Innovative Startup Status in Italy: The Full Art. 25(2) Eligibility Test
Startup innovativa is a status Italian law lays over an existing capital company, not a company form of its own: a società di capitali (capital company) that clears every one of the eight lettered conditions in Art. 25(2) D.L. 179/2012, plus at least one of three alternative innovation criteria written into letter (h). Checking a company against the current wording matters, because the test changed on 18 December 2024, when Legge 193/2024 added a mandatory SME test and narrowed the innovative-object condition, and any guide written before that date is reading a repealed text. Every figure on this page carries its own article, drawn from the statute directly rather than from a summary of it.
Giulia Mancini, Head of Corporate Formation, Milan. Giulia started out preparing incorporation deeds in a Milan notary practice and has spent twelve years since watching founders assume a status brings automatic tax relief, before checking whether their company actually clears the test behind it. More
Reviewed by Alessandro Ferri, Tax and Accounting Lead. Updated 11 September 2026.
What is a startup innovativa, and is it a separate company type?
Founders meet the term before they meet the statute behind it, and the two do not always line up.
A status layered on an existing company, not a form of its own
Art. 25(2) D.L. 179/2012 opens with a definition: a startup innovativa is a società di capitali, including one formed as a cooperative, whose shares or quotas are not listed on a regulated market or a multilateral trading facility. A company earns the status by meeting conditions layered on an existing legal form, not by adopting a new one. See Company in Italy: italian company types for the comparison across every Italian form.
Which forms can carry the status
An S.r.l., an S.r.l.s., an S.p.A. or a cooperative can each carry the status, provided the company otherwise clears the full test below. None of the four forms is favoured in the statute itself: the status attaches to whichever vehicle meets the conditions, once that vehicle already exists. A company has to register a company in Italy through the ordinary route before it can apply for the special section; the status is never a way of skipping that first step.
What this page does not cover
Five questions sit elsewhere on this site, deliberately. Choosing a company form on the merits belongs to the pillar page just linked, not here. The S.r.l.'s own capital and governance rules, beyond what the startup status changes, have their own guide. The S.r.l.s.'s fixed model constitution has its own page too. The Italia Startup Visa and the Investor Visa procedures, beyond the eligibility test they borrow from this page, are covered on their own pages. And PMI innovativa (innovative SME) and incubatore certificato (certified incubator) are named here only for contrast: neither carries a dedicated page in the current site tree.
Does your company meet every Art. 25(2) condition?
Every condition below has to hold true at once. Miss one, and the company does not qualify, however strongly it clears the others.
The SME test and the age limit
Two conditions set the outer boundary. Letter (a-bis), inserted by the 2024 reform, requires the company to be a micro, small or medium enterprise as defined by EU Recommendation 2003/361/EC of 6 May 2003, a test that did not apply to a startup at all before 18 December 2024. Letter (b) requires the company to be incorporated no more than 60 months ago, measured from the date on the deed rather than from any later amendment to it.
Where the company must be resident
Letter (c) accepts two routes to residence. A company resident in Italy under the TUIR, the income tax consolidation act, qualifies outright. A company resident in an EU or EEA member state qualifies too, provided it holds a production site or a branch in Italy. A holding company with no Italian footprint at all clears neither route.
The turnover ceiling and no profit distribution, ever
Letter (d) caps annual production value at EUR 5,000,000 or below, measured on the last approved balance sheet, and the cap starts to bite only from the company's second year of activity. Letter (e) is stricter than it first sounds: the company must not distribute profit now, and must never have distributed profit at any point since incorporation. A single dividend paid in an early, profitable year closes this door permanently, even where the company stops distributing afterwards.
An innovative object, and the new exclusion of agency or consultancy business
Letter (f) requires the exclusive or prevailing corporate object to be developing, producing and marketing innovative products or services of high technological value. The 2024 reform added a closing clause: the company must not carry on agency or consultancy business as its prevailing activity. A software house that earns most of its revenue from client consulting, rather than from its own product, now fails this letter even where the underlying technology is genuinely innovative.
Not born of a merger, demerger or business transfer
Letter (g) excludes a company formed by a merger, a demerger, or the transfer of a business or a business unit, whatever else the resulting company scores against the rest of the test. Letter (h), the last of the eight, works differently from the rest: it is an alternative rather than a fixed threshold, and the next section develops the three innovation criteria it offers in turn.
