CORPORATE | Stricter requirements regarding innovative startups introduced

Law No. 193 of 16 December 2024 (the “Law”) introduces substantial changes in the startup regulation landscape, with the aim to strengthen startups, stimulate investments in the technology sector, and focus incentives on startups with real growth and innovation potential. The Law requires innovative startups to qualify as small and medium-sized enterprises (in accordance with European Commission Recommendation 2003/361) that do not carry out agency and consulting activities predominantly, in order to exclude subsidiaries of large companies or industrial groups and to ensure the focus on activities related to the development and commercialisation of products or services with high technological value. To promote sustainable and lasting growth, the Law also introduces stricter criteria for remaining registered in the special section of the Companies’ Register, such as the reduction of the “base” period from five to three years, allowing a five-year period only for startups that meet specific requirements. As the accompanying report of the Law points out, it is very likely that the new rules will result in a reduction in the number of companies qualifying as innovative startups and thus enjoying the tax benefits.

Newsletter n. 105 – March 2025