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Incentives to stock-exchange listing

17 Jan 2018

Last year, the Italian stock exchange showed a very positive trend, as there were 39 new listed companies, of which 31 were IPO. This is the highest value since 2000, i.e. in the middle of the new economy fever.

Following this increase, the number of listed companies on the Italian stock exchange has reached 339, with a capitalization of 644.3 billion Euros, equal to 37.8% of GDP. Though being still far from other economies in the world, this trend is growing fast.

Individual saving plans

The growth of the Italian stock exchange was also certainly fostered by the so-called “Piani Indivuduali di Risparmio” (individual saving plans), which, against a holding period of at least 5 years, grant individual investors a tax exemption on capital gains.

In brief, individual saving plans provide that at least 70% of collected amounts must be invested in Italian shares or bonds (or in European companies having a permanent establishment in Italy), of which 30% (i.e. 21% of total investments) in small-medium enterprises. 

In order to support individual saving plans as a means for the growth of the Italian economy and a medium-long term saving instrument, the number of listed companies should grow and such companies should be innovative businesses capable of creating value and increasing their share prices over time. Otherwise, individual saving plans would be a mere temporary trend and lead to a speculative bubble.

Due to the characteristics of individual saving plans and of the Italian economy, the main companies that will presumably be listed in the future are SMEs, which are the substance of the Italian economic system.

Tax incentives

Therefore, the tax credit up to € 500,000 provided for SMEs that will achieve the stock-exchange listing in the period 2018-2020 is a great opportunity for such companies. So, hopefully, more and more companies will be listed on the AIM segment (main stock market segment for small and medium enterprises), thus increasing the number of Italian companies represented in the stock exchange.

Simplification of regulation

Moreover, the CONSOB (Italian commission for companies and the stock exchange) has instructed to register the AIM segment as SME Growth Market, which is a particular stock market segment provided for by the European Union to foster the access of SMEs to the capital market through regulatory and procedural special conditions.

 

Together, the abovementioned three elements (individual saving plans, tax incentives for listing and regulatory simplifications) could lead to a more active role of the stock market in Italy, thus helping in resolving the age-old problem of Italian SMEs undercapitalization.

Moreover, being listed on a dynamic segment of the stock market could represent an important chance for SMEs to broaden their presence in international markets.

There are all the conditions to win the challenge: now success is up to entrepreneurs and all those involved in the listing process.

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