Table: the eligibility test at a glance
| Letter | Condition | Threshold / test | Article |
|---|---|---|---|
| a-bis | SME test | Micro, small or medium enterprise per Reco. 2003/361/EC | Art. 25(2)(a-bis), added 2024 |
| b | Age | Incorporated no more than 60 months ago | Art. 25(2)(b) |
| c | Residence | Italy (TUIR), or EU/EEA with an Italian site or branch | Art. 25(2)(c) |
| d | Turnover ceiling | Annual production value at or below EUR 5,000,000, from year two | Art. 25(2)(d) |
| e | Profit distribution | None, ever | Art. 25(2)(e) |
| f | Object | Innovative products or services; agency/consultancy not the prevailing activity | Art. 25(2)(f), amended 2024 |
| g | Origin | Not formed by a merger, demerger or business transfer | Art. 25(2)(g) |
| h | Innovation criterion | At least one of three: R&D 15% or above, qualified workforce, patent or software | Art. 25(2)(h) |
Art. 25 of D.L. 179/2012 carries the full text behind every row above.
Which of the three innovation criteria does your company meet?
Only one of the three has to be met, and each measures innovation a different way: money spent, people employed, or intellectual property owned.
R&D spend of 15% or more
The first criterion is arithmetic: spending on research and development equal to or above 15% of the higher of cost or total production value for the financial year. A company spending less on R&D can still qualify through either of the next two criteria instead.
A qualified workforce: one-third doctoral, or two-thirds with a master's
The second criterion counts people rather than euros. At least one-third of the workforce, whether employees or collaborators of any kind, must hold a doctorate, be pursuing doctoral research, or hold a degree together with at least three years of certified research experience. Alternatively, at least two-thirds of the workforce must hold a master's degree. Either threshold satisfies the criterion on its own.
A patent, or an original computer program
The third criterion looks at what the company owns. Ownership, deposit or licence of at least one industrial or biotechnological patent qualifies, and so does ownership of the rights to an original computer program registered in the company's name. A company needs only one of these three criteria, not all three, to complete the final condition of the test.
Who reformed the eligibility test, and when?
One law changed two of the eight letters and inserted the entire duration ladder in a single article.
Legge 16 December 2024, n. 193, in force from 18 December 2024
Legge 16 dicembre 2024, n. 193, the "Legge annuale per il mercato e la concorrenza 2023," published in Gazzetta Ufficiale n. 295 of 17 December 2024, took effect on 18 December 2024. Its Art. 28, titled "Modifiche alla definizione di start-up innovativa," added the SME test at letter (a-bis), added the agency-and-consultancy exclusion to letter (f), and inserted the duration and extension provisions covered in the next section. See Legge 193/2024 for the full text of Art. 28.
Why an older guide may describe a different test
A source describing the eligibility test without the SME requirement, or without the agency-and-consultancy exclusion, predates 18 December 2024 and is reading the version of Art. 25(2) that Legge 193/2024 replaced. The date is the fastest way to tell a current source from an outdated one, faster than checking any individual figure in it.
How long can a company keep the status?
Duration is not a fixed number: it runs as a ladder, and each rung carries its own condition.
Base period: three years, no extra condition
The first three years in the special section run without any further requirement beyond continuing to meet the Art. 25(2) test itself. No extension application, no additional filing, nothing beyond staying eligible.
Extension to five years total: five alternative conditions
Reaching five years total requires at least one of five conditions under Art. 25(2-bis): R&D spend raised to 25% of the higher of cost or production value; at least one experimentation contract with a public administration; revenue or employment growth above 50% between year two and year three; a capital reserve above EUR 50,000 raised from a qualifying professional investor, incubator, accelerator, business angel or authorised equity-crowdfunding platform, combined with R&D raised to 20%; or the grant of at least one patent during the period.
Scale-up extension: two more conditions, in two-year periods, up to four further years
Beyond five years, Art. 25(2-ter) opens a scale-up route: two-year extension periods, up to four further years in total, on at least one of two conditions. A capital increase with a premium above EUR 1,000,000 per extension period, subscribed by a collective investment undertaking, satisfies it. So does revenue growth above 100% a year.
Registration: base period of 3 years, no extra condition. Extension: up to 5 years total, on at least one of R&D raised to 25%, a public-sector experimentation contract, revenue or employment growth above 50% from year two to year three, a capital reserve above EUR 50,000 combined with R&D raised to 20%, or the grant of at least one patent. Scale-up: two-year extension periods, up to 4 further years, on at least one of a capital increase with premium above EUR 1,000,000 per period, or revenue growth above 100% a year. The five-year span and the four-year span are two separate provisions, Art. 25(2-bis) and (2-ter) D.L. 179/2012: the statute never states a single combined figure of nine years for the two together.
