June 9, 2020

Decreto Rilancio: An overview of the most important measures for Startups

Law Decree No. 34 of May 19, 2020 (“Decreto Rilancio”) set forth several measures regarding businesses that under certain circumstances may be addressed to startups.[1]

It also provides a specific section dedicated to innovative startups that includes provisions that may also apply to small and medium-sized enterprises (“SMEs”).

The purpose of this article is to provide an overview of measures concerning incentives and benefits specifically for startups and to indicate which of such measures also apply to innovative SMEs.

  1. Liquidity support measures

Smart Money: Innovative startups can receive non-refundable grants of up to EUR10 million for the purchase of services from incubators, accelerators, business angels, and other private or public entities to support their development. The terms and conditions for these grants will be introduced by an implementing decree of the Ministry for Economic Development (“MISE”), which shall be enacted within 60 days of the entry into force of the Decreto Rilancio.

Extension of the Invitalia Smart & Start program: The amount of EUR100 million has been allocated to the Smart & Start program for 2020. This program aims to encourage and support the incorporation and development of innovative high-tech startups nationwide by providing them with financing facilities and covering 80% of eligible costs.[2] Moreover, the Decreto Rilancio expanded the possibility for innovative startups located in the municipalities affected by the 2016 and 2017 earthquakes to repay a reduced amount of 70% of the granted financing facilities. That measure was initially provided only for startups located in specific regions.[3]

Extension of the Venture Capital Support Fund: The Decreto Rilancio established a quantitative and qualitative extension of the Venture Capital Support Fund (the “Fund”), increasing the amount directed to the Fund equal to EUR200 million, as well as providing the possibility for the Fund to invest in innovative startups and SMEs by subscribing: (i) equity financial instruments; (ii) financing facilities; (iii) convertible bonds or other repayable debt financial instruments.[4] Enforcing measures shall be provided by an implementing Decree of the MISE to be enacted within 60 days of the entry into force of the Decreto Rilancio.

Reserved quota of the SME Guarantee Fund: An amount equal to EUR200 million of the SME Guarantee Fund has been reserved for innovative startups and SMEs. Moreover, the SME Guarantee Fund budget has increased to EUR3.95 billion for 2020. Access to the Fund is governed by the same modalities and conditions provided by Law Decree No. 23 of April 8, 2020 (Decreto Liquidità).

Technology Transfer Fund: In order to promote initiatives and investments concerning the enhancement and utilization of research results and, in particular, with the aim of supporting the growth of startups and SMEs with highly innovative potential, the Decreto Rilancio provided incorporation of a specific fund with a budget of EUR500 million for 2020. The aim is to encourage cooperation between public and private entities concerning the implementation of innovative projects and spin-offs.

To implement the abovementioned initiatives and investments, the MISE may make use of the National Agency for New Technologies, Energy, and Sustainable Development (“ENEA”), which is authorized to set up a private-law foundation called “Fondazione Enea Tech.

We are actually still awaiting an implementing decree from the MISE (that shall be enacted within 60 days of the entry into force of the Decreto Rilancio) that will explain how the features and operating procedures of the new fund, as well as the executive role of the ENEA, will be regulated.

First Payable Fund: The decree established incorporation of a specific fund with a starting budget of EUR4 million to support the design and pre-production phases crucial to the development of videogame prototypes. This benefit is allocated through provision of non-refundable grants in an amount equal to 50% of eligible costs and in a range from EUR10,000 to EUR200,000 per prototype to companies that meet the specific requirements listed in the decree.

Videogames are directly distributed on the international market and require a range of highly specialized professionals. Prototype development requires significant resources, usually provided via self-financing. Therefore, the establishment of the abovementioned fund should facilitate prototype development and benefit the country’s internal system of videogames production. Various EU and extra-EU countries have already adopted measures supporting videogames production through establishment of dedicated funds.

The implementing procedures for the First Payable Fund shall be established by a Decree of the MISE to be enacted within 60 days of the entry into force of the Decreto Rilancio.

Investor Visas for Italy: To facilitate the entry of extra-EU investors in Italy, the Decreto Rilancio introduced several changes to the Investor Visa for Italy program (established under the 2017 Budget Law). This program usually allows investors from extra-EU countries to apply for special two-year visas through a digital process, if they carry out:

  • (i) a medium-long term investment, not lower than certain thresholds (from EUR2 million to EUR500,000, determined on a case by case basis) in government bonds and quotas or shares belonging to companies registered and operating in Italy, including startups; or
  • (ii) a donation of at least EUR1 million to support a philanthropic project in the fields of culture, education, immigration management, scientific research, or recovery of cultural and landscape heritage.

To increase special visas applications, the above thresholds have been halved from EUR1 million to EUR500,000 with regard to transactions with established companies, and from EUR500,000 to EUR250,000 for transactions with innovative startups. These changes are aimed at helping Italy acquire a more competitive position from an EU point of view and, as a result, attract a greater number of foreign investments.

