In Italy, incentives for startups concern all phases of the company’s life and involve tax breaks, easier access to credit, simplification of bureaucratic and management procedures. After the pandemic, further measures were introduced to strengthen support for those who have an idea to implement and a project to do it.
Expected Benefits for Launching an Innovative Startup
At the legislative level, a series of advantages have been provided for investors and startuppers or for all phases of the startup life cycle. The facilitations therefore touch the start-up of the company, the financing necessary for its growth and a series of facilitations both in the event of transformation into an SME and in the event of bankruptcy.
The concessions apply to startups starting from the date of registration in the special section of the Company Register and for a maximum of 5 years from their incorporation.
Incentives provided for starting a startup
- Tax incentives for investment in the capital of innovative startups which consist of a deduction from the gross income tax of 30% of the invested amount (maximum 1 million euros) for natural persons or a deduction from the Ires taxable amount equal to 30% of the amount invested (maximum of 1.8 million euros) for legal entities. Both conditioned by a minimum participation of 3 years;
- free and simplified access to the Guarantee Fund for SMEs, i.e. a guarantee on bank credit that covers up to 80% of each transaction (maximum €2.5 million);
- Smart & Start Italia which provides for the disbursement of a zero-interest loan for entrepreneurial development projects with expenses between 100 thousand and 1.5 million euros. The loan covers up to 80% of the expenses without guarantees. The percentage rises to 90% in the case of startups made up entirely of women and/or young people under the age of 35, or if there is an expert among the shareholders;
- seamless transformation into innovative SMEs;
- exemption from chamber of commerce fees and stamp duties;
- raising capital through equity crowdfunding campaigns;
- services of the ICE Agency with 30% discounts on the purchase of goods and services in the catalogue;
- exceptions to the ordinary corporate regulations;
- discipline of flexible work;
- extension of the deadline for covering losses;
- exception from the regulations on shell companies and systematically loss-making companies;
- remuneration through equity instruments;
- exemption from the obligation to affix the conformity visa for offsetting VAT credits;
- fail Fast, i.e. simplified procedures in case of failure of one’s business.
What has changed after the pandemic?
Following the covid-19 pandemic, the decree-law of 19 May 2020, n. 34 (so-called “Relaunch” Decree) introduced new measures to strengthen the ecosystem of innovative startups:
- grants to purchase services for the development of innovative enterprises;
- support for Venture Capital;
- tax credit for research and development;
- extension of the term of permanence in the special section of the business register;
- extension of the guarantee for the central guarantee fund for SMEs;
- additional incentives for investment in Innovative Startups;
- Investor Visa for Italy program: halving of the minimum investment thresholds;
- subsidies for Innovative Startups located in areas affected by seismic events.
For more information, please refer to the summary sheet of the policy on innovative startups and the document on subsidies for innovative startups, both published on the website of the Ministry of Enterprise and Made in Italy.
Starting from scratch and looking for funding: the example of Iubenda
The Covid-19 pandemic experienced in the last two years has inexorably sealed the fate of some companies that have found themselves in difficulty due to the sudden change in the market. However, this scenario characterized by new needs has turned out to be a thriving ground for other companies that have managed, however, to ride the times and find solutions in line with the market. An example to mention is Iubenda, one of the most used Italian startups in the digital world, which in February 2022 had a portfolio of two and a half million customers worldwide.
Founded in 2010 by Andrea Giannangelo, Iubenda offers a service for creating privacy policies that are automated, but which have legal value. The first years of Iubenda, after the official launch in 2011, were characterized by the difficulty of making inroads into the market since the general opinion did not attribute privacy the right importance. Despite the scenario, Andrea Giannangelo does not give up, he continues his work and further invests in his idea by hiring developers all over the world. The panorama changes when the GDPR is approved in 2018: the issue of privacy is now sensitive and the market adapts accordingly. Iubenda achieves the well-deserved success, also thanks to the investors who decide to finance startups operating in the sector.
Funding is essential for the growth and development of a startup, often it is the lenders themselves who recognize the potential of the idea and invest in the project. It is important not to get discouraged if this does not happen, remaining confident and fully believing in your startup is the key to success.
To learn more about how to finance a startup, you can consult the dedicated article.
