Deduction for investors
Individuals who invest in the capital of an innovative startup receive a tax deduction, with an ordinary regime and a more favourable one under the de minimis rules.
Companies · Innovative business
The innovative startup in Italy
It is not a status you simply give yourself: you declare it, register it and confirm it every year. Miss the confirmation and the company leaves the special section of the register, losing everything that comes with it.
01 · Who qualifies
The requirements for innovative startup status
An innovative startup is a limited company, including a cooperative, that meets a series of objective requirements and at least one of three alternative requirements linked to innovation.
- Being a limited company: SRL, SRLS, SPA or cooperative, not listed on a stock exchange.
- Having been formed no more than the number of years set by law.
- Having its main office in Italy, or in another EU State with a production site in Italy.
- Having an annual value of production within the set threshold.
- Not distributing profits for as long as it holds the status.
- Having as its exclusive or main business purpose the development, production and sale of innovative products or services with high technological value.
- Not having been created through a merger, demerger or transfer of a business unit.
| Alternative requirement (at least one) | How it is shown |
|---|---|
| Research and development spending | A minimum percentage of the higher of costs and value of production, detailed in the notes to the accounts |
| Qualified staff | A minimum share of PhD students, PhD holders, researchers or holders of a master's degree |
| Industrial property right | Ownership or licence of a patent, or registered software |
The ban on distributing profits for as long as the status lasts is the most underestimated constraint: anyone planning to reward shareholders in the first years must bear in mind that the status prevents it, and that distributing profits means losing the status.
02 · How to get in
How to obtain the status
The status is acquired by registering in the special section of the Registro delle imprese (the Companies Register), after self-certifying that the requirements are met.
Formation
By an ordinary notarial deed, like any SRL. The business purpose must be written carefully, because it has to reflect the innovative nature of the company.
Self-certification
The legal representative declares that the requirements are met, detailing the alternative requirement chosen.
Registration
An online application to the Chamber of Commerce for entry in the special section. Registration is exempt from administrative charges.
Disclosure
The data is published and can be consulted: transparency is a condition of the regime, not a side effect.
03 · What you get
The benefits of innovative startup status
They are of different kinds: tax, company law, procedural. In practice the most relevant one concerns those who invest, not the company itself.
Deduction for investing companies
Companies that invest can deduct the investment from their taxable income, within the set limits.
Exceptions to company law
Classes of shares with different rights, transactions in own shares, public offerings: exceptions not allowed to ordinary SRLs.
Exemption from Chamber of Commerce charges
Exemption from stamp duty and administrative charges for filings with the Companies Register.
Rules on losses
Longer deadlines for restoring capital in the event of significant losses.
Incentive plans
A favourable tax regime for stock options and work for equity granted to collaborators and suppliers.
Why the deduction matters
It is the lever that makes fundraising possible.
- It lowers the effective cost of the investment for those putting in capital
- It requires the shareholding to be held for a minimum period
- Selling early means giving the benefit back
- It must be documented with the certificate issued by the company
04 · Keeping the status
The annual obligations
The status is not acquired once and for all: it has to be confirmed, and the confirmation has a precise deadline.
- By the annual deadline the legal representative must certify that the requirements are still met, with a declaration to the Companies Register.
- The information published in the special section must be updated.
- The annual accounts must be filed within the ordinary deadlines, with details of research and development spending in the notes to the accounts.
- Failing to file or to confirm leads to removal ex officio from the special section.
- Losing a requirement must be reported, not left to be discovered.
- The status also has a maximum duration from formation, after which the company leaves even if it still meets the requirements.
Removal from the special section does not dissolve the company, which carries on as an ordinary SRL. It does, however, end the relief for the future, and the effect on the deductions investors have already claimed needs to be assessed.
05 · The next step
After the startup: the innovative SME
When the startup leaves the special section because time has run out, there is a path to continuity.
- The innovative SME (PMI innovativa) is a separate status, with no age limit from formation.
- The requirements are partly different: the latest annual accounts must be audited, and the alternative criteria have thresholds of their own.
- It allows the company to keep part of the tax relief, including the relief for investors.
- The switch is not automatic: you have to apply for entry in the relevant special section.
- It needs planning well ahead, because it requires audited accounts and obligations that cannot be improvised.
06 · Before you start
When innovative startup status is really worth it
The status has a running cost and some constraints. It is worth asking whether it serves the project or only the idea you have of it.
- It is worth it if you plan to raise capital from third parties: the deduction is a concrete argument for investors.
- It is worth it if you want to use incentive tools for collaborators and suppliers.
- It is worth it if you really need the company law exceptions, for example classes of shares with different rights.
- It is not worth it if you plan to distribute profits in the first years: the ban is absolute.
- It is not worth it if the business is not genuinely innovative: the self-certification carries personal liability.
- It needs weighing against the administrative workload: these obligations come on top of those of an ordinary SRL.
The innovation requirement is not a phrase to insert in the business purpose: it is a substantive condition, self-certified by the legal representative and open to checks. Taking on the status for formal convenience, without substance, is a risk that falls on the person who signs.
Frequently asked
The questions that keep coming up
Can I set up an innovative startup as an SRLS?
Yes, the simplified SRL is compatible with the status, provided all the requirements are met.
Bear in mind, though, that the standard articles of an SRLS cannot be changed, and this limits the use of the company law exceptions available to startups, which are among the most useful benefits.
Do I need a patent to qualify?
No, the industrial property right is only one of the three alternative requirements. A minimum share of research and development spending, or a minimum share of highly qualified staff, is enough instead.
Software registered with the SIAE (the Italian authors' and publishers' society) also counts as a qualifying right, and it is the most practical route for many digital ventures.
Can I distribute profits if the year goes well?
No. The ban on distributing profits applies for as long as the status lasts and is an essential condition: distributing means losing the status.
Profits can be set aside in reserves and used for the business. If the aim is to reward shareholders in the short term, the status is not the right tool.
What happens if I forget the annual confirmation?
The company is removed ex officio from the special section and loses the status, and the relief ends for the future.
The company carries on as an ordinary SRL, without being dissolved. The effects on the deductions investors have already claimed must be assessed, however, since in some cases they remain conditional on keeping the shareholding.
Let's talk
The most tangible advantage is the tax deduction for investors
It is the tool that makes the startup attractive to those putting in capital. It has to be built with care, though, because the requirements apply to both sides.