Innovative Startups 2025: new rules, 36-month status and 65% tax relief for investors
January 31, 2025
From 18 December 2024, the rules for innovative startups have changed.
Law 193/2024 requires innovative startups to qualify as SMEs under the European Commission Recommendation 2003/361/EC. This prevents companies controlled by large corporations or industrial groups from being included. The new framework also requires that innovative startups do not have agency or consulting as their main activity, so they remain focused on developing and commercialising high-tech products or services.
The legislation also reduces the time in the special section of the Business Register from 60 to 36 months (which enables access to incentives), with a 24-month extension if at least one of the following conditions is met:
a) R&D expenditure increased to 25% of costs or production value;
b) at least one pilot/sandbox contract with a public administration;
c) growth in operating revenues or employment above 50% from year 2 to year 3;
d) creation of an equity reserve > €50,000 via a convertible financing or a capital increase with share premium leading to a non-controlling stake by a professional investor, certified incubator or accelerator, regulated investor, business angel, or via equity crowdfunding on an authorised platform, and R&D at ≥ 20%;
e) at least one patent.
The overall five-year period in the special section may be extended by additional two-year periods, up to four extra years in total, for the scale-up phase, if at least one of the following applies:
a) capital increase with share premium by a collective investment undertaking > €1 million for each extension period;
b) operating revenues increase > 100% year-on-year.
On incentives, tax benefits for investments in innovative startups apply as long as the company remains registered in the special section. Law 193 also introduced two exclusion conditions:
- the investment results in a qualified stake > 25% of share capital or governance rights;
- the taxpayer provides services to the startup generating turnover > 25% of the eligible investment.
From 1 January 2025, the IRPEF tax credit (de minimis regime) for investments in innovative startups rises to 65%, but only for the first three years (i.e., up to the third year of registration, not for any extensions).
The ordinary 30% IRPEF deduction remains available for investments in innovative startups that do not benefit from the de minimis 65%; this 30% deduction is available for up to five years from the date of registration in the special section.
Both the 65% and 30% deductions do not apply if the investment leads to a qualified stake > 25% of share capital or governance rights, or if the taxpayer also supplies services to the startup (directly or via a controlled/affiliated entity) for turnover > 25% of the eligible investment.
What to do now:
- check eligibility and design a 36→60 months roadmap;
- set R&D and capital plans;
- align governance and shareholders’ agreements with planned investments.
