The rebirth of the Innovative Italy
Italy is currently focussing on furthering its ambition to become a truly attractive international hub for innovation and entrepreneurship, and The Italian Startup Act is one of the most advanced legislative packages designed for innovative enterprises in the EU region.
In 2016, Italy was ranked as the second best country in the EU for the adoption of the policy roadmap recommended by the Startup Manifesto. The Italian government is strongly focused on the promotion of innovative startups (startup innovativa) as a means to foster an innovation-oriented entrepreneurial culture, to attract international capital and talent, and to boost economic growth in general.
This advantageous policy is very attractive, not only for the local economy, but also for international entrepreneurs. Currently startups can be incorporated free-of-charge, simply by using a digital signature online, saving a lot of money and time. By the process of online self-certification, startups get easy access to the designated section of the Italian Business Register and the #ItalyFrontiers database. They are exempt from annual fees to the Chamber of Commerce and other registration fees and duty stamps to the Business Register.
Italian law greatly incentivizes investment in innovative startups. For individuals investing in startups, the 2017 Budget Law allows a reduction in personal income tax (IRPEF) of 30% of the amount invested, up to maximum of sum of € 1 million. For legal entities there is a fiscal deduction of the taxable income for company tax purposes (IRAP) of 30% of the invested amount (up to maximum of €1.8 million).
Startups can also enjoy very attractive conditions for, and easier access to, bank loans. Free, fast-track access to the governmental SME Guarantee Fund provides guarantees for bank loans without the evaluation of business plans or balance sheets. The guarantee covers up to 80% of the bank loan, up to maximum €2.5 million per startup.
Startups can also transfer fiscal losses to their listed sponsor companies (where they hold at least 20% of their capital shares). Furthermore, in the case of startup failure, the ‘fail fast‘ procedure exempts startups from the regular legislation of bankruptcy. The new process is faster and cheaper, and is designed to help entrepreneurs to get back on track as soon as possible.
Investments in R&D activities are also entitled to tax credits, such as the 50% tax credit on incremental R&D investments on a 5-year period, with a maximum sum granted of €20 million. The incentive is applicable to both intramural and extramural activities. There are also fiscal benefits on income from the use of IP. Companies can exclude 50% of the income coming from the commercial use of intangible assets (copyrights, patents, commercial brands etc) from taxation.
Startups can also benefit from various supportive programs and discounted services from the Italian Trade Agency, the Smart&Start Italia financing scheme, and others.
The Italia Startup Visa is another great step towards the internationalization of the Italian entrepreneurial ecosystem. A fast-track (up to 30 days) online procedure facilitates an investor visa, for those investing €1M in mature start up and €500K in innovative start up, which acts as a self-employment visa for non-EU citizens in Italy.
Financing institutions and private investors seem to be rapidly gaining confidence in the new governmental initiatives which are promoting the entrepreneurial ecosystem in Italy. The ITAtech Fund, launched at the end of 2016 by the European Investment Fund (EIF) and Cassa depositi e prestiti (CDP) is dedicated to supporting technology transfer in Italy with up to EUR 200 million in financing. The EIF and the CDP aim to enhance access to equity and innovation investments for businesses, from seed and start-up stages through to growth and expansion.
The private investment scene has also been growing, both in terms of the volume of already existing funds and creation of new ones. New associations of business angels and venture capitalists have been emerging recently, in addition to the growing commitment from the private equity firms and family business offices. Italy seems to be regaining its reputation as an innovative country, as evidenced by the significant rise in the risk-taking appetite of investors primarily focused on innovation. Moreover, there is an increasing amount of talent returning from abroad, which brings with it multicultural experience and knowledge. The recent changes are significantly influencing the development of a strong innovative ecosystem to fuel the entrepreneurial journey.
Keeping this in mind, and celebrating innovative developments in Italy, the Zcube research venture from Zambon Pharma has launched the Open Accelerator (OA) program. OA is the first made-in-Italy international acceleration program in the field of life science which aims to identify and accelerate best ideas and projects world-wide, while at the same time, enriching the Italian entrepreneurial ecosystem and sharing best international practices and talents. More information can be found on www.openaccelerator.it