Italy is one of the best countries to set up a Start-up Business

The Italian government introduced a law in 2012, Decree n. 179 for the first time to encourage the development of innovative start-up businesses. Following the United Kingdom’s exit from the European Union cross-border trade between companies based in the UK with those based in Italy and other European countries has become considerably more challenging with new procedures and tariffs slowing down and hampering the speed of transactions. Amendments to the Decree in December 2012 and more recently in May 2020, known as the Relaunch Decree have strengthened the measures incorporated in the initial law and are aimed at encouraging innovative start-ups that will broaden the commercial culture in Italy, attracting investment and expertise, particularly related to technology.

In order to avoid the current, often lengthy, procedures that now impede cross-border trade between the UK and Italy, the creation of a start-up business in Italy, under the framework for start-up companies set out in the above-mentioned Decree, is the best way to enjoy unhampered cross-border trading. There is a strong focus on The significant benefits, such as:

• Favourable tax incentives when investing in an innovative start-up
• Access to Italian Central Guarantee Fund (CGF) – the guarantee scheme established to support small and medium-sized enterprises which facilitate credit by guaranteeing bank credit and capital investments.
• Access to the Smart & Start Italia programme which offers provides interest-free loans to innovative start-ups. Aimed mainly at entrepreneurs in less developed regions, businesses owned by women or young entrepreneurs’ and projects involving science.

Giovanni Costagliola, a trainee lawyer, points out that “many companies that are considering internationalisation, recognise that Italy is at the forefront of the main European partners and is a gateway for businesses looking to access both European and international markets.” Giovanni further mentioned “The Italian government has introduced measures to simplify bureaucracy and reduce administrative barriers for businesses. Initiatives to make it easier for non-EU entrepreneurs to establish their startups in Italy.”

To benefit from this initiative, you can also start a business at the same time as you complete the start-up form. This entity is governed by Italian corporate law and the incorporation of which is made by contract or by unilateral deed, or established in the form of a cooperative, under Italian law or a Societas Europaea, resident in  Italy pursuant to article 73 of the decree of the President of the Republic of 22 December 1986, n. 917, whose shares or quotas representing the share capital are not listed on a regulated market or on a multilateral trading system.

A self-employment visa that extends for one year, renewable on expiry providing the requirements are met. The Italian Start-up Visa has been ranked as the second-best in Europe for the following reasons:

• The process is fully digitalised: the candidate can send his documentation exclusively via email to italiastartupvisa@mise.gov.it;
• The process can be carried out entirely in English: application forms, guidelines and customer care services, as well as the program website itself, are all offered in the English language in order to facilitate who is not familiar to Italian.
• The Visa issuance procedure is centralized: a single administration (the MISE), manages all the necessary communications with the administrations involved (Questura (police headquarters), diplomatic-consular offices) and plays the role of sole interlocutor for visa candidate
• The no impediment document (Nulla Osta) for granting a visa is usually issued within 30 days of the application.

The start-up company’s core business should be on technological innovation, which is a quite flexible concept, as the Minister of Made in Italy claimed. The start-up should focus on the development and production of products of something new in the market

Please see below the main requirements for a start-up:

a) The company is newly set up or it has been established for less than five years. 

b) The company’s headquarters must be in Italy, unless the company is based within the European Union (or countries that are part of the European Economic Area) and the production site or branch is in Italy.

c) It has an annual turnover of less than five million euros.

d) The company does not distribute and has not distributed profits.

e) Involves a technological innovation as its exclusive or prevalent business.

f) The company is not formed by merger, demerger or following the transfer of a company or business unit.

g) The company’s innovative subject should cover one of the following requirements:

1) A 15% share of the higher value between turnover and annual costs is attributable to research and development activities;

2) At least one third of employees are will aquire a PhD, or two or three partners or employees have a Master’s degree.

3) The company is the owner, depositary or licensee of a registered license (industrial property right) or owner of a registered original computer program.

The financial requirements are that at least €50.000 is invested. The investment can be made by third-party investor. The financial resources may include loans granted by venture capital funds or other investors, the investor’s own funds, loans obtained through the portals for raising capital referred to in articles 50-quinquies and 100-ter pursuant to legislative decree 24 February 1998, n. 58 (equity crowdfunding portals), other loans issued by Italian or foreign governmental or non-governmental entities, or a combination of the aforementioned categories. The documentation proving the availability of the sum must consist of one or more verification letters issued by the banks, where the funds are deposited and/or letters confirming the financing by venture capital funds, other investors and/or portals of equity crowdfunding.

Giambrone & Partners corporate and commercial lawyers in our offices in Italy and the UK can help with all aspects of the regulatory and legal issues involved with setting up a start-up business in Italy. Our lawyers have assisted a considerable number of entrepreneurs, both large and small, to set up a company to facilitate cross-border trade.

Giovanni Costagliola is based in the Palermo office in Sicily, he assists our commercial clients with issues such as cross-border contracts, assisting with access to government funding, set up of new businesses and regulatory issues.

For more information on creating a start-up business in Italy please contact Giovanni’s clerk Helena Balster at HB@giambronelaw.com or please click here.