1. 58 th UIA Florence Congress 2014 Foreign Investments Commission 30 October 2014 “IS MY COUNTRY ATTRACTIVE FOR FOREIGN INVESTMENTS?” REPORT FOR ITALY Focus on corporate forms by Carlo Mastellone Studio Legale Mastellone, “LegAll ® Firenze” www.studiomastellone.it www.leg-all.it STUDIO LEGALE MASTELLONE FIRENZE MILANO ROMA VERONA

2. Doing business in Italy Low FDI rate (appr. 19 bl $) Some reasons: infrastructure, red tape, limited competition, cost of energy, corruption and organized crime, uncertainty of the legal framework, and inadequate enforcement of property rights and credits. STUDIO LEGALE MASTELLONE FIRENZE MILANO ROMA VERONA

3. Doing business in Italy STUDIO LEGALE MASTELLONE FIRENZE MILANO ROMA VERONA

4. Doing business in Italy STUDIO LEGALE MASTELLONE FIRENZE MILANO ROMA VERONA  Points of strength (INVITALIA): strategic position; innovative clusters; manufacturing industry; market size and international dimension; nature of competitive advantage (unique products and sectors such as fashion, home furnishings, capital goods, aerospace, robotics, pharma and biotech); business culture; cultural heritage; made in italy.

5. Favorable corporate forms for FDI  FDI in Italy may take several forms: a company established in Italy by natural persons or foreign legal persons (S.p.A. vs S.r.l.) foreign company’s secondary registered offices or branch offices one-man enterprises established by a foreign investor foreign company’s representative offices Focus on Innovative Start-ups STUDIO LEGALE MASTELLONE FIRENZE MILANO ROMA VERONA

6. Innovative Start-up  Art. 25, clause 5, of the Law decree 179/2012  Requirements: be a capital company, domiciled in Italy not listed on a regulated market; in operation for no more than 48 months; less than 5 million euros annual turnover; no distribution of profits; engage in technological innovation; not being created from a corporate merger, division or divestment of a company or line of business. STUDIO LEGALE MASTELLONE FIRENZE MILANO ROMA VERONA

7. Innovative Start-up  Meet one of these requirements: devote at least 15% of its expenditure to Research and Development (R&D) activity; have at least one third of its team composed of PhD students or graduates, or of personnel who have been working in research for at least 3 years; alternatively, at least two thirds should hold a master’s degree; be the owner, filer or licensee of a patent, industrial property right, or original software registered with the Italian Society of Authors and Publishers – SIAE. STUDIO LEGALE MASTELLONE FIRENZE MILANO ROMA VERONA

8. Innovative Start-up  Exemptions and benefits: no annual stamp, administrative and registration fees at the Registry of Companies; delay in re-capitalization obligations in case of losses (extension of additional 12 months); public offer and special categories of quota for S.r.l.; Work-for-equity financial instruments; Crowdfunding; Easier access to financing; Exceptions to ordinary insolvency procedures; STUDIO LEGALE MASTELLONE FIRENZE MILANO ROMA VERONA

9. Innovative Start-up  Exemptions and benefits (continued): Special fixed-term labour agreements with a duration of up to 36/48 months; tax incentives: ○ tax credit of 35% of the cost of hired highly-qualified personnel (Ph.D. or employees with a bachelor degree in technical or scientific disciplines); ○ for 2013, 2014 and 2015 deduction from income tax for investment in Innovative start-ups (individuals 19%, 25% if social, max 500k – corporation 20%, 27% if social, max 1.8 ml); special VISA rules for investors. STUDIO LEGALE MASTELLONE FIRENZE MILANO ROMA VERONA