ITALY Law and Practice Contributed by: Paolo Balboni, Luca Bolognini, Giulio Monga and Carmine Antonio Perri, ICT Legal Consulting
operative form and which must be resident in Italy or in another EU member state, provided they have a production site or branch in Italy. They must meet spe- cific statutory requirements and have as their exclu- sive or prevalent corporate purpose the development, production and commercialisation of innovative prod- ucts or services of high technological value. The incorporation of a limited liability company ( soci- età a responsabilità limitata or Srl) in Italy is typically finalised within a matter of weeks, subject to the com- pletion of notarial and corporate registry procedures. The minimum share capital is EUR1 for innovative start-ups, making entry relatively easy for entrepre- neurs. 2.2 Type of Entity The Srl is generally regarded as the most practical and cost-effective structure for early-stage companies in Italy. Entrepreneurs are typically advised to incorpo- rate as an Srl because it offers flexibility in govern- ance, limited personal liability, and lower incorporation and compliance costs compared to other corporate forms. The Srl structure is particularly attractive for start-ups due to its reduced capital requirements (which can be as low as EUR1 under simplified or innovative start-up regimes), streamlined governance, and eligibility for the special “Start-up Innovative” incentives provided under Italian law (Decree-Law No 179/2012 and subsequent amendments). By contrast, partnerships are less commonly used, as they expose founders to unlimited personal liability, while the SpA ( società per azioni ) – the joint-stock company – is typi- cally reserved for larger ventures or later-stage busi- nesses that require significant capital and more com- plex governance structures. In practice, early-stage investors and advisers generally recommend starting with an Srl, with the option to convert to an SpA at a later growth stage or prior to a major financing or exit event. 2.3 Early-Stage Financing Italy offers a flexible framework for early-stage financ- ing, combining private and public support, while ensuring legal certainty through standardised corpo- rate documentation.
Early-stage financing in Italy is typically provided by a combination of local investors, business angels, fam- ily offices and government-sponsored funds. Foreign investors also participate, particularly in high-growth sectors such as fintech, software, and digital plat- forms. Seed investments are often documented through share subscription agreements or convertible instru- ments, depending on the structure of the investment. In the case of innovative start-ups, simplified pro- cedures under the Start-up Innovative regime allow equity investments to be formalised quickly, often alongside standard corporate documentation such as shareholders’ resolutions and amendments to the Italian start-ups benefit from a mixed ecosystem of domestic and international venture capital (VC), complemented by public co-investment schemes that facilitate early-stage funding. Typical sources of venture capital include domestic VC funds, business angels, and government-backed investment vehicles such as the Italian National Innovation Fund ( Fondo Nazionale Innovazione or FNI), which co-invests along- side private investors to support innovative start-ups. Home-country VC is generally available, particularly for companies in high-growth sectors like fintech, software, and digital technologies, although early- stage rounds often rely on a combination of public and private funding. Foreign VC firms are also active in the Italian market, attracted by promising scale-ups and technology- driven ventures. Investments are typically structured through equity subscriptions or convertible instru- ments, often alongside standard corporate documen- tation under the Start-up Innovative regime. 2.5 Venture Capital Documentation articles of association. 2.4 Venture Capital Italy has developed increasingly standardised practic- es for venture capital documentation, largely aligned with international models. Most VC transactions fol- low documentation inspired by UK and US venture capital standards, including term sheets, investment agreements, shareholders’ agreements, and converti- ble loan notes, ensuring consistency and investor pro-
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