Law Decree no. 179/2012, converted into Law no. 221/2012, laid down urgent measures for the growth of the Country, including several opportunities on remuneration and incentives of both employees and external service provider for innovative start-up and certified incubators. More specifically, this Decree is aimed to support innovative start-up and certified incubators through the recognition of both tax and social security benefits in favour of employees and external service providers.

The purpose is to create several retention instruments for the management as well as needed to obtain high-quality professional performance to the success of the innovative-business project and that start-up otherwise would not awarded, especially at an early stage, in view of the costs involved.

On March 24^th, 2014 the Technical Secretariat of the Ministry of Economic Development issued a “Guidance on incentive plans for equity” in order to detail the privileged tax treatment offered by national legislation.

Afterwards, on March 10^th, 2015 the Technical Secretariat of the Ministry of Economic Development published a model in support of this Guidance. It clarifies the necessary means to implement the incentive and remuneration plans prescribing allocations of units, shares and financial instruments to the following: employees, collaborators, members of the board, service providers.

The initial steps are the following:
- a shareholder’s resolution empowering the Board to adopt the “Incentive plan for equity”(hereinafter, also, the “Plan”);
- the adoption of the Plan by a BoD resolution.
The objectives, whose aims to reach the plan, are mainly: to encourage employees to take a greater interest in the success of the company, to create a feeling of belonging to the company and sharing common goals, and to encourage a greater alignment of employees’ interests with those of the shareholders. These objectives are to be reached in the mid-long term, in order to encourage economic, financial and capital growth of the company.

The Board is also required to draw up a Plan regulation (hereinafter, also, the “Regulation”), which sets out in more detail the administrative and property rights associated with the financial instruments provided for in the Plan. It shall not be necessary to lodge the regulation at the Chamber of Commerce.

The Regulation shall identify the potential beneficiaries of the Plan, dividing them by contractual type and professional profile; it shall also specify the required fulfilment to benