Innovative start up enterprise – new entrepreneurial project
50% for new and innovative entrepreneurial projects
The innovative start-up enterprise is the perfect tool for those who want to start an innovative business.
The main advantage of this choice is the tax credit that is due to those who invest in the capital of these companies: this grant is equal to 50% of the paid-up capital.
The innovative Start-up status allows privileged access to many resources and this status could be maintained for 5 years from the date of establishment.
Natural and legal persons who have established or intend to establish an innovative Start-up enterprise as a joint stock company.
The new company must have as its exclusive or prevailing business purpose the development, production and sales of a product or service with a high technological value.
The innovative start-up company is a high-tech company with strong growth potential.
The Italian D.L. 179/2012 introduced some specific measures to support this type of enterprise aiming at fostering innovation and promoting a sustainable growth strategy.
In response to the Covid-19 emergency, the decree-law of May 19th 2020, n. 34 (the so-called “Relaunch” Decree) has strengthened these measures.
The Innovative start-up companies can enjoy the benefits within 5 years of their establishment; after this period of time they have the opportunity to transform themselves into innovative SMEs, without losing the available benefits.
Innovative start-up company: 14 more reasons to choose it
- Digital establishment of the Start up company: possibility to draw up the act of incorporation and statute through an online procedure.
- Tax incentives for investing in the capital of innovative start-up entreprises: an important tax relief is available for those investors who invest in venture capital of innovative start-up companies, set up as follows:
- for natural persons, a deduction from gross income tax equal to 30% of the amount invested, up to a maximum of 1 million euros (measure modified by the decree-law of May 19th , 2020, n. 34, the so-called “Relaunch” Decree);
- for legal persons, a 30% deduction from the IRES taxable amount of the invested amount, up to a maximum of 1.8 million euros.
- Free and simplified access to the Guarantee Fund for SMEs: this is a public capital fund that facilitates access to credit by granting guarantees on bank loans. The guarantee covers up to 80% of the credit disbursed by the bank, up to a maximum of 2.5 million euros. The guarantee is granted as follows:
- Automatically: the Fund does not assess the rating of the start-up company’s financial statement data, relying on the due diligence carried out by the credit institution that is in charge of the operation;
- In a priority way: the applications submitted by innovative start-up companies or certified incubators are evaluated more quickly than the ordinary ones;
- Free of charge: there are no costs for accessing the Fund.
- Furthermore, the credit institution involved cannot request real, insurance or bank guarantees on the part of the loan covered by a public guarantee.
- Smart & Start Italy: disbursement of an interest-free loan for business development projects with an expenditure programme ranging from 100 thousand to 1.5 million euros. The loan covers, without any guarantee, up to 80% of eligible expenditure; this percentage can rise up to 90% if the Start-up company’s capital membership is being characterised entirely by women and / or young people under 36 years old, or if among the members there is an expert with the title of Italian PhD (or equivalent) who works abroad and wants to return to Italy. The Start-up companies based in Abruzzo, Basilicata, Calabria, Campania, Molise, Puglia, Sardinia and Sicily are entitled to require a non-returnable grant equal to 30% of the financing and thus return only 70% of the loan received. The loan must be repaid in 10 years starting from the 12th month following the last tranche of the received loan.
- Transformation into innovative SMEs without interruption: in case of success, the innovative start-up companies that have matured and that continue to maintain a significant component of innovation can transform themselves into innovative SMEs, passing directly from the special section of the Register of Companies dedicated to innovative start-up companies to that one of innovative SMEs, maintaining registration in the special section and, therefore, without losing the right for the available benefits. In fact, innovative SMEs benefit from most of the measures envisaged for innovative start-up companies. Some of them are applicable without any differentiation between the two types of companies.
- Exemption from Chamber of Commerce fees/charges and from stamp duties: from the moment of their registration in the special section of the Register of Companies they are exempt from the payment of stamp duty and administration fees due for the administrative fulfilments relating to registrations in the Register of Companies, as well as from payment of the annual fee due in favor of the chambers of commerce.
- Internationalisation services for enterprises (ICE): the ICE Agency provides assistance in legislation, corporate, tax, real estate, contracts and credit matters: innovative start-up companies are entitled to a 30% discount on the purchase of goods and optional services (excluding external costs). Furthermore, the company reaching the threshold of 1,000.00 Euros of expenditure (excluding external costs and VAT) for optional services purchased during the calendar year, will accrue the right to a 10% discount on the cost of optional services which will be disbursed in the following year.
- Exceptions to ordinary corporate regulations: to innovative start-up companies established as an LTD it is allowed to:
- create categories of shares endowed with particular rights (for example, shares that do not attribute voting rights or which attribute them to an extent that is not proportional to the shareholding);
- carry out transactions on its own shares;
- issue equity financial instruments;
- offer capital shares to the public.
- Regulations of flexible work: the innovative start-up companies are subject to the regulations of fixed-term contracts provided for by Legislative Decree 81/2015, as amended by Legislative Decree no. 87/2018. The innovative Start-up company can, therefore, hire employees with fixed-term contracts with maximum duration of 24 months. However, within this time frame, the contracts may also be short-term and renewed several times, without the limits of duration and number of extensions provided by the general rule (Article 21). Furthermore, unlike other companies, the innovative start-up companies with more than 5 employees are not required to conclude a number of fixed-term contracts calculated in relation to the number of active permanent contracts (Article 23). Both measures apply for a maximum of 4 years from the date of establishment of the innovative Start-up company.
