One of the initial steps for those looking to develop their entrepreneurial idea is to choose the legal structure under which to operate. Among the various forms provided by the legal system, one is characterized by clear tax and bureaucratic advantages aimed at promoting rapid development. Therefore, it's essential to verify, before establishing the company that will execute the entrepreneurial project, whether the relevant requirements are met.

The concept of the innovative startup was introduced in 2012, with the aim, as defined by the decree that established it, to foster sustainable growth, technological development, new entrepreneurship, and employment.

It's evident that the focus of this new entity is on those entrepreneurial entities marked by strong innovation. These are precisely the types of businesses that require greater support, particularly in the early stages.

Definition of an Innovative Startup

Article 25, paragraph 2 of Decree 179/2012 defines an innovative startup as a capital company, also established in a cooperative form, whose shares or equity stakes are not listed on a regulated market or a multilateral trading system.

The same decree defines the objective criteria that a company must fulfill to acquire the status of an innovative startup and be registered in the specific section of the business register. Specifically:

• It is a new company or has been established for no more than 5 years.
• It has its residence in Italy or in another country within the European Economic Area but has a productive headquarters or branch in Italy.
• Its annual turnover is less than 5 million euros.
• It is not listed on a regulated market or on a multilateral trading platform.
• It does not distribute and has not distributed profits.
• Its exclusive or predominant business purpose is the development, production, and commercialization of a product or service with high technological value.
• It has not resulted from a merger, demerger, or transfer of a business unit.

In addition to these objective requirements, a startup must meet at least one of the following subjective requirements to be considered innovative:

• Incur Research & Development and innovation expenses of at least 15% of the higher value between the cost and total value of production.
• Employ highly qualified personnel (at least 1/3 with a PhDs, PhDs candidates or researchers, or at least 2/3 with a master's degree).
• Be the holder, depositor, or licensee of at least one patent or holder of a registered software.

Benefits of Establishing an Innovative Startup

Once the status of an innovative startup is obtained, there's the possibility of accessing a range of benefits, both in terms of tax and finance.

The primary tax advantage lies in the ability to deduct 30% of the investment made in the capital of the innovative startup. In some cases, this percentage can even reach 50% of the investment. Another tax advantage concerns the exemption from the 26% substitute tax on capital gains realized by individuals resulting from the sale of shares in the capital of startups and innovative SMEs.

Furthermore, startups can access preferential channels for sourcing financing. Some of the most important include:

• Smart & Start;
• SME Guarantee Fund;
• Fundraising through equity crowdfunding platforms;
• The possibility of intervention by the Venture Capital Fund of Cassa depositi e prestiti.

An Opportunity for Foreign Investors

The innovative startup also represents an interesting opportunity for foreigners who want to invest in Italy and simultaneously apply for a residence permit.

The 2017 budget law introduced a new type of visa, valid for two years, that can be requested by those who invest in Italian capital companies. The law states that the visa can be issued, in addition to other cases established by law, when an individual invests in an innovative startup with at least 250,000 euros. In the case of investment in an Italian capital company other than startups, to obtain the same visa, the investment must amount to 500,000 euros, twice the amount.

Another useful tool for foreigners wanting to establish a company in Italy and apply for a self-employment visa is the Italy Startup Visa program. It's a visa, valid for one year and renewable, aimed at non-EU citizens intending to establish an innovative startup in Italy that meets the requirements described in the preceding paragraphs.

Vannucci Advisors' Assistance for Innovative Startups

Our firm provides all the necessary assistance for establishing an innovative startup. This assistance covers both the initial company creation phase and the potential second phase of fundraising and developing the entrepreneurial idea.
We also offer assistance to foreigners in the process of obtaining an investor visa and a startup visa.

Furthermore, we have the capability to submit Startup Visa applications in collaboration with our partner, a certified business incubator and accelerator, thereby increasing the likelihood of a successful application.