Together with reforms Italy has introduced numerous financial incentives aimed at increasing the attractiveness of the country as a FDIs destination, encouraging R&D operations, supporting industrial crisis areas, and fostering the growth of new innovative enterprises.
- Tax credits on assets
Companies investing in tangible and intangible capital goods accordingly to the Industry 4.0 national strategy can benefit from a wide range of tax credits. Companies investing in ordinary tangible assets can benefit from a 6% tax credit.
- Patent Box
The Patent Box is a voluntary fiscal regime with a 5-years validity (freely renewable at the end). It 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
- Industry 4.0 Training
The aid aims at stimulating companies' investments regarding training paths about Industry 4.0 “enabling technologies” (automation, cloud, etc.). It consists of a 40% tax credit for the expenses related to the personnel employed in eligible training activities.
- Employment bonuses
Several bonuses are available for the hiring of people under 35, women, men and women over 50, workers/teachers/researchers residing abroad, etc.
- Fiscal benefits for INPATS
Inpats 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 persons
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 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 signature. 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 80% of the total investment (10 years repayment schedule). The percentage of funding may rise up to 90% if the startup is composed exclusively by women or young people under the age of 36, or if it includes at least one Italian Ph.D. who is working abroad and wants to return 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
people aged between 18 and 35 years or by women (no age limit).
- 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 (companies of any size can benefit from 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
- Automotive fund
Allocation of € 8.7 BLN up to 2030 to boost the green transition, research, and investments in the automotive sector through the establishment of innovative and sustainable supply chains in Italy. In particular, eligible fields of activities are:
- New vehicles, fuel and propulsion systems that increase vehicle efficiency while minimizing emissions;
- Technologies lightening vehicles as well as transport systems for urban mobility;
- New systems, mechanical, electrical, electronic components, and software for managing the main vehicle functions and for advanced driver assistance systems;
- Infrastructure systems for vehicles refueling and recharging.
- 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 to the Fast Track procedure:
- possibility to jump the queue;
- 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: www.invitalia.it
- Innovation Agreement
The Innovation Agreement is aimed at projects concerning industrial research and experimental development activities with eligible costs at least equal to € 5 MLN for the development of
new products, processes or their improvements. The duration of the project must be at least of 18 months and not exceed 36 months.
The aid includes a subsidized loan up to 20% of the eligible costs and expenses, grants of 50% for industrial research and 25% for experimental development.
- 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 to 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.