Set up a startup in Italy IED Lesson 2Frieda Brioschifrieda.email@example.com
Course program1. Italian Startups2. Set up a startup in Italy3. Ive got an idea. And now?4. Value analysis5. Business model6. Communicate, communicate, communicate7. Being net8. Find your market9. Funding: venture capital, business angel and otherways of financing10. Pitch
Todays table of content1. Legislative framework: Decreto Startup, etc.2. Labour agreements3. Copyright & Intellectual property
Italian startups: quick recapDuring last lesson we analyzed 14 differentcompanies started from 1995 to 2011: most of themare “alive and kicking”, few disappeared, a couplewere re-started.
Italian startups: quick recapWhat 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 ofsuccess• Passion and team are core values• Never ever ignore your customers!
Decreto Crescita bisOn 4th October 2012, the Italian Governmentapproved a Law Decree on “Further urgentmeasures for Italy’s economic growth”.Section IX of the Law Decree (articles 25 to 32)provides for specific measures which are aimed atpromoting the creation and development ofstartups.This is the first time the Italian legislation deals withsuch companies. http://bit.ly/XAK87g
Decreto Crescita bisAfter being approved by the Italian Government, theLaw Decree was signed by the President of theRepublic and published in the Official Journal(Decree Law no. 179, 18th October 2012). http://bit.ly/XAK87g
Start-Up RegulationOn December 13, 2012, the Law Decree no. 179 wasmodified by the Parliament and subsequentlyconverted into law (the Start-Up Regulation). http://www.lw.com/thoughtLeadership/boosting-innovative-start-ups-italy
Start-Up RegulationThe Start-Up Regulation provides a new set of rulespromoting the creation and development ofinnovative startups with a view to encouraginginnovation and strengthening of enterprises’competitiveness.It derives from the report by the task force onstartups established by the Minister of EconomicDevelopment.
General ideaOver time, Italy has demonstrated that it is able todevelop 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 selltheir best products around the world. In many casesthey have even become global leaders. http://www.sviluppoeconomico.gov.it/images/stories/documenti/startup_eng_rev.pdf
Looking overseasIn the last 10 years, startups have generated 3million jobs in the United States.President Obama launched Startup America which"moved" the equivalent of 1 billion dollars inbusiness services.Why are they doing this? Because they are aware ofthe fact that, nowadays, 40% of the wealth in the USis produced by enterprises that did not even exist 30years ago. http://www.sviluppoeconomico.gov.it/images/stories/documenti/startup_eng_rev.pdf
What’s a startup?• an enterprise that has been established recently• whose goal is to develop, produce and marketcertain goods or services• these products are the results of research, or thecompany uses a high rate of innovation in its activityStartups do not pertain just to the digital world, butare established across all sectors. http://www.sviluppoeconomico.gov.it/images/stories/documenti/startup_eng_rev.pdf
Innovative startups/1It is owned directly and for at least a 51% share byindividuals, also in terms of voting rights. http://startup.registroimprese.it/
Innovative startups/2It must have been established for no longer than 48months. http://startup.registroimprese.it/
Innovative startups/2bisFor the startups which have not yet been running for48 months, but which already exist, the 48-monthperiod would start when the package is adopted.However, startup support measures should no longerapply when a startup enters its 6th year. http://www.sviluppoeconomico.gov.it/images/stories/documenti/startup_eng_rev.pdf
Innovative startups/3It must reside or be subject to taxation in Italy. http://startup.registroimprese.it/
Innovative startups/4It has no turnover or has a turnover that does notexceed 5 million euros. http://startup.registroimprese.it/
Innovative startups/5It does not distribute profits. http://startup.registroimprese.it/
Innovative startups/6Its core business consists of innovative goods orservices of high technological value. http://startup.registroimprese.it/
Innovative startups/7It shall not result from the merger, division or transferof business from a going company. http://startup.registroimprese.it/
Innovative startups/8 EITHER30% of its costs are related to R&D ORat least one third of the team is made up of peoplewho either hold a PhD or are PhD candidates at anItalian or foreign university or have conductedresearch for at least three year ORit is the owner or the licensee of a patent. http://startup.registroimprese.it/
Startups with a social goal• same requirements that apply to ordinary startups• operates in some specific domains• its domain must have a considerable social valueExamples of domains are social inclusion, fight tomarginalization of disabled persons,environmental protection etc. http://bit.ly/13PFWUI
Why social startups?Startups with a focus on the social dimensiongenerally tend to adopt business models that may beless attractive for investors.Their reason of being is to answer society’s needsfirst and foremost, along with market ones.Thus, they have lower returns on investments andfewer chances to develop when compared to“ordinary” startups. http://www.sviluppoeconomico.gov.it/images/stories/documenti/startup_eng_rev.pdf
Social area•Welfare•Healthcare•Education•Vocational training•Protection of the environment•Cultural heritage•Sustainable tourism•undergraduate and postgraduate education•research•cultural services• .. http://www.sviluppoeconomico.gov.it/images/stories/documenti/startup_eng_rev.pdf
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 http://bit.ly/13PFWUI
Advantages/2 Special financial instruments for debt managementExtension 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!
Advantages/3 Simplified procedure for bankruptcyBasically 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 entreprenoeur reputation . http://bit.ly/13PFWUI
Advantages/4Startups can hire personnel through fix-timecontracts (6 to 36 months).Contracts can be renewed more than once.After 36 months, the contract can be further renewedfor just one more time, for no longer than 12 months,i.e. the total duration of the contract must not exceed48 months.After that, the employee can keep on working for thestartup exclusively with an open-ended contract. http://bit.ly/13PFWUI
Advantages/5Start-ups can remunerate their team members and the providers of external services, including lawyers andaccountants, 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. http://bit.ly/13PFWUI
Advantages/6 Tax incentives for corporate and private investments in startups for the years 2013, 2014 and 2015, both for direct investments in startups and in case of indirectinvestments (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. http://bit.ly/13PFWUI
Advantages/7 Introduction of crowdfunding.Details regarding the functioning of this system will bedecided with a specific regulation which will be passed by CONSOB. (still underway) http://bit.ly/13PFWUI
Advantages/8Fast-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. http://bit.ly/13PFWUI
And then?1. Found a limited company2. Send notification of setting up of business3. Register at an online directory created for this purpose at the Chambers of Commerce
Limited companies1. joint stock companies (società per azioni),2. share partnership companies (società in accomandita per azioni)3. limited liability companies (società a responsabilità limitata)4. simplified limited liability company (società a responsabilità limitata semplificata)5. limited liability companies with reduced share capital (società a responsabiltà limitata a capitale ridotto)6. cooperative companies (società cooperative)
Statutory minumum capitalS.p.A. and S.a.p.A.: €120,000S.r.l.: €10,000.S.s.r.l. and S.r.l.c.r.: > €1 and < €10,000.
S.r.l. group1. company needs to be registered with different institutions (the tax office,the companies registry, INPS, INAIL)2. registration can be done using ComUnica online3. all this has to be done via notary public http://www.registroimprese.it/comunica#tab=cosa&under-tab=corsi
S.r.l. obligations1. pay an annual tax on company books,2. issue a company valuation report,3. pay tax for lodging the minutes of a meeting every time profits are distributed;4. pay for a tax advisor;5. pay taxes on the registration of the transfer of shares from one business partner to another
LiquidationIt is the process by which a company is brought to anend, and the assets and property of the companyredistributed.Liquidation may either be compulsory or voluntary. http://en.wikipedia.org/wiki/Liquidation
Reasons for liquidationA liquidation or a dissolution may occur for• term elapsed• the company has reached the business purpose orthe object cant be reached• unable to operate• Statutory minumum capital less than legal minimum• Assembly resolution• other reasons according to the bylawsThere’s no limit to the length of a liquidation
BankruptcyIt is a legal status of a company that cannot repay thedebts it owes to creditors. Often bankruptcy isimposed by a court order, but can be voluntary too.Bankruptcy can be a consequence of insolvency. Allassets of the debtor are liquidated under theadministration of a official receiver. http://it.wikipedia.org/wiki/Fallimento_(ordinamento_giuridico_italiano)
Co.co.pro• Define a detailed project with expected results• No trial period• Total employee cost about 150% net salary
FreelanceOften in Italy freelances are used as regularemployees.After Fornero’s law a freelance is considered fake if:• earns <€18,000 gross• collaboration lasts more than 8 months for at least 2successive years• salary > 80% of total income for at least 2successive years• freelance has a “fixed” desk in the companyThis does not apply to everyone subscribed to aprofessional register
Minimum taxpayer regimeIt’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 business5 years limit does not apply to <30 years.
Occasional work• earns <€5,000• no more than €2,000 from each customer• fixed taxation: 20%
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 itlast <6 months, 90 dd otherwise)• Total employee cost equal to open ended employeeagreement
IPIntellectual property (IP) is a legal concept whichrefers to creations of the mind for which exclusiverights are recognized.Common types of intellectual property rights includecopyright, trademarks and patents.In italian a preferred term is "industrial property". http://en.wikipedia.org/wiki/Intellectual_property_law
Author’s rightsIn Italy:• law: 22 aprile 1941 n. 633 "Protezione del diritto dautore e di altri diritti connessi al suo esercizio“Two distinct components:1. economic rights in the work2. the moral rights of the author. http://it.wikipedia.org/wiki/Diritto_d%27autore_italiano
Moral rights1.Right of attribution2.the right to have a work published anonymouslyor pseudonymously3.right to the integrity of the work (bars the work fromalteration, distortion, or mutilation)Anything else that may detract from the artistsrelationship with the work even after it leaves theartists possession or ownership may bring thesemoral rights into play.Moral rights are inalienable. http://en.wikipedia.org/wiki/Moral_rights_(copyright_law)
Economic rightsThe economic rights are a property right which islimited in time (70 years after the author’s death inItaly) and which may be transferred by the author toother people.They are intended to allow the author or their holder toprofit financially from his/her creation, and include theright to authorize the reproduction of the work in anyform. The authors of dramatic works (plays, etc.) alsohave the right to authorize the public performance oftheir works. http://it.wikipedia.org/wiki/Diritto_d%27autore_italiano
Copyleft copyleft < > copyright Allows for rights to distribute copies and modifiedversions of a work, and requires that the same rights are preserved in modified versions of the work. Copyleft is a general method for making a work free (libre),and requiring all modified and extended versions of the work to be free as well. This free does not necessarily mean free of cost, but free as in freely available to be used, distributed or modified. http://en.wikipedia.org/wiki/Copyleft
CopyleftCopyright law is usually used to prohibit others from reproducing, adapting, or distributing copies of the authors work.Under copyleft an author may give every person whoreceives a copy of a work permission to reproduce, adapt or distribute it and require that any resulting copies or adaptations are also bound by the same licensing agreement. Creative Commons are the most known copyleft licences. http://en.wikipedia.org/wiki/Copyleft
TrademarkA trademark is a recognizable sign, design orexpression which identifies products or services of aparticular source from those of others.The trademark owner can be an individual, businessorganization, or any legal entity. http://en.wikipedia.org/wiki/Trademark
TrademarkThe law considers a trademark to be a form ofproperty. Proprietary rights in relation to a trademarkmay be established through actual use in themarketplace, or through registration of the mark withthe trademarks office. http://en.wikipedia.org/wiki/Trademark
Registered trademarkA registered trademark confers a bundle of exclusiverights upon the registered owner, including the rightto exclusive use of the mark in relation to theproducts or services for which it is registered.In Italy the national registration process should besent to Ufficio Italiano Brevetti e Marchi (UIBM).Registration lasts 10 years and is renewable.An european registration can be done at Ufficio perlarmonizzazione nel mercato interno (UAMI), and aninternational registration can be done at WIPO.
Registered trademarkRegistrations can in particular cases beapproved for preexisting designs.Similar trademarks may coexist in differentfields of business (think of Steve Job’s Appleand Beatles’ Apple Records).Registrations can be challenged if deemedunfair, and eventually dropped.
PatentA patent consists of a set of exclusive rights grantedby a sovereign state to an inventor or their assigneefor a limited period of time, in exchange for the publicdisclosure of the invention. An invention is a solutionto a specific technological problem, and may be aproduct or a process.The exclusive right granted to a patentee in mostcountries is the right to prevent others from making,using, selling, or distributing the patented inventionwithout permission. http://en.wikipedia.org/wiki/Patent
Types of patents in Italy Invention patent: it’s the stronger and higher form of protection, used for technologicalinnovation in products, processes or solutions (including new vegetables varieties). 20 years, non renovable Utility model:A weaker patent, easier to obtain but harder to defend. Limited to products and physical objects. It’s used for inventions that improve on existing products. It protects the form, too, provided that thare is a provable enanchement in functions. 10 years, non renovable. (Pro tip: Italian law –art 84 CPI- allows to request both patents for the same invention, leaving the choice of the most fitting to the patent office) http://ufficiobrevetti.it/en/patents/
Types of patents in Italy (not properly a patent) Model or design registration: it’s the weaker and most limited patent, providing basicprotection to form, colors and design of a specific model ofproduct. It’s extremely easy to apply, up to 100 variants of the same design can be deposited with a single instance. This is mostly used in fashion, design and styling business, allows for quick prosecution of fakes. 25 years, taxes could be payed in installments. http://ufficiobrevetti.it/en/patents/
Filing a patent A prototype is not needed A thorough description with detailed drawings is enoughRequirements:-Novelty (never patented before, anywhere)-Originality (non obvious, different from current state of art)-Industrial Applicability (no arts & crafts, must be reproduced industrially)-Legality (must not offend morality, break law and impair order)To maintain validity, a patent MUST BE REALIZES WITHIN 3 YEARS FROMREGISTRATION (or 4 years from applocation).Since 1 jan 2006 filing a patent is FREE from fees. Some costs could arise in orderto provide the required documentations, a free cost assessment could be requestedon Ufficio Brevetti’s website. http://ufficiobrevetti.it/en/patents/