Nine years is arithmetic, not a figure the statute states
Five years plus a further four is this page's own sum of the two spans above, not a number Art. 25 states anywhere as such. Write it, and read it, as "up to a further four years on top of the five," since no single article puts the two together. See Art. 25 of D.L. 179/2012 for the base text both extensions amend.
How do you register, and what do you have to do every year to keep the status?
Nobody approves the status. The company declares it, and the register records the declaration.
Automatic registration in a special section of the Register
Art. 25(8) directs each Chamber of Commerce to keep a dedicated sezione speciale (special section) of the Register of Companies for startups and certified incubators, held at the special register section. Registration into it is automatic on filing, not a discretionary grant: Art. 25(12) states plainly that the startup "è automaticamente iscritta alla sezione speciale del registro." The chamber's own register office, not MIMIT and not the Agenzia delle Entrate, is the counterparty for every filing in this section, from the first registration to the annual confirmation and any later cancellation.
The annual self-certification deadline
Every year, the legal representative has to confirm that the requirements are still met, within 30 days of the balance sheet's approval and in any case within six months of the financial year's end, and file that dichiarazione di mantenimento dei requisiti (declaration of continued eligibility) with the Register of Companies (Art. 25(15)).
Missing the filing counts exactly as losing the status
Art. 25(16) treats the two failures identically: "alla perdita dei requisiti è equiparato il mancato deposito della dichiarazione," a missed filing is equated to an actual loss of the requirements. There is no grace period, and no distinction between forgetting the paperwork and genuinely falling outside the test. A company that files two days late has, in the statute's own eyes, lost the status exactly as if it had exceeded the turnover ceiling.
What happens when the company loses the status?
Losing the status is not the same as losing the company, and the statute is explicit about the difference.
The 60-day cancellation clock
From the moment the requirements are lost, or the annual self-certification is missed, Art. 25(16) gives the register 60 days to cancel the company from the special section, described as cancellazione dalla sezione speciale (cancellation from the special section).
Requirements lost, or self-certification missed, starts a 60-day clock under Art. 25(16), leading to cancellation from the special section. From there, the company continues on the ordinary section of the Register, as an ordinary company: cancellation is not a dissolution. A separate, dashed line, marked "no automatic link," leads instead to PMI innovativa (Art. 4 D.L. 3/2015): a separate, independent test. Nothing in Art. 25 or in Art. 4 D.L. 3/2015 provides for an automatic transition between the two statuses.
The company survives, on the ordinary section of the Register
Cancellation from the special section is not a dissolution. The statute is explicit: the company continues "permanendo l'iscrizione alla sezione ordinaria del registro delle imprese," remaining registered on the register's ordinary section, as an ordinary company under whichever legal form it always had.
No automatic move into PMI innovativa
Nothing in Art. 25 D.L. 179/2012 or in Art. 4 D.L. 3/2015 provides for an automatic transition. A company that wants PMI innovativa status has to qualify against that separate test independently, and register for it as a new, distinct filing, whether or not it was ever a startup innovativa beforehand.
What does the status actually save you? The startup-exclusive benefits
Three benefits are written for the startup by name, and only by name.
Fee exemptions up to year five
Art. 26(8) exempts the startup, and the certified incubator, from imposta di bollo (stamp duty) and diritti di segreteria (secretarial fees) on register filings, and from the diritto annuale (annual chamber fee), for no longer than the fifth year of registration. In figures already confirmed for Italian company filings: the diritto annuale runs EUR 100 at the national base, or EUR 120 with the 20% chamber surcharge; the imposta di bollo on the notarial deed is EUR 156; the diritti di segreteria on registering the deed run EUR 90. All three are exempt while the exemption lasts. See Art. 26 of D.L. 179/2012 for the exemption's own wording and its five-year limit.
An extra financial year to cover a capital loss
An ordinary S.r.l. or S.p.A. that loses more than a third of its capital has to bring the loss back below that third by the end of the following financial year, under Art. 2446(2) or Art. 2482-bis(4) c.c. Art. 26(1) postpones that deadline for a startup innovativa to the second following financial year instead, one extra year to recover.
Exemption from the società-di-comodo surcharge
Companies classed as società di comodo (non-operating, or shell, companies) under Art. 30 L. 724/1994 and Art. 2 D.L. 138/2011 carry an IRES surcharge of 10.5 percentage points. Art. 26(4) exempts a company registered under Art. 25(2) from that regime entirely, for as long as the registration lasts.
