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4 min read
Italy for eXtrepreneurs
Italy’s 1.5 trillion euro GDP is 10th among the OECD nations and 4th within the European countries. Furthermore, the WTO ranks it at 10th place in terms of world trade for merchandise.
With its rich and vibrant art and culture, Italy has fostered creativity and innovation and funded industrial and global business development. As per a KPMG report, “Made in Italy” is the 3rd best known brand in the world. This provides eXtrepreneurs an opportunity to leverage the global image of Italy. Various resources such as a highly educated workforce, extensive network of manufacturing SMEs, strategic location to tap into various European markets and one of the most unique features of the Italian startup ecosystem: a flexible and tailor-made labour law make it a top choice for founders.
As of 2020, more than 631,000 businesses have been setup by foreign founders in Italy. The Italian economy offers robust investment incentives and has pioneered capital raising tools for startups, thus providing an ideal environment for startups to develop and grow.
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Italy Startup Ecosystem
As per the latest World Bank data on “Ease of Doing Business”, Italy is ranked 58th among 190 economies in the world with Italy’s Startup Ecosystem ranked at 30th place globally. 20+cities, including Turin, Bologna, Naples, Rome and one of the most favoured spots for setting up business: Milan, rank among the top 1000 for fostering a vibrant startup environment.
The Italian Government, in 2012 revamped the startup ecosystem by introducing the Italian Startup Act, which provides tax breaks on early-stage investments and R&D credits and also launched the Italia Startup Visa Policy in 2014. Moreover, the Smart&Start Italia program by the Ministry of Economic Development, focuses on supporting the birth and growth of innovative startups, with various incentives for founders.
Coupling this with the rich and attractive talent pool available in Italy as well as science and technology parks, the European nation poses an attractive option for eXtrepreneurs to build their business.
Italy Company Formation
Selecting the right type of entity structure for your business is one of the crucial decisions to be made by an extrépreneur* while planning to establish their business in Italy. This decision shall impact the various aspects of a business such as compliance costs, tax structuring and future expansion plans of the organisation.
Italy has two popular types of entity classifications for extrépreneurs viz. Private Limited Company (S.R.L.) & Limited Partnership (S.A.S.). S.R.Ls. are the top choice for them who wish to operate with all the benefits of a company but avoid the hassle that comes with it. It offers high flexibility in terms of investment (initial capital contribution can be just $1) and paves the path for future enlistment on the share market.
On the other hand, with its ease of incorporation and liquidation, it is the perfect choice for founders working in the professional domain.
Various factors play an important role in determining the appropriate business structure that would thrive in the Italian Startup Ecosystem.
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4 min read
Overview
In 2014, the Italian Government, in order to encourage foreign innovation in its economy had launched the Italia Startup Visa Programme. The Programme has had tremendous success leading to sustainable growth, technological development and employment in key industrial sectors. The programme is aimed at harnessing the talent of non-EU country innovator-founders and provides many benefits: robust tax-relief policies on seed and venture capital investments, introduction of equity crowd-funding provisions, minimizing compliances, etc,. Thus, the Programme is a gateway for extrepreneurs who have a unique business idea and are looking to establish their business in Italy. As per the last ISV Report released by the Ministry of Economic Development in 2019, 481 applications were received under the programme of which only 250 had been approved in January 2020. The highest rate of acceptance was found to be among Brazillians (83%), followed closely by Ukrainians (81%) and Japanese (80%). On the other hand Pakistan faced the maximum rejections, with only 1 out of every 10 being accepted, while 1 of every 5 applications from India had been accepted.
Highlights
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Tax incentives for investment in the capital of innovative startups
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Equity crowdfunding for any company since 2017
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Low minimum investment requirement of EUR 50,000 for the entire team
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Can enjoy ‘startup’ status for up to 5 years
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No restriction on age, gender or background of founder
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Certificate of No Impediment to the granting of the visa is normally released within 30 days of submission of application
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ISV to grant Certificates of No Impediment to 5 non-EU founders (In exceptional cases, 10) per project
Eligibility
What qualifies as a “Innovative Startup” under Italia Startup Visa programme?
- Must be a limited company;
- Must be a new business or operational for a period of less than 5 years;
- Headquarters must be in Italy or in any other EU country, with at least a production site branch in Italy;
- It should not distribute dividends;
- It shall not be listed on a regulated market or multilateral trading system;
- Annual turnover must be below €5 million;
- Should not be an entity formed as of a result of merger, split-up or selling off
- Develop, produce and commercialize innovative products or services that is solely and primarily focused on technological innovation;
- A startup is considered “innovative” if it fulfills any of the 3 conditions:
- Expenses in R&D and innovation are at least 15% of either its annual costs or its turnover (the largest value is considered); or
- employs highly qualified personnel (at least 1/3 PhD holders and students, or researchers, or at least 2/3 Master’s graduates); or
- is the owner, depositary or licensee of a registered patent, or the owner of a registered software
Renewal
- Once a founder applies for the Italia Startup Visa, on qualifying for the same, he obtains a 1-year startup self employment visa.
- Within 8 days of receipt of Visa, founder shall apply for 1-year self-employment residence permit after submitting the requisite documents.
- After 1 year, no later than 60 days before the date of expiry of the residency permit, the founder can apply for a 2 year self-employment residence permit, after submitting the below-mentioned documents to the local police headquarters (Questura) in person:
- Visura Camerale: Certificate of Incorporation, AOA and file search report of the innovative startup;
- Evidence of adequate annual income;
- The business established should meet all the requirements of being an innovative startup
- Be registered in the special section of the Business Register
For renewal of a residence permit, the applicant should have remained in Italy for a continuous duration of 6 months prior to application for renewal.
Note: The 2 year self-employment residence permit can be renewed for a further two years. The Italia Startup Visa is valid for maximum 5 years.
Permanent Status
After 5 years, the founder (non-EU Citizen) can apply for a long-term residence permit which has no expiration date.
- Must meet all the conditions of being a innovative startup as per the Italian Startup Act, 2012
- Have a minimum income that is not lower than the amount of welfare allowance
- Be a regular resident of Italy for 5 years (should not be away from the Italian territory for more than 10 months in the 5-year block period or for 6 months continuously)
- Provide Police Clearance Certificates
- Pass an Italian language test, equivalent to A2 Level
- Furnish evidence of having suitable accommodation
Process and Timelines
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Renewal
Permanent Status
Process and Timelines
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Eligibility
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Renewal
Permanent Status
Process and Timelines
DG Country Comparison ToolTM
CompareQuick peek at the top countries for eXtrepreneurs.
This tool compares the top nations inviting eXtrepreneurs on over 40 vital parameters to provide a holistic view and a comprehensive perspective of the Entrepreneur mobility options, the start up ecosystem and the policy benefits, to be availed.