The 2017 Italian Budget Law introduced important innovations in terms of incentives for investments in start-ups and innovative SMEs.
Investors interested in the initiatives proposed on the portal walliance.eu are reminded that the typical investment offers proposed on the Walliance portal do not provide for any tax incentives, as they are inherent to fundraisers for SMEs (NON-innovative).
INCENTIVES FOR INVESTORS
Investors, individuals or companies who from 2017 will choose to finance innovative start-ups or innovative SMEs can benefit from tax relief in the amount of 30% of the amount invested. For natural persons, a maximum quantitative limit on the investment on which to determine the deduction is established, equal to € 1,000,000 per year, with a minimum maintenance period of 3 years. For companies, the maximum investment limit deductible from the tax basis is equal to € 1,800,000 per year and, as for natural persons, it must maintain the investment for at least 3 years.
It is recommended that investors interested in the initiatives proposed on the portal walliance.eu contact their tax advisors for the appropriate best management of the incentives due.
INCENTIVES FOR INNOVATIVE START-UPS
In addition to the possibility to raise risk capital through online portfolios (equity crowdfunding), the following additional concessions are permitted for innovative start-ups and SMEs:
- exemption from stamp duty and administrative fees due for registration in the Register of Companies and the annual fee to the Chambers of Commerce;
- tax benefits for directors, employees or employees remunerated through financial instruments (e.g. stock options): sums paid in the form of financial instruments or option rights do not contribute to the formation of taxable income for the recipients;
- 35% tax credit on permanent hiring of highly qualified personnel up to a maximum of 200,000 euros per year for each company;
- the right to extend the so-called "postponement" of losses for twelve months and, in cases of reduction below the statutory minimum, the right to defer the decision on recapitalization by the end of the following year;
- for innovative start-ups established in the form of s.r.l., the right to use institutions admitted only in the s.p.a.s, in particular, the free determination of the rights attributed to the shareholders or the issue of participatory shareholding financial instruments;
- the right to make an exception from the absolute prohibition of transactions on its shareholdings, if the transaction is carried out in implementation of incentive plans that provide for the assignment of financial instruments to employees, collaborators, members of the administrative body or suppliers of works or services, including professional ones (stock options and work for equity);
- the right to issue financial instruments provided with equity rights or even administrative rights, excluding the right to vote in the decisions of the shareholders:
- support for internationalization through the services provided by the ICE Agency for the promotion abroad and internationalization of Italian companies and by Desk Italy;
- greater possibilities in managing an innovative start-up company crisis; possibility of hiring personnel with fixed-term contracts with a minimum duration of 6 months and a maximum of 36 months that can be extended for another 12 months (thus reaching a total of 48 months); simplified, free and direct access to the Central Guarantee Fund, the government fund that facilitates access to credit by granting guarantees on bank loans.
INCENTIVES FOR INNOVATIVE SMEs
In summary, the following incentives are envisaged:
- exemption from stamp duty: the innovative SMEs are exempt from the stamp duty due for the obligations relating to registration in the Register of companies and Chambers of Commerce;
- exceptions to ordinary corporate law: the most significant exemptions are provided for innovative SMEs set up in the form of an s.r.l., for which the creation of categories of shares with particular rights is permitted;
- the ability to perform transactions on their shares; the possibility of issuing participatory shareholding financial instruments;
- the public offering of shares of capital;
- facilitating losses: in the event of systematic losses, innovative SMEs benefit from a special regime on the reduction of the share capital, including a one-year moratorium for the repayment of losses exceeding one third (the deadline is postponed to the second successive year).
- inapplicability of the discipline on shell companies: the innovative SME is not required to perform the operations test to verify the status of a non-operating company.
- remuneration through equity instruments: the innovative SME can remunerate its employees with instruments for participation in the share capital (such as stock options), and external service providers through work-for-equity schemes. Such instruments are based on an advantageous tax and social security system, namely they do not fall within taxable income but are subject only to capital gain taxation.
- tax incentives for investments in innovative SMEs that have been operating in the market for less than seven years since their first commercial sale originating from natural persons (IRPEF deduction of 19% of the investment up to a maximum investment amounting to 500,000 euros) and legal persons (deduction from the taxable IRES of 20% of the investment up to a maximum investment amounting to 1.8 million euros). The incentives apply both to direct investments and to indirect investments through UCIs and other companies that invest mainly in this type of company. For innovative SMEs that have been operating on the market for more than seven years since their first commercial sale, these incentives apply if they are able to present a plan to develop new or significantly improved products, services or processes compared to the state of the art in the concerned sector.
- equity crowdfunding: even innovative SMEs such as innovative start-ups can launch campaigns to raise capital through authorized online portals. In addition, with regard to equity crowdfunding, the Investment Compact has introduced two further innovations: even collective investment bodies and corporations that invest mainly in innovative start-ups and innovative SMEs can raise capital through online authorized portals, allowing diversification and reduction of portfolio risk for the retail investor; moreover, as an exception to ordinary regulations, the transfer of innovative start-ups and innovative SMEs can be "dematerialized", with the consequent reduction of related charges with a view to streamlining the secondary market.
- Simplified, free and direct intervention to the Guarantee Fund for Small and Medium Enterprises, a public fund that facilitates bank financing through the granting of a loan guarantee. This guarantee covers up to 80% of the credit disbursed by the bank to the innovative SME, up to a maximum of 2.5 million euros, and is granted based on extremely simplified access criteria, with an investigation that benefits from a priority channel.
- Support in the internationalization process by the ICE Agency: includes assistance in regulatory, corporate, tax, real estate, contracts and credit matters, hospitality free of charge at the main international fairs and events, and activities aimed at encouraging introducing innovative SMEs to potential investors.
All measures can be used by innovative SMEs following registration in the special section of the Register.