This can be the right moment and Italy might be the right market to open or expand your innovative business.

Italian incentives to foster innovation

For a few years now, Italy has introduced several measures aimed at incentivizing foreign investment in Italy, encouraging the growth of innovative start ups. Since 2017, those who intend to invest in the venture capital of innovative start ups can benefit from an important tax relief, that consists in a deduction from the gross IRPEF due by the investor, equal to 50% of the investment (according to Decreto Rilancio, D.L. 34/2020).

innovative start-ups can benefit from the Guarantee Fund for Small and Medium Enterprises (Garanzia per le Piccole e Medie Imprese), which facilitates access to credit. It guarantees coverage of up to 80% of the credit provided by banks to innovative start-ups that are properly registered in the special section of the Register of Companies (see D.L. October 18, 2012).

And that’s not it: there is also Smart&Start Italia, the incentive that supports the set up and growth of innovative start ups (to apply, startups must not have been established for more than 60 months) by financing projects between 100,000 euros and 1.5 million euros. To date, more than 130 start innovative ups have been financed, and the facilities granted amount to 532 mln euros.

The Recovery Plan in Italy: an opportunity to increase productivity

After the pandemic crisis the European commission, European parliament and EU leaders agreed on a long-term recovery plan that should help European states in their recovery plans.

The Italian Recovery Plan translates into the PNRR (National Recovery and Resilience Plan) that has a total value of 235 billion euros. Among the initiatives aimed at supporting the territory, there are some reforms focused on increasing the productivity of Italian companies, such as by: simplifying the regulatory framework, reducing the tax burden and tax gap, simplifying the administrative procedures and encouraging digitalization.

Within this context, the Budget Law 2022 also renewed several bonuses and incentives aimed at increasing investments in R&D and the purchase of capital goods for digitizing businesses (National Transition 4.0 Plan and Nuova Sabatini).

Types of companies that can be opened in Italy

We have now given an indicative, even if partial, overview of the incentives and facilities put in place to boost entrepreneurship, productivity and innovation. Let us now look at what companies can be established under Italian law.

Leaving aside sole proprietorships (for which it is enough to have a VAT number), partnerships (less common) and joint stock companies (indicated for large enterprises), we have the most common type by far, the limited liability company. In addition to being the most common, it is also the most flexible, whereby a minimum capital of €1 is sufficient and the rights of each partner are proportional to their shareholding in shares.

Limited liability companies are divided into:

Ordinary SRLs: the traditional limited liability company is the most suitable type for any business, as it can carry out any kind of activity.

SRLs: the simple limited liability company has lower establishment costs but also more limitations.

Innovative start-up: more than a type itself, it is an attribute of an SRL. Any SRL can become one, provided it has not been established for more than 48 months and meets certain requirements. Innovative start-ups can enjoy numerous tax advantages.

Lexia Avvocati law firm

Lexia Avvocati is an Italian law firm specializing in corporate law. The division dedicated to foreign direct investments has been supporting foreign entrepreneurs in opening and expanding their businesses in Italy for more than 10 years. The extensive experience of the Lexia legal team allows for targeted guidance in the opening and management of any type of company, regardless of the sector in which it operates.

The goal is to support growth and innovation, putting at the service of entrepreneurs an in-depth knowledge of Italian regulations and freeing them from the effort of managing bureaucratic procedures.

The incorporation package generally includes:

– register directors and shareholders with the Italian Tax Authorities (i.e. obtain a codice fiscale);

– draft all the relevant documents required (Memorandum and Articles of Association, Power of Attorney etc.), collect from the client all the necessary documents and information, and execute on behalf of the client all the necessary documents;

– obtain a certified email address and the VAT number of the company;

– assist the client with bank account opening.

The support is not limited to companies but also to other entities establishment such as branches or representative offices.

Lexia Avvocati offers also a range of other related services such as:

– drafting commercial agreements;

obtaining licenses in Italy for regulated businesses (e.g. financial institutions, financial intermediaries, insurance companies, gaming companies, travel agencies etc.);

debt collection;

company liquidation;

– consulting for immigration law and investors’ visas;

– consulting for employment law issues;

trademark registration in Italy.

Contact us for any request about doing business in Italy.