Italian innovative startup requirements: a 2026 guide for foreign founders
Italy's startup status can cut your running costs and open public funding, provided your company fits rules that changed in December 2024.
Can a foreign founder set up an Italian innovative startup?
Yes. The law looks at the company, not at the passport of the people behind it. The company must be resident in Italy, or in another EU or EEA country with a production site or branch in Italy. A German GmbH with a Milan branch can, in principle, qualify, as can a new Italian company owned entirely by founders from abroad.
Founders from outside the EU need the right to live and work in Italy. The ministry runs two fast-track routes: Italia Startup Visa, a simplified self-employment visa for people who want to launch an innovative startup, and Italia Startup Hub, for non-EU citizens already living in Italy on another permit, such as a student permit. Startup Visa has been suspended for Russian and Belarusian citizens since 27 October 2023.
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What are the requirements for an innovative startup in Italy?
Eight conditions must all be true at once, plus at least one of the innovation tests in the next section. They sit in article 25 of Decree-Law 179/2012, Italy's Startup Act, as amended by Law 193/2024 from 18 December 2024.
| Condition | What the law says | What it means for you |
|---|---|---|
| Legal form | A limited company (SRL, SPA) or cooperative whose shares are not listed | A sole trader or a partnership cannot qualify |
| Size | An SME under EU Recommendation 2003/361/EC | Partner and linked companies count; a startup controlled by a large group is out |
| Age | Incorporated no more than 60 months ago | The clock starts at incorporation, not at registration |
| Seat | Resident in Italy, or in the EU/EEA with a production site or branch in Italy | A foreign EU company can apply through its Italian branch |
| Production value | From year two, no more than €5 million a year (last approved accounts) | No cap in the first year |
| Profits | Does not distribute and has never distributed profits | A single dividend breaks the condition |
| Business purpose | Exclusively or mainly innovative, high-tech products or services; not mainly agency or consultancy | Articles, activity code and real revenue must tell the same story |
| Origin | Not created by merger, demerger or transfer of a business or business unit | You cannot drop an existing business into the new company |
The size test deserves a closer look if you are backed by a corporate or a family holding. The European Commission's SME definition caps a medium-sized enterprise at fewer than 250 staff and either €50 million turnover or €43 million balance sheet, and a firm inside a larger group may have to count the group's figures. The ministry's July 2025 circular adds that partner companies count too, and that startups linked to or controlled by large enterprises are not eligible.
Which innovation test should you aim for?
You need one of three. Pick the one you can prove with documents, not the one that sounds best:
- R&D spend of at least 15% of the higher of total costs or total production value, shown in the accounts.
- A qualified team: at least a third of the workforce with or studying for a PhD, or researchers (including graduates with three years of certified research), or at least two thirds holding a master's degree.
- Intellectual property: owning, filing or licensing at least one patent or similar right, or owning registered software, linked to the company's business.
For a software company the third route is often the most practical. Italy keeps a public register for computer programs, run by SIAE, the national copyright society; registration is evidence, until proven otherwise, that the program exists. One nuance from the 2025 circular: when you later ask to stay beyond year three, the IP condition only accepts a patent the company owns. Registered software, utility models and licences do not count at that stage.
Can a consultancy or agency qualify?
Not if consultancy or agency work is the main activity. The ministry's circular of 29 July 2025 defines consultancy as professional advice and assistance to clients, and excludes, as examples, companies whose main activity code (ATECO, Italy's version of NACE) is 70.2 (management consultancy) or 74.99 (other professional, scientific and technical activities). Agencies are businesses that broker deals for others, including sales agents.
The practical test is what the company sells. Hours of work on clients' projects, however technical, look like consultancy. A product of your own, such as subscription software, a device or a platform, fits. If you plan an Italian entity that mainly bills services to a foreign parent, expect it to be hard to fit.
How long does the status last?
Three years from registration in the special section of the Companies Register, extendable to five if the company meets at least one condition by the end of year three: R&D spend up to 25%; an experimentation contract with a public body; revenue or headcount up more than 50% from year two to year three; a capital reserve above €50,000 from a convertible loan or a premium share issue to a qualified investor (an accelerator, a professional investor, a business angel or equity crowdfunding) plus R&D at 20%; or a patent the company owns. Scale-ups can then extend in two-year steps with a fund investing more than €1 million or revenue growing over 100% a year.
How do you register an innovative startup in Italy?
From incorporation to the special section
Incorporate with an Italian notary
The online route with a standard template and digital signatures was struck down by the Council of State (judgment 2643/2021) and suspended by the Companies Register on 30 March 2021. A notarial deed is required. The full bill is in our guide to what it costs to set up a startup in Italy.
Get a digital signature and a certified email address
Italian companies must give the Register a digital domicile, in practice a PEC (certified email) address, and the application for the special section can only be signed digitally by the legal representative.
File the self-certification
The legal representative declares that every condition is met, describes the main activity and names the innovation test. The status rests on this declaration, which the Chamber of Commerce checks.
Publish your company profile
Activity and R&D spend, shareholders, the team's qualifications, links with incubators, investors and universities, patents and software. Update it at least every six months, and link to it from your website's home page, as art. 25(11) requires.
Confirm every year
Within 30 days of approving the annual accounts, and no later than six months after year end, file the declaration that the conditions still hold. Missing it counts as losing them.
What does the status actually give you?
- Lower admin costs: no stamp duty or filing fees at the Companies Register and no annual Chamber of Commerce fee while registered, up to the fifth year (art. 26(8)).
- Flexible equity: even an SRL can create classes of shares with different rights, offer them through crowdfunding portals and grant them to staff, advisers and suppliers, which is how paying developers with equity works in Italy.
- Breathing room on losses: more time to absorb losses above a third of share capital.
- Dedicated funding: simplified access to the SME Guarantee Fund and eligibility for Smart&Start Italia, the interest-free loan reserved for innovative startups.
- Hiring and failure: more flexible employment contracts and streamlined procedures if the company does not make it.
When the status ends, the company simply stays on the ordinary register. If it qualifies, it can move to the innovative SME section, which has no age limit; we compare the two in innovative startup vs innovative SME in Italy.
Frequently asked questions
Can the Italian subsidiary of my foreign company be an innovative startup?
Only if the whole group still counts as an SME under the EU definition and the subsidiary meets every other condition. The July 2025 circular says startups linked to or controlled by large enterprises are not eligible, so a corporate spin-out from a big group will not qualify.
Can an innovative startup pay dividends?
No. The company must never have distributed profits while it holds the status. Profits stay in the business; a single distribution breaks one of the conditions.
Is there a minimum share capital?
The Startup Act sets none, so the normal company rules apply. An Italian SRL can be set up with less than €10,000 of capital, paid in cash and in full to the directors.
Can I incorporate online without a notary?
No, not since 2021. The online template was annulled by the Council of State (judgment 2643/2021) and the Companies Register suspended it on 30 March 2021, so you need a notarial deed.
What happens after five years?
The company leaves the startup section unless it qualifies for the scale-up extensions. If it meets the criteria, it can register as an innovative SME, a status with no age limit.
Sources
- MIMIT, Start-up innovative (pagina aggiornata il 18/04/2025) (19 October 2026)
- Normattiva, DL 179/2012, art. 25 (testo vigente, modificato dalla L. 193/2024) (19 October 2026)
- MIMIT, circolare direttoriale del 29 luglio 2025 su iscrizione e mantenimento dello status di start-up innovativa (copia pubblicata dalla Camera di commercio delle Marche) (19 October 2026)
- Normattiva, DL 179/2012, art. 26 (esenzioni e deroghe) (19 October 2026)
- Registro Imprese / InfoCamere, Come costituire una startup innovativa (19 October 2026)
- Camera di commercio di Cagliari-Oristano, Startup e PMI innovative (sospensione del modello standard dal 30/03/2021) (19 October 2026)
- Camera di commercio di Bologna, Start-up innovative 2025 (elaborazione su dati InfoCamere al 29/12/2025) (19 October 2026)
- MIMIT, Programmi per le start-up innovative (Italia Startup Visa e Italia Startup Hub) (19 October 2026)
Figures and definitions checked on the dates shown.
