In August 2013 the Italian legislator introduced some relevant amendments to the existing legal requirements on innovative start-ups by increasing the possibility for new companies to benefit from such a classification. In light of these amendments, as of today in order to be classified as “innovative” a start-up shall,
a) Develop, produce and trade innovative goods or services with a high technological value, such activities representing its exclusive or prevailing core business.
b) Meet at least one of the following requirements,
- Costs allocated to research and development must be equal to or higher than 15% (previously 20%) of the higher value between (i) the company’s production costs and (ii) the company’s production value.
- At least one third of its work force shall be represented by individuals with a Ph.D., or in the process of obtaining a Ph. D., or with a degree and having completed a research program of three years at public or private research entities in Italy or abroad; alternatively (as introduced by the latest law) two third of its work force shall be composed of individuals with a degree.
- The start-up shall be the owner or assignee – or have applied for the registration with the relevant authorities – of an industrial property right (e.g. a patent) related to its core business; as an alternative to the above, pursuant to the latest modifications, the start-up shall be the titleholder of the rights relating to an original piece of software duly registered with the special public register for software.
In addition to the above, the innovative start-up shall also satisfy the following requirements,
- It has to be a private stock company (such as a joint-stock company, a limited liability company or a cooperative) or a societas europaea, unlisted and with fiscal residence in Italy; the corporate capital can be owned by individuals or legal entities as the rule providing that the majority of the corporate capital and voting rights should be owned by individuals for the first 24 months following the company’s incorporation has been removed.
- It shall have existed for no more than 48 months.
- The main place of business shall be in Italy.
- It cannot distribute profits.
- Starting from its second year, the total value of its activity shall not exceed EUR5 million, as resulting from its last annually approved balance sheets.
- It shall not be the result of a merger, de-merger or transfer of a business or a part of one.
Finally, the registration of the start-up with the special register provided by the relevant companies’ registry is no longer subject to a 60-day term.