Which benefits are a general PMI mechanic, not startup-exclusive?
Three more provisions sit in the same article, Art. 26 of D.L. 179/2012, and much of the advisory market treats them as a startup perk. They are not.
Differentiated quota classes, including non-voting quotas
Art. 26(2) lets the deed of a PMI costituita in forma di società a responsabilità limitata (an SME formed as an S.r.l.) create classes of quota (quota, the S.r.l. equivalent of a share) carrying different rights, departing from the equal-rights default in Art. 2468(2)-(3) c.c. Art. 26(3) goes further: the deed may create classes with no voting rights at all, or with voting rights disproportionate to the quota held, departing from Art. 2479(5) c.c.
Equity crowdfunding access
Art. 26(5) lets quotas in a PMI in S.r.l. form be offered to the public as financial products, through the crowdfunding portals named in Art. 30 of the same decree, departing from the private-placement default in Art. 2468(1) c.c. A separate, general S.r.l. crowdfunding route also exists, under Regulation (EU) 2020/1503, already covered on the S.r.l. page. Both facts stand side by side here; this page does not assert that the two are the same mechanism.
Buy-back of quotas for incentive plans
Art. 26(6) lifts the Art. 2474 c.c. ban on a company dealing in its own quotas, where the operation implements an incentive plan, again for a PMI in S.r.l. form generally rather than for startups by name. A narrower, startup-specific route sits alongside it: Art. 26(7) lets a startup or certified incubator issue instruments carrying property or administrative rights, voting excluded, against a contribution, a provision scoped to the two statuses rather than to PMI companies at large.
Why every startup S.r.l. gets this anyway, and why that is not the same as a startup-only rule
Since the 2024 reform made the SME test mandatory for a startup too (letter a-bis), every qualifying startup S.r.l. is necessarily also a PMI in S.r.l. form, and reaches all three provisions above through that route. But the population of PMI S.r.l.s eligible for these same provisions is far larger than the population of registered startups. Presenting differentiated quotas, crowdfunding access or the buy-back rule as a startup privilege gets the article wrong, even where the underlying conclusion, that a given startup happens to qualify, is entirely correct.
| Benefit | Article | Who actually gets it |
|---|---|---|
| Fee exemption (stamp duty, secretarial fees, annual chamber fee, to year 5) | Art. 26(8) | Startup innovativa and certified incubator only |
| Extended deadline to cover a capital loss | Art. 26(1) | Startup innovativa only |
| Exemption from the società-di-comodo surcharge | Art. 26(4) | Startup innovativa only (Art. 25(2) companies) |
| Differentiated quota classes, including non-voting quotas | Art. 26(2)-(3) | Any PMI in S.r.l. form |
| Equity crowdfunding access through Art. 30 portals | Art. 26(5) | Any PMI in S.r.l. form |
| Buy-back of own quotas for incentive plans | Art. 26(6) | Any PMI in S.r.l. form |
| Financial instruments with property/administrative rights, voting excluded | Art. 26(7) | Startup innovativa and certified incubator specifically |
What tax relief do outside investors get?
The company's own tax position runs on ordinary IRES and IRAP rules. The relief in this section belongs to the person or the company writing the cheque, not to the startup itself.
Individual investors: 30%, capped at EUR 1,000,000 a year
An individual investor subject to IRPEF can deduct 30% of the sum invested in a qualifying startup innovativa, capped at EUR 1,000,000 in any tax year, provided the investment is held for at least three years.
Corporate investors: 30%, capped at EUR 1,800,000 a year
A corporate investor subject to IRES gets the same confirmed 30% rate, capped instead at EUR 1,800,000 a year, on the same three-year minimum holding period.
What forfeits the relief
Selling before the three years are up triggers decadenza dal beneficio (forfeiture of the relief) and repayment of what was deducted. The relief is also lost if the investment produces a stake above 25% of the company's capital, or if the investor supplies services to the company worth more than 25% of the amount invested. The whole scheme, under Art. 29(9), is conditional on European Commission State-aid clearance, which is why this page states 30% and no higher: a rate above that figure for a past tax year could not be confirmed as currently applicable, and publishing one would risk a founder or an investor relying on a relief that may no longer exist. See Art. 29 of D.L. 179/2012 for the caps, the holding period and the anti-abuse conditions in full.
How does startup innovativa compare with PMI innovativa?
The two statuses share a family resemblance and a common source of confusion, but the tests behind them do not overlap as much as the names suggest.
