25 05 2016 Italian Startup Updates – Innovation calls for people.

We recently analyzed the interesting phenomenon of the Italian innovative startups and the support provided by the new regulation, benefits which foreign citizens can claim as well.

The reform – started in 2012 – aims to redefine Italy as the European hub for innovative enterprises and it seems that it has not come to an end yet. Briefly, the above-mentioned new provisions do not merely generate new investment opportunities, nor only raise new qualified job offers, but include new tax benefits as well (see our report on the topic of January 28th 2016).

Spring 2016 shows a further step in this ambitious project: April ended with the launch of the new IT platform wanted by the Ministry of Economic Development with the Ministry of Foreign Affairs, for the program Italy Startup Hub, a project designed in order to attract and assist foreign innovators, considering their presence in Italy and their talents a fundamental tile in the frame of the project development. Italy Startup Hub aims to favor the transit and permanence of extra-European workers and investors, permitting them to obtain an easier access or extend their permanence in Italy. The website introduces a uniform system with the aim of speeding up and digitizing all the conversion and release procedures for residence permits for non-European citizens, in case their intention to enter or extend their permanence in Italy is related to the need of working with or investing in innovative enterprises.

Further information on the procedures is available on the government website (English version).

We propose a short summary about the previous report:

The acceleration program of startups took place at different timings.

The most important passages are the decree “Crescita 2.0” (Italian for “growth”) converted in Law in 2012 and the following “Investment Compact” 2015, known for extending to Innovative SMEs many of the benefits for innovative startups.

The general regulation liberalized the remuneration schemes, stimulated the access to foreign markets, eased the equity investments, and introduced new innovative instruments to collect assets. On the latest, please note that Italy has been the first legal system in the world to specifically regulate equity crowdfunding.

Among the tax benefits granted by this regulation, the most interesting are the tax credits following from the hiring of qualified personnel (35%), as well as those referred to investments for R&D (years 2015-2019) – which we already discussed.

Compared to the latter, in March 2016 the Revenue Office issued the “Notice 5/E” clarifying that tax credits for R&D can be used not only for internal research investments, but also in case the enterprise availed itself of external subjects in order to complete those activities, therefore introducing in Italy the concept of open innovation. We remind that tax credit is conferred to all enterprises (Italian and foreign – including consortiums, enterprises networks and stable non-resident enterprises organizations) which perform/will perform R&D investments from the tax year after December 31st 2014 until December 31st 2019.

Looking forward to evaluating the development coming from the new regulation, the expansion of the innovative enterprises in Italy is undeniable, considering the current presence in the country of about 5,500 innovative startups, as it is stated in the Italian registry of Enterprises’ report, updated at the first quarter of 2016.