  1. Corporate law measures

The term for innovative startups to remain in the special section of the Register of Enterprises has been extended for an additional year. This provision aims to simplify consolidation of startups throughout the country and to prevent them from winding up their businesses because of the negative economic outcomes of the Covid-19 pandemic.

The extension does not apply to tax and contribution benefits provided under the current legislation. Therefore, startups can benefit from tax incentives only for five years.[5]

On the other hand, a twelve-month extension has been provided with respect to any term subject to forfeiture of access to public incentives or their revocation.

  1. Tax incentives

Benefits on execution of extra muros agreements: This specific measure assimilates innovative startups into research centers and universities in order to benefit from tax incentives upon conclusion of extra muros research contracts. Such contracts concern the direct performance of research and development activities by third parties (“commission agents”) external to businesses. The 2020 Budget Law provided that “in the case of extra muros research contracts signed with universities and research institutes located within the country, the relevant costs are included in calculations regarding the tax credit in an amount equal to 150% of their value.” Therefore, pursuant to the equal treatment provided by the Decreto Rilancio, parties that commission research and development activities from innovative startups that are external to their businesses may benefit from this tax credit.

Incentives for investment carried out by individuals: As an alternative to the tax benefits normally governed by section 29 of Law Decree No. 179/2012,[6] the measure provides a tax deduction equal to 50% of the amount invested by individuals in the equity of innovative startups, either directly or through OICRs mainly investing in innovative startups. To benefit from this deduction the maximum investment:

  • (i) cannot exceed, for each tax period, the amount of EUR100,000;
  • (ii) shall be maintained for at least 3 years (if not maintained for that specific period, the benefit shall be revoked, with the individual obligated to refund the deducted amount along with any interest accrued at the legal rate).

The same provision also applies to investments in innovative SMEs.

In this respect, the Italian legislature provided tax benefits only for “small-scale” investments made by individuals, excluding the majority of investments and investors (e.g., all investments of an amount greater than EUR100,000, as well as investments made by legal persons).

Enforcement of the above measures is under the purview of a Decree from the MISE, together with the Ministry of Economy and Finance (MEF), to be enacted within 60 days of the entry into force of the Decreto Rilancio.


Almost all the measures set forth by the Decreto Rilancio for startups require further implementing provisions to be effectively enforced. Therefore, we expect that implementing regulation adopted in the latter half of July, as well as the relevant amendments deriving from the conversion into law of the Decreto Rilancio, will help us understand what effect the above incentives and benefits may have in the startup environment in practical terms.

[1] The most relevant measures, in this sense, are (i) the fiscal benefits related to the Regional Business Tax (IRAP); (ii) non-repayable grants issued to companies that reported a reduction in turnover; (iii) a tax credit equal to 60% of the amount of rental, lease, or permit fees related to properties used for business activities; and (iv) extension of the deadline for re-evaluation of the shares of unlisted companies owned by individuals or partnerships until September 30, 2020.

[2] The eligible costs specifically concern the purchase of capital goods and business plans (e.g., machinery, hardware, trademarks, licenses, know how, etc.), as well as expenses typically associated with the function of the business (e.g., raw materials, use of third-party assets, etc.). It also includes a tutoring component to “teach” startups incorporated fewer than 12 months prior how to use the grants in the most effective way.

[3] Specifically, the measure was initially granted to startups in specific areas of Abruzzo and Molise, as well as in Basilicata, Calabria, Campania, Puglia, Sardinia and Sicily.

[4] The Decreto Rilancio appears to expand the Fund’s investment modalities, since according to current regulation the Fund is allowed to invest only in (i) funds for venture capital, or (ii) Collective Investment Undertakings (Organismi di Investimento Collettivo del Risparmio – “OICR”) investing in funds for venture capital.

[5] In particular, it might seem that the five-year period should be calculated from the moment of creation of the startup, given that: (i) Article 31, par. 4, of Law decree No. 179/2012 dictates that if an innovative startup loses compliance with one of the requirements provided under Article 25, par. 2. before the deadline of five years from the moment of its creation is reached, or, in any case, it does so upon reaching that date, the regulations in its favor provided throughout that section (including the related tax benefits provided therein) shall cease to apply; and (ii) under the decree of May 7, 2019 of the Ministry of Economy and Finance (MEF), commonly known as the “implementing methods of the tax incentives to invest in innovative startups and PMI,” in defining the innovative startups to which that decree may be applied, reference is made to Article 25, par. 2, of Law Decree No. 179/2012, which, in listing the requisites of an innovative startup, provides that to be defined as such a startup should not have been created more than 60 months prior.

[6] The tax regime typically applicable to individuals provides an income tax deduction of 30% of the amount invested in innovative startups or PMI, with deductible investments capped at EUR1 million.

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