Innovative start-ups are a key pillar in the Italian entrepreneurial ecosystem, benefiting from a package of incentives and regulatory simplifications designed to foster the growth of high-tech companies. With the recent 2025 regulatory updates, Italy consolidates its position as a European hub for innovation, combining competitive tax incentives, corporate flexibility and support for global expansion. To navigate the complexity of these regulations and maximise the benefits, expert advice is crucial.

To gain access to the special section of the Companies Register and benefit from the facilities provided, start-ups must meet the following criteria:

• Being a micro, small or medium-sized enterprise according to Recommendation 2003/361/EC
• Not carrying out agency or consultancy work as a main activity
• Be established for less than 3 years (extendable to 5 or 9 years with specific requirements)
• Having registered office and business interests in Italy
• Annual turnover not exceeding EUR 5 million
• Do not distribute profits
• Focus on high-tech products/services
• Not resulting from mergers, divisions or transfers of business units

• R&D expenditure: equal to 25% (increased from 15% previously) of the higher of cost and value of production
• Qualified personnel: 50 per cent of the workforce (increased from 33 per cent) with a PhD, master’s degree in STEM disciplines, or recognised technology certifications
• Intellectual property: ownership of industrial patents, registered software, or rights to new plant varieties related to the corporate purpose

The standard period of registration in the special section is three years, but significant extensions are possible:

Registration can be extended for a further 2 years if the start-up meets at least one of the following criteria:

• Increase in R&D expenditure of at least 25 per cent
• Experimentation contract with a PA
• Increase in revenue or employment of at least 50 per cent between the second and third year
• Capital reinforcement: creation of a capital reserve in excess of EUR 50,000 through convertible loans, capital increases at a premium or certified investment instruments
• Obtaining a registered patent

After five years, membership can be further extended for two two-year periods with:

• Capital increase of more than EUR 1 million by an UCI
• 100% increase in annual revenues from operations

Start-ups with sustained growth (turnover +50% per annum or recruitment +30%) are eligible:

• Extension of tax benefits up to 9 years
• Facilitated financing through Smart&Start Italia, with non-repayable contributions of 30% in the South

• On incorporation: IRPEF deduction of 30% of the amount invested in the share capital of innovative start-ups
• On capital increase: IRPEF deduction of 65% (significant increase from the previous 30%) of the investment made
• Upper limit: Deductible investment up to EUR 1.5 million (increased from the previous limit of 1 million)
• Maintenance period: The investment must be maintained for at least 3 years (increased from the previous 2 years)

As an alternative to the ordinary deduction described above, an IRPEF deduction equal to 50% of the amount invested by the taxpayer in the share capital of one or more innovative start-ups, up to a maximum annual investment of EUR 100,000 (i.e. with a deduction amount not exceeding EUR 50,000 for each tax period), within the limits of the ‘de minimis’ regime, is recognised for investments made after 1 January 2020. This IRPEF deduction has been increased to 65 per cent as of 1 January 2025.

The deduction applies only to innovative start-ups until the third year of registration in the special section of the Companies Register. For investments made after 2024, if the de minimis deduction exceeds the gross tax liability, a tax credit is granted for the excess, which can be used in the tax return to reduce taxes due or offset in the F24 form.

• On incorporation and capital increase: deduction from income of 30% of the amount invested
• Upper limit: Deductible investment up to EUR 2 million (increased from the previous limit of 1.8 million)
• Maintenance period: The investment must be maintained for at least 3 years

• Tax credit: 50 per cent (increased from the previous 30 per cent) on venture capital investments of innovative start-ups
• Applicable to: Companies other than innovative start-ups that make investments in share capital
• Ceiling: EUR 2 million per investor

• 8% tax credit on investments in start-ups, up to EUR 500,000 per year

• Qualified shareholdings: Tax incentives for capital increases do not apply to investors owning more than 25 per cent of the share capital of the innovative start-up
• Indirect investments: The incentives also apply in the case of investments through UCITS or other companies that invest predominantly in innovative start-ups
• Services provided to the start-up: The right to deduct is excluded if the taxpayer is also a provider of services to the start-up, directly or through a subsidiary or associate, for a turnover exceeding 25% of the eligible investment

The relief is available up to a total amount of eligible contributions not exceeding €15 million for each innovative start-up. For the purposes of calculating this maximum amount, all eligible contributions received by the innovative start-up during the tax periods in which the relief scheme is in force are relevant.

• Cash contributions to innovative start-ups
• Offsetting of claims when subscribing to capital increases
• Purchase of shares in innovative start-ups or companies that invest primarily in innovative start-ups
• Shares of new issues by innovative start-ups
• Investments in units of UCIs investing predominantly in innovative start-ups

• Investments in innovative start-ups made through ICOs or companies (directly or indirectly) with public participation
• Investments made in innovative start-ups that qualify as ‘firms in difficulty’ as defined by the European Commission 2004/C 244/02
• Investments in innovative start-ups operating in the shipbuilding and coal and steel sectors

• Guaranteed coverage: Up to 85% (increased from 80%) on loans and collateral, with a maximum ceiling of EUR 3.5 million per start-up
• Simplified procedures: Self-certification in lieu of bank due diligence, with priority in disbursements

• Annual Chamber Fees
• Stamp duty on articles of incorporation and amendments to articles of association

• Access to ‘fail-fast’ liquidation procedures
• Exclusion from traditional bankruptcy

• Share capital: Postponement of the reduction below the legal minimum until the third year of operation
• Multiple-voting shares: Possibility of creating share classes with voting rights that are not proportional to the shareholding
• Equity crowdfunding: Enabling public capital raising through regulated platforms

• Tax credits: up to 50% of wage costs for hiring researchers, engineers and ICT professionals
• Stock options: Tax exemption for allocating financial instruments to employees and collaborators, excluding buy-back clauses

• Startup Italia Visa: Accelerated procedures for entry of non-EU founders, with project evaluation by the MISE Technical Committee
• Partnership with ICE: Free access to international trade fairs, dedicated desks for logistic-legal support, and matchmaking with foreign investors

• S.r.l. (most common and flexible form)
• Simplified limited liability company (with minimum capital of 1€)
• S.p.A. (for projects requiring significant capital)
• Co-operative societies (for collaborative projects)

• Provide specific clauses to facilitate the entry of investors
• Defining exit mechanisms for founding members
• Structuring incentive plans for employees and collaborators
• Implement governance aligned with international best practices

• Registration via digital platform startup.registroimprese.it
• Six-monthly confirmation of fulfilment of requirements through self-certification
• Constant monitoring of relevant metrics (R&D, staff qualifications)

For innovative start-ups established after 1.1.2020, operating in the environmental, renewable energy and health sectors, a tax credit is provided for expenses incurred for research and development activities aimed at creating innovative solutions for environmental sustainability and the reduction of energy consumption. The credit is recognised:

• Up to a maximum amount of 200,000 euro
• Not exceeding 20% of the eligible expenditure
• Within the overall limit of EUR 2 million foreseen in 2023
• Within the limits of the ‘de minimis’ regime

The tax credit can be used as a set-off in the F24 form without applying the ordinary limits and is irrelevant for tax purposes (it does not contribute to the formation of business income and the IRAP tax base).

Article 27 of DL 179/2012 provides for the exemption, for both tax and contribution purposes, of employment income deriving from the allocation of financial instruments aimed at remunerating qualified labour and consulting services in favour of innovative start-ups.

For innovative start-ups, the rules on shell companies, as set out in Article 30 of Law 724/94, do not apply.

Facilities for innovative start-ups have a maximum duration of five years from the date of registration in the special section of the Companies Register. Article 38 co. 5 of Decree-Law 34/2020 extended by 12 months the term of permanence in the special section of the Companies Register for start-ups registered as of 19.5.2020.

The 2025 regulatory framework significantly enhances opportunities for innovative start-ups in Italy, but also requires compliance with stricter requirements, especially in R&D and personnel qualification, to maintain access to benefits.

The incentive strategy aims to support not only the birth but also the growth of innovative start-ups, with a focus on the scale-up and internationalisation phases.

The latest regulatory updates of 2024-2025, including the increase to 65 per cent of the IRPEF deduction under the ‘de minimis’ regime and the possibility of using the surplus as a tax credit, have further strengthened the incentive system for investments in innovative start-ups.

A single text is being developed to reorganise existing provisions on innovative start-ups, innovative SMEs and start-up incubators and accelerators, which promises to simplify and coordinate existing legislation.

For a customised regulatory compliance analysis or to identify the optimal investment structures for your innovative start-up, contact the Taxdry team for a dedicated consultation.