San Marino Innovation: subsidies for technology companies
San Marino Innovation: important concessions for companies with a high technological content
The unfavorable climate for international trade in the last two and a half years, due to pandemics and now also due to war, has unjustly ignored a novelty introduced recently in the nearby Republic of San Marino.
With delegated decree no.101 of 13 June 2019, the State of Titano has launched “Rules for high-tech companies“, In implementation of the previous law n.71 of 23 June 2013 and subsequent amendments. It is precisely provisions aimed at attracting investments aimed at technological innovation in that geographical areaand accompanied by significant tax and labor law incentives, by special protections for investments, as well as by facilitations regarding residence permits and residence permits.
San Marino Innovation: what it is and what it does
The propulsion engine of the new system, which will be briefly illustrated below, is San Marino Innovation spa, the institute for innovation of the Republic of San Marino, directly issued by the state. The sole shareholder of San Marino Innovation spa is in fact the Very Excellent Chamber of the Republic of San Marino, the body which is the head of all the assets of the State.
San Marino Innovation holds a number of important management functions in this new system, the most important of which is the release, to companies that apply to take advantage of the legal benefits, of the indispensable “Certification of the company’s innovative character“. It is granted to start-ups that demonstrate, following a specific investigation, that they have an innovative idea of product, service, process, technology, organization or business model (Article 4).
San Marino Innovation spa also exercises supervisory, regulatory and sanctioning powers towards high-tech companies and controls the permanent over time of the high-tech business requirements, necessary to be able to remain registered in the appropriate register (article 7).
Corporate requirements for admission to beneficiaries
The company that intends to obtain the status of “High-tech company“Must possess some requisites: in addition to the certification by San Marino Innovation Spa, which has already been written about, it must be a maritime law company established in the form of a joint stock company, newly established or established less than 12 months ago and must hold an industrial or service license.
If established as an srl, the company may initially be fully operational even with a merely symbolic share capital: 1 euro minimum. The development of the start-up over time will then entail the need for a progressive adjustment of the minimum amounts.
The incentives
But let’s now review the various others incentivize provided by the Republic of San Marino to attract technologically innovative companies within its territory.
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Fixed-term employment contract and co. co. co. a project
Article 14 of decree no.101 of 2019, in order to support the start-up of companies with a technological content, establishes fixed-term employment contract, with these characteristics: it has a maximum duration of 36 months and can also be part-time; it can be used by first and second level technological start-ups, this in an initial period of time in which the benefits are greater; can be used for up to eight employees.
In addition, the technological start-ups makes use of first and second level possonorsi of relationships coordinated and ongoing project collaborationup to a maximum of four contracts and in a total number of employees.
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Residence and residence permits
The provisions on residence permits and residence permits for employees and administrators of high-tech companies are very significant: much more significant if we consider that San Marino has never been a “wide-ranging” country although, in general , this type of concessions.
A residence permit is granted to those who sign an employment contract within the companies we are doing, lasting one year and renewable annually. However, the foreigner, and therefore also the Italian, who intends to apply for a special residence permit for high-tech companies must document to the country’s authorities the existence of sufficient means for subsistence and adequate accommodation for the entire duration of the stay.
The residence permit can also be extended to the spouse and children.
Directors and shareholders, as well as employees of high-tech companies, can in turn request and obtain the residence in San Marinofor themselves and their families.
- Tax incentives
Income from tier one tech start-ups are exempt from General Income Tax, and tier two tech start-ups and Highly Tech Companies also benefit from very low tax rates for the first five years.
It is also recognized to subjects legal entities residents in the territory of the Republic of San Marino who make contributions in cash or in kind to highly technological companies, a deduction from taxable income to the extent
60% of the contributions in the first level start-ups;
30% towards second-level start-ups;
15% towards Highly Technological Companies.
Similar tax deductions are also allowed to private investors natural persons resident in the Republic of San Marino, if they make similar contributions.
There are also tax exemptions of 100% of the capital gains deriving from the sale of equity investments in companies with a high technological content.
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Work for equity
With a specific contract (work for equity), the companies we have dealt with here can finally assign company shareholdings or choose for the purchase or choice of company shareholdings to directors, employees, contract workers, collaborators, consultants, against the contribution of works or services : these investments do not contribute to the formation of taxable income.
Thanks to Antonio Valentini, Chartered Accountant in the Republic of San Marino for the information.