Innovative start-ups and SMEs: definition for the Italian law

With the Decree-Law 179/2012 on “Further urgent measures for Italy’s economic growth”, converted into Law 221/2012, and also known as “Decreto Crescita 2.0” (“Growth Decree 2.0”) or “Start-up Act”, the Italian Government introduced into the Italian legal system the possibility for companies to be recognised as innovative start-up.

The Decree-Law 3/2015, (known as “Investment Compact”), converted into Law 33/2015, has extended most of the benefits envisaged for innovative startups to a broader range of companies, the innovative SMEs.

Companies that possess specific conditions can register into the special sections of the Italian Business Register dedicated to Innovative Start-ups and Innovative SMEs, and then can access to a number of administrative and fiscal benefits, such as: zero cost incorporation, simplified insolvency procedures, tax incentives for equity investments, and a public guarantee scheme for bank credit.

Innovative Start-ups

Companies can register into the Innovative Start-up special section of the Italian Business Register if they satisfy all the following conditions:

  • they are companies with shared capital (i.e. limited companies, “società di capitali”), including cooperatives, whose capital shares are neither listed on a regulated market nor on a multilateral negotiation system;
  • Italy is the main place of their business;
  • they are newly incorporated, or they have been operational for less than 5 years from their registration in the special section of the Business Register;
  • they are not the result of a merger, split-up or selling-off of a company or branch;
  • their maximum turnover is € 5 million;
  • no dividends have been and will be distributed;
  • their corporate purpose is the development, production and distribution of products and services with technological value.

Moreover, Innovative Start-ups must possess at least one of the following three characteristics:

  1. the expenditure in R&D is at least 15% of the higher value between turnover and operating costs;
  2. one third of the workforce is made up of PhD holders, PhD students or researchers – or alternatively two thirds of the workforce consist of employees with a master’s degree or equivalent;
  3. the firm is the owner, holder or licensee of a patent or the owner of a registered original computer program, provided that it relates directly to the company’s corporate purpose.

Innovative SMEs

Companies can register into the Innovative SMEs special section of the Italian Business Register if they satisfy all the following conditions:

  • Italy is the main place of their business;
  • their shares are not listed;
  • they possess certified accounts;
  • their maximum turnover is € 50 million (no minimum turnover is required);
  • they employ maximum 250 people.

Moreover, Innovative SMEs must possess at least two of the following three characteristics:

  1. the expenditure in R&D is at least 3% of the higher value between turnover and operating costs;
  2. one fifth of the workforce is made up of PhD holders, PhD students or researchers – or alternatively one third of the workforce consists of employees with a master’s degree or equivalent;
  3. the firm is the owner, holder or licensee of a patent or the owner of a registered original computer program, provided that it relates directly to the company’s corporate purpose.

SOURCES:

You can find detailed information on the Italian start-up legislation at the following link:

https://www.mise.gov.it/index.php/en/2014-06-27-15-07-23/2025221-new-italian-legislation-on-start-ups

and a summary of the Investment Compact for innovative SMEs at the following link:

https://www.mise.gov.it/images/stories/documenti/executive_summary_innovative_SMEs_23febbraio2017.pdf