Public Guarantee Fund for SMEs
• Total sum: 417,990,236 €
• Average: 252,868 €
• 1,653 operations overall
• 54.2 months: average duration of funding
Access to the Public Guarantee Fund
3° two-monthly report, 2016 30/06/2016

38. Compared to 30 April 2016:
+128 startup financed
+55.81 mln in funding
+226 loans
Access to the Public Guarantee Fund
3° two-monthly report, 2016 30/06/2016

39. Favour diffused monitoring and data journalism:
4 outputs
Excel database,
freely accessible and
editable, with a rich set of
information,
published on
startup.registroimprese.it
Report on access
to the Public
Guarantee Fund
for SMEs
Quarterly report
on trends
observed in the
special section of
the Business
Register
Minister’s Report
to the Parliament,
based on the work
of a Committee of
Monitoring and
Evaluation
every monday every 2 months every 3 months every year

40. Italia Startup Visa
updated on 31/08/2016132 applications
29 countries
5 ongoing94 accepted 33 rejected
x2
x2
x1
x1
x1
x1
x3
x14
x1
x1
x3
x3
x3
x2
x1
x4
x1
x1
x1
x1
x1
x14
x30
x1
x18
x2
x14
x1
x1

41. 25% tax credit on incremental R&D investment
on a 5-year period (2015-2019).
Granted a maximum yearly sum of €5 mln.
The increase is calculated on the average investments
made in the 2012-2014 three-year period.
For costs related to highly qualified staff employed in R&D activities,
and research activities with universities, research organisations, other
businesses (innovative startups and SMEs included) the Tax Credit
increases to 50%
(DM MEF-MISE 27 May 2015)
Tax Credit on R&D

42. Patent Box
Opportunity to choose a facilitated fiscal regime:
exemption from overall income of 50% of profits
coming from direct/indirect use of intellectual
property, industrial patents and trademarks
(DM MEF-MISE 30 July 2015)

43. Further information:
startup@mise.gov.it
pminnovative@mise.gov.it
italiastartupvisa@mise.gov.it
info.italiastartupvisa@mise.gov.it
2811
282 268
0
500
1000
1500
2000
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3000
startup@mise.gov.it pminnovative@mise.gov.it info.italiastartupvisa@mise.gov.it
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