A different, harder-audited test
PMI innovativa, under the PMI innovativa test, Art. 4(1) D.L. 3/2015, asks for SME status and Italian or EU/EEA residence with an Italian site, much like the startup test. But it also requires an audited last balance sheet, certified by a revisore contabile (statutory auditor), a requirement the startup test does not carry at all. It sets no age ceiling, unlike the startup's 60-month limit, and its R&D bar sits at 3%, against the startup's 15%. A company cannot hold both statuses at the same time.
No automatic transition, and only partial shared relief
Art. 4(9) D.L. 3/2015 extends some of the startup's own benefits to PMI innovativa, specifically Artt. 26, 27, 30 commi 6 to 8, and 32 of D.L. 179/2012, but not the whole package. It is a separate status a company has to qualify for on its own merits, never a stage a lapsed startup rolls into automatically, exactly as the previous section on losing the status already made clear.
Which form should carry the status, and how does it connect to a visa?
The status sits on top of a form. Choosing the right one, and knowing which visa borrows this page's own test, closes the guide.
S.r.l., S.r.l.s. or S.p.A.: which vehicle fits
Most founders carrying the status choose an S.r.l.: see what an S.r.l. requires in capital and governance for the underlying form. A simplified S.r.l.s. can work too, provided its fixed deed does not conflict with anything the startup structure needs; see when the simplified S.r.l. is worth using for that comparison. An S.p.A. suits a company already planning outside investment on a larger scale.
Digital incorporation for a startup S.r.l.
A ministerial decree of 17 February 2016 lets an S.r.l. whose exclusive or prevailing object is innovative, high-technology products or services, and which is applying for the special section, sign its deed of incorporation electronically under Art. 24 CAD (digital administration code), departing from the ordinary notarial-deed requirement, provided the official standard model is used. The mechanics of that model sit on the S.r.l. page linked above; this page notes only that the route exists.
The Italy Startup Visa and the Investor Visa
The Italy startup visa is granted for establishing a company that meets exactly the Art. 25(2) test set out on this page. The Italian investor visa names a EUR 250,000 investment in a company registered in the special section as one of its four qualifying thresholds, held for at least two years. Both routes borrow this page's own eligibility test rather than setting a separate one of their own.
Frequently asked questions
What is a startup innovativa under Italian law?
A societa di capitali meeting every one of the eight lettered conditions of Art. 25(2) D.L. 179/2012 at once, plus one of three innovation criteria. It sits on top of an existing company form; it is not a separate legal form.
How old can the company be to qualify?
No more than 60 months from incorporation. This ceiling applies at the point the company applies for the special section, not at any later renewal.
Does the company have to be an SME?
Yes, since 18 December 2024 (Legge 193/2024, Art. 28): a micro, small or medium enterprise as defined by EU Recommendation 2003/361/EC.
Is there a turnover limit?
From the second year of activity, on the last approved balance sheet, total annual production value must not exceed EUR 5,000,000.
Can the company distribute profits and still qualify?
No. The company must not distribute, and must never have distributed, profit at any point since incorporation, for as long as it holds the status.
Can a company formed by a merger or demerger qualify?
No. Art. 25(2)(g) excludes a company formed by a merger, a demerger, or the transfer of a business or business unit, regardless of how the resulting company otherwise scores against the test.
How long can a company stay a startup innovativa?
Three years as a base period, extendable to five, then a further two-year scale-up extension up to four more years, each stage on its own conditions.
Does the status need to be renewed every year?
Yes: an annual self-certification within 30 days of the balance sheet's approval (within 6 months of the FY end); missing it equals losing the status.
What happens when the company loses the status?
Cancellation from the special section within 60 days; the company survives as an ordinary company on the register's ordinary section, it does not automatically become a PMI innovativa.
Does the company automatically become a PMI innovativa afterwards?
No. PMI innovativa is a separate, parallel status under a different decree, with its own test, including an audited last balance sheet. A company must qualify for it independently and register for it as a new filing.
What fees does a registered startup avoid?
Stamp duty, secretarial fees and the annual chamber fee, for up to five years from registration.
Can the S.r.l. have quotas with different voting rights?
Yes, but this derogation from Art. 2468 c.c. is written for any S.r.l. that is a PMI, not for startups exclusively. A startup S.r.l. qualifies because the 2024 reform made the SME test mandatory for it too.
What tax relief do outside investors get?
30% of the sum invested (IRPEF for individuals, IRES for companies), capped at EUR 1,000,000 a year for an individual or EUR 1,800,000 a year for a company, on a three-year minimum holding period.