Investment Incentives

The Italian market offers numerous financial incentives aimed at increasing the attractiveness of the country as a FDIs destination, mainly by encouraging R&D operations, supporting industrial crisis areas, and fostering the growth of new innovative enterprises.


Discover more on our guide “Doing business in Italy


  • Tax credits on assets

A tax credit up to 20% (depending on total investment size) is recognized to companies of all sizes investing in new tangible and intangible capital goods 4.0 according to the Industry 4.0 national strategy. 

  • Patent Box

The Patent Box is a voluntary fiscal regime that allows companies to deduct an extra 110% of their qualifying R&D expenses from their tax base, as well as the normal 100% deduction, to make a total 210% deduction. Eligible R&D expenses are those aimed at the development of qualified intangible assets (software protected by copyright, industrial patents, designs and models).

  • Employment bonuses

Employment bonuses are reductions, or total exemptions, in social security contributions. The benefit is a labor cost reduction, recognized to employers that hire specific categories of people, including people under 36 and unemployed women of any age, both with a 100% reduction, as well as for all already existing and new employees in Southern Italy (30% reduction).

  • Fiscal Benefits for inpatriate workers

Inpatriate workers can benefit from a reduction equal to 70% - or 90% if residents in Southern regions (Abruzzo, Apulia, Basilicata, Calabria, Campania, Molise, Sardinia and Sicily) - over their taxable income for a period of 5 years (up to 10 years depending on the number of dependent children and the acquisition of residential property).  

  • Investments in innovative companies by legal entities

Legal persons investing in innovative startups and SMEs can benefit from a 30% tax reduction of the IRES (corporate income tax). The investment must be kept for at least 3 years.

  • Investments in innovative companies by natural persons 

Natural persons investing in innovative startups and SMEs can benefit from a 50% tax reduction on the investor’s taxable income for IRPEF (personal income tax). The investment must be kept for at least 3 years.


  • Smart&Start Italia

Smart & Start is the incentive scheme that is aimed at boosting the creation and growth of innovative startups (i.e., hi-tech startups that are subject to a simplified regulation), through the development and/or improvement of innovative technological solutions in Italy.

Eligible expenses must be between € 100 K and € 1.5 MLN. The subsidy consists of an interest-free loan up to 80% of the total investment (10% in the form of a grant in Southern Italy). Funding may rise to 90% if the startup is composed exclusively by women and/or people under 36, or if it includes at least one Ph.D. holder moving to Italy.

  • New Enterprises “Zero Interest Rate”

"Zero Interest Rate" is aimed at supporting new enterprises with benefits granted in the form of a mix of zero-interest rate loans and grants which may cumulatively cover up to 90% of eligible expenses. Targets are micro and small companies established in Italy for no more than 60 months, composed, for more than half (i.e., at least 51%) of members and shares, by 18-35 year old population or by women (no age limit).


  • Development Contract

The Development Contract is the main national incentive scheme for large investment projects (presented also in joint form).

Eligible field of activities are:

  • Industrial manufacturing

  • Environmental protection

  • Food processing

  • Tourism

The minimum investment size is € 20 MLN (€ 7.5 MLN for Food processing) that can be supported up to 75% through grants and/or soft loans, with the highest aid intensities in Southern Italy.

The proposed investment program may include an R&D project connected and functional to the program.



  • Law 181/89

This incentive, managed by Invitalia, aims to increase industrial development and employment growth in areas affected by complex and non-complex industrial crisis (as defined by the Government). It provides funding - grants and loans up to the 75% of the eligible expenses - for investment projects of at least € 1 MLN, presented by companies of all sizes, aimed at:

- revitalizing industrial activities;

- safeguarding employment levels (an increase in the workforce to be completed within 12 months is required);

- attracting new investments;

- environmental redevelopment and restoration.

Projects presented by foreign companies providing a strategic investment of at least € 10 MLN, in compliance with the National Smart Specialization Strategy, can access the Fast Track procedure. This procedure allows foreign companies to shorten the duration of the process and to guarantee ad hoc resources. 

The incentives provided by Law 181/89 operate in specific areas across Italy with different rules and timing for proposal submission. Check the following website to know more: 




  • Innovation Agreement

The Innovation Agreement is the incentive scheme aimed at supporting projects concerning Industrial Research and Experimental Development with eligible costs at least equal to               € 5 MLN for the development of new products, processes, or their improvements.

The intensity of the aid, provided through a flexible mix of grants and soft loans, is 50% for Industrial Research expenses, 25% for Experimental development ones. 

Both percentages are increased in case of partnerships with institutional research bodies: +10% for SMEs and research bodies, +5% for large companies.

  • Italian Green New Deal

The incentive scheme is aimed at projects concerning industrial research, experimental development and – only for SMEs – industrialization activities with eligible costs between           € 3 MLN and € 40 MLN. 

The aid includes a soft loan (60%, associated with a bank loan worth at least 20%) and grants (15% as direct contribution to the expenditure for industrial research, and experimental development). SMEs also benefit from consultancy services related to industrialization activities and a 10% grant as direct contribution for the acquisition of fixed assets related to industrialization activities.

  • R&D for circular economy

The aid supports the transition of economic activities towards a circular economy model, supporting R&D projects aimed at a more efficient and sustainable use of resources. The financial subsidies consist of a soft loan up to 50% of total R&D eligible expenses and a direct contribution to the R&D eligible expenses (up to 20%). 


IPCEI stands for “Important Project of Common European Interest”. It is a multi-country project for state-of-the-art innovation that addresses a market failure in a European context, based on common European interests by bringing together knowledge, expertise, financial resources, and economic actors throughout the Union.