- Extension of the deadline for coverage of losses: in the event that operating losses lead to a reduction by more than one third in the company capital, the deadline by which the loss must be reduced to less than one third is postponed to the second subsequent financial year (instead of the first one). In the event of a reduction in capital due to losses below the legal minimum allowed, the shareholders’ meeting may decide to postpone the decision to the end of the following financial year, as an alternative to the immediate reduction of the capital and its simultaneous increase to an amount not less than the legal minimum.
- Derogation from the regulations on shell and systematic loss making companies: innovative start-up companies are not subject to the regulations on shell companies and companies with systematic losses. Therefore, in the event that they achieve “inconsistent” revenues or are in a systematic tax loss, the tax penalties envisaged for the so-called shell companies are not applied, such as the allocation of a minimum income and a minimum tax base for IRAP purposes, the limited use of the VAT credit, the application of the Ires increase of 10.5%.
- Remuneration through equity participation instruments: innovative start-up companies and certified incubators can remunerate their collaborators with equity participation instruments (such as stock options), and external services’ providers through work for equity methods. The income resulting from the assignment of these instruments does not represent taxable income, neither for tax purposes nor for contribution purposes. Furthermore, the remuneration is subject to a minimum provided by the collective employment agreements, but the parties can independently establish fixed and variable components of the remuneration, determined, for example, on the basis of the efficiency or profitability of the company, the productivity of the employer or of the work team or based on the other goals or performance parameters, including also the remuneration through instruments for shareholding.
- Exemption from the obligation to affix the stamp of approval for VAT credit compensation: the exemption concerns amount up to € 50,000 (unlike ordinary regulatory, which requires the affixing of the stamp for amounts exceeding € 5,000), with significant benefits in liquidity terms.
- Fail Fast (simplified procedures in case of failure of your business): innovative start-ups are considered among the so-called “non-insolvent” subjects. Specifically, in the event of failure, they are subject only to the procedure for settlement of the over-indebtedness crisis and liquidation of assets, with exemption of bankruptcy procedures, arrangement with creditors and administrative compulsory liquidation. In addition, after 12 months from the opening of the liquidation, access to chamber source data relating to the shareholders and corporate bodies of the same is allowed only to the judicial and supervisory authorities.
- Non-repayable grants to purchase services for development of innovative companies, by incubators, accelerators, innovation hubs, business angels and other public or private institutions operating for the development of innovative companies. 10 million euros resources have been allocated for this purpose.
- Support for Venture Capital, through additional resources equal to 200 million for the 2020 year allocated to the Venture Capital Support Fundes to support investments in capital, also through the underwriting of equity financial instruments, the subsidized loans allocation, the subscription of convertible obligations, or other debt financial instruments that provide for the exclusive benefit of innovative start-ups and innovative SMEs.
- Tax credit for research and development activities: innovative start-ups are treated as universities and research institutes, therefore, they can be in charge for the implementation of the “extra muros” research projects.
- Extension of the special section of the business register (12 months) stay in term: the extension is not relevant for the purposes of the tax and social security contributions benefits in force.
- Extension of the guarantee for the SMEs central guarantee fund: an amount of 200 million euros has been allocated for the disbursement of guarantees for start-ups and innovative SMEs, under the already assigned resources of the Central Guarantee Fund for SMEs.
- Additional incentives for investment in Innovative Start-ups: “de minimis” incentives were introduced for the investment in innovative Start-ups through which individuals, for investments up to a maximum of 100 thousand Euros for each tax period in the share capital of one or more innovative start-ups or innovative SMEs, can benefit from a 50% IRPEF (personal income tax) deduction on the amount of the investment. The requirements is to maintain this investment for a minimum of 3 years.
- Investor Visa for Italy Program: the minimum thresholds for investments by foreign investors in innovative companies and start-ups have been halved:
- for investments in equity instruments of joint-stock companies operating in Italy and maintained for at least 2 years, the minimum investment limit went from 1 million euros to 500 thousand euros;
- for investments in innovative start-ups, the minimum investment limit went from 500 thousand to 250 thousand euros.
- Facilitations for Innovative Start-ups located in areas affected by seismic events: the facilities referred to in the decree of the Minister of Economic Development 24 September 2014 (Smart & Start Italia) referring to innovative start-ups located in the Aquilan seismic crater area have been extended to Innovative start-ups located in the area of the municipalities affected by the seismic events of 2016 and 2017.
What is the main facilitation foreseen for the innovative start-ups?
Surely the possibility of recovering 50% of the capital invested in the company. For example, if you pay 50,000 euros, you will be able to benefit from 25,000 euros in tax credit subsidy. There are no restrictions on the use of the money which can be used to cover any category of expenditure.
Articles 25-32 of the Law Decree 18 October 2012, n. 179 (D.L. Growth 2.0) converted with Law 17 December 2012, n. 221 and subsequent amendments
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