Introduction
There are still possible changes in the Italian innovation landscape with the amendment to the Italian Competition Draft Law (DDL Concorrenza), approved in the Chamber of Deputies on 27 November 2024 and awaiting a favourable vote in the Senate.
Therefore, the provisions set out below are not yet final and may also be subject to change.
In any case, even while waiting for the finality, it is interesting to follow the evolutionary path of these interventions (for a view of the content of the DL Concorrenza, before the amendments: https://antonellolawfirm.com/2024/08/07/innovative-startups-and-news-2024-in-the-italian-law/).
The novelties
The amendment contains interesting novelties and new opportunities for Italian innovative start-ups.
Share capital
The first important change is that relating to share capital.
The requirement that was initially inherent is removed, so that it is no longer necessary to meet the minimum capital requirement of €20,000 within the second year of registration in the special section of the Companies Register.
Predominant activity of agency and consulting
A prohibition has been introduced, for the purpose of qualifying as an innovative start-up, to perform predominantly agency and consulting activities.
Therefore, these activities may not be carried out on a predominant basis, but may be carried out on a non-prevalent basis.
Company size
With the amendment, only companies that fall into the categories of micro, small or medium-sized enterprises (MSMEs) can register in the special section.
With regard to the European criteria for the classification of companies in the MSMEs category, reference is made to the Recommendation 2003/361/CE.
Large enterprises are therefore excluded.
Industrial property rights
The requirement of actual use of the industrial design by the enterprise is removed.
Maintenance of Innovative Start-up status for Up to 5 Years
Certain conditions to be met alternatively for maintaining registration in the special section of the commercial register at the end of the third year are introduced:
– increase of research and development expenses to 25 per cent; or
– conclusion of an experimental contract with the Public Administration; or
– increase in revenues or employment of more than 50% compared to the second year; o
– obtaining at least one patent; or
– creation of an equity reserve of more than EUR 50,000 through financing or capital increases at a premium, resulting in no more than a minority shareholding. The investment must be made by professional third-party investors, certified accelerators or incubators, business angels, equity crowdfunding, or a supervised investor.
Maintaining start-up status beyond 5 years
The ‘ordinary’ period, if the requirements are met, for maintaining registration in the special section of the Companies Register is five years.
The amendment, however, introduces the possibility of maintaining the status for longer.
The extension refers to an additional period of two years, up to a maximum of four for scale-ups, if one of the requirements is met:
- surplus capital increase from Undertakings for Collective Investment in Savings (UCITS) of at least EUR 1 million for each extension period; or
- increase in revenues of more than 100% per annum.
Pension Funds
Another important innovation aimed at injecting new liquidity into the innovation sector is that of investments by pension funds and private pension funds.
These entities, in fact, in order to maintain the tax exemption on capital gains at 26%, must allocate a portion of the portfolio in venture capital funds (5% in 2025 and 10% in subsequent years).
Tax Deductions
From 1 January 2025, ‘de minimis’ IRPEF deductions are increased from 50% to 65%.
Transitional provisions for innovative start-ups already registered in the special section
The changes, in the event of final approval, also affect start-ups already registered in the special section, which can remain there if expenditure on research and development is increased to 25 per cent or a patent is obtained.
There is a difference between:
– start-ups that have been registered for less than 18 months, which must fulfil at least one requirement within six months of the expiry date;
– start-ups that have been registered for more than 18 months, which must fulfil at least one requirement within 12 months of the expiry date.
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