The term innovative startup refers to a new company configured on a temporary model or as a capital company looking for a repeatable and scalable business model, an activity with a new type of business. The article 25, clause 2 of Italian DL 179/2012 defines as innovative “the startup that has as object of the company, exlusive or prevalent, the development, the production and the commercialisation of innovative services or products with high technological value”.

 

THE REQUIREMENTS TO BECOME A STARTUP

To be considered as innovative startup, the company must have these 5 requirements:

  • Being established and carrying out business activities by no more than 60 months;
  • The main office must be in Italy;
  • From the second year of activity of the startup, the total of the annual production value must be less than 5 million euro;
  • Do not distribute profits;
  • The company mustn’t be the result of the merger or spin-off of another company.

In addiction, the startup must satisfay at least one of the following points:

  • The research and development expenses must be equal to or greater than 15% of the higher value between cost al total value of production;
  • At least 1/3 of the recruited staff must be a researcher, or be graduated with three years of certificated research activities; or must be composed for at lest 2/3 by partners who have obtained a master’s degree;
  • To be the owner, custodian or licensee of at least one industrial property (registered patent), or holder of the rights related to an “original computer program” (software) registered in the special public register for computer programs (SIAE), which are directly related to the social object and the business activity.

 

THE BENEFITS OF A STARTUP

There are a lot of benefits in favor of innovative startups, in the form of aid and facilitations:

  • Exemption from chamber rights and stamp duty: startups will not have to pay annual fees and administrative fees due to Chambers of Commerce;
  • Start-ups may hire staff with fixed-term contracts from a minimum of 6 to a maximum of 36 months. After 48 months, you can work in the innovative startup exclusively with a permanent contract;
  • Remuneration of employees through equity incentive plans, introduction of crowdfunding for raising capital and simplified, direct and free access to the Central Guarantee Fund;
  • Tax incentives planned by the 2017 Budget Law, for who in innovative startups: for natural persons it consists of a deduction from IRPEF equal to 30%, for legal entities in a deduction from income for IRES purposes of 30%;
  • Simplified, free and direct access for startups to the Guarantee Fund for Small and Medium-sized Enterprises;
  • In the event that the startup does not take off, there are procedures that make this process less burdensome.

 

IMPORTANT!

At the moment there are more than 9,000 startups in Italy. There are many advantages because there are a lot of subsidies and tax reliefs that facilitate the establishment of this type of business. It is also true that at the moment the startup failure rate is around 96%. In fact, 9 startups out of 10 do not survive the first 3 years of activity. Among the main causes of bankruptcy, the inability to withstand competition (14%), the absence of a sustainable business model (11%) and the inadequacy of the product (9%).

To start a startup, you need to evaluate the right moment, the business idea and get help from expert consultants in the field, who can assist in setting up the company by indicating the best strategies and obtaining funds useful for starting up. If you are planning to open a startup, ask us, we will advise you best.