Investment Incentives

Together with reforms Italy has introduced numerous financial incentives aimed at increasing the attractiveness of foreign direct investments, encouraging research and development and fostering the growth of new innovative enterprises.

Tax Incentives

  • Employement
    • Cut of labor costs for employers hiring people on a permanent basis, with increasing deductions for women. Bonus for employers who hire young workers (under 35 in 2018, under 30 from 2019) equal to the 50% or to the 100% for the South of Italy (max 12 months).*
      * Regulation is currently updating.
  • Energy Efficiency
    • Deductions for taxpayers who invest to improve efficiency of existing building up to the 75%.

Industry 4.0 National Plan

  • Hyper and Super-depreciation
    • Hyper-depreciation: 250% over-valuation of investments in newly purchased or leased tangible assets, devices and technologies enabling the Industry 4.0 transformation.
      Super-depreciation: 130% over-valuation of investments in newly purchased or leased capital goods.
      Companies with access to hyper-depreciation, may benefit of a 140% over-valuation for investments in intangible assets (software and IT systems).
  • "Nuova Sabatini" Law
    • Government grants are available for SMEs that want to buy new machineries, plant or equipment in order to partly cover interest on bank loans relating to the investments made. Companies can also access to the public tool of loan guarantees
  • Guarantee Fund for SMEs
    • The Fund aims to facilitate access to financial sources (loan/grant) for SMEs through the granting of a public guarantee that works alone or together with other collaterals and securities.Thanks to the Fund, companies have the chance to obtain loans without additional guarantees (and therefore no further costs) on the amount guaranteed by the Fund. The Fund does not offer cash contributions.
  • R&D Tax Credit
    • 50% tax credit on R&D incremental expenses incurred in the period 2017-2020 up to max € 20 MLN/year calculated on a fixed basis given by the average of R&D expenses in the period 2012-2014 (highly qualified personnel, lab instrument and equipment, know-how, patents, activities from universities, public research or innovative startups).
  • Patent Box
    • Tax incentive on the income derived from licensing or direct exploitation of intangible assets (patents, know-how, trademarks) consisting in a tax relief up to the 50% for IRES (tax on company revenue) and IRAP (regional tax on productive activity).
       

Startups

  • Smart&Start Italia
    • Smart&Start Italia, managed by Invitalia , supports the creation and growth of innovative startups all over Italy. Projects must include expenses and eligible costs between € 100,000 and € 1.5 MLN. Projects must have a duration not exceeding 24 months, after the contract sign. The aid finances the creation and growth of innovative startups, established for no more than 60 months, that:
      - have a strong technological dimension;
      - operate in the digital economy;
      - enhance research results (spin-offs from research).

      Interest-free loan up to 70% of the total investment. The percentage of funding may rise up to 80% if the startup is composed exclusively by women or young people under the age of 35, or if it includes at least one Italian PhD who is working abroad and wants to return in Italy.
      A non-repayable grant up to 20% of the loan, only for startups based in Basilicata, Calabria, Campania, Puglia, Sardinia, Sicily and in the “Seismic Crater” area of L'Aquila.

      More info at http://www.smartstart.invitalia.it/site/smart/home/eng.html 
  • Innovative startups
    • Italy has been working on a legislation to support an ecosystem of innovative startups with high technological content. Here the main criteria that an innovative startup must meet:
      - new or established for less than 5 years (60 months);
      - HQ in Italy or any EU member, as long as one branch is in Italy;
      - yearly turnover under € 5 MLN;
      - not listed on a regulated market;
      - do not distribute profits;
      - are not the results of a company merger split up and selling off;
      - make a clear character of technological innovation.

      Plus at least one out of the 3 following criteria:
      - 15% of annual costs devoted to R&D;
      - 1/3 of its workforce are PhD students/graduates or researchers, or 2/3 hold a Master's degree;
      - owner, depositary or licensee of a patent, or owner of a registered software.

      Examples of benefits for innovative startups:
      - Smart&Start Italia (financial incentive by Invitalia) ;
      - Italia Startup Visa;
      - Cuts to red tape and fees;
      - Flexible corporate management;
      - Easier to clear systematic losses;
      - Exemption from regulations on dummy companies;
      - Tax options and work for equity schemes;
      - Tax credit for highly-qualified staff.
      http://www.sviluppoeconomico.gov.it/index.php/en/202-news-english/2033818-italy-a-smart-choice-for-innovative
  • Invitalia Ventures
    • Invitalia Ventures manages the first public-private co-investment Fund to support the venture capital industry and innovation in Italy. The company is fully owned by Invitalia.

      Established at the end of 2015 to boost and encourage the development of Tech startups and innovative SMEs, Invitalia Ventures is now positioning as a one of the large early-stage VC operator in Italy.

      Thanks to its powerful investors network, Invitalia Ventures provides not only smart capital but also know how and network to support business development of the Italian startup.

      More info at: http://www.invitaliaventures.it

Large projects

  • Development Contract
    • The Development Contract Program, managed by Invitalia, supports large and innovative investments in manufacturing, tourism and environmental protection for greenfield and expansion projects of more than € 20 MLN (€ 7.5 MLN for food processing) presented by one or more companies also in joint form. It consists of one or more connected and functional projects (R&D projects included). The investment type and company size will define the aid intensity (company of any size can benefit of higher incentives if they invest in Southern Italy).

      The incentives consist of grants and soft loans for an amount up to 75% of the total eligible expenses. The final amount will be the result of the negotiation process managed by Invitalia, the National Agency for Inward Investment and Economic Development.

      Projects presented by foreign companies, providing an investment at least equal to € 50 MLN or more, gain access to the Fast-Track procedure (time shortening evaluation, ad hoc resources, jump of the queue).

      More info at www.invitalia.it

Industrial crisis areas

  • 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 € 1.5 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.

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

R&D projects

  • Innovation Agreements
    • Projects concerning industrial research and experimental development activities (new products, processes or their improvements), with the development of one or more of the following technologies:
      - ICT;
      - Nanotechnologies;
      - Advanced materials;
      - Biotechnology;
      - Advanced manufacturing and processing;
      - Space;
      - Technologies related to the objectives of the "Challenges for society" priority (Horizon 2020 Program).

      R&D projects must include expenses and eligible costs between € 5 MLN and € 40 MLN.

      The incentives consist of grants and soft loans. The final amount will be the result of the negotiation process
  • Smart Fabric, Agrifood, Life Science
    • Projects concerning industrial research and experimental development activities (new products, processes or their improvements), presented by one or more companies in one the following sectors:
      - Smart Factory;
      - Agrifood (farms included);
      - Life Science.

      R&D projects must include expenses and eligible costs between € 5 MLN and € 40 MLN.

      The incentives consist of grants and soft loans. The final amount will be the result of the negotiation process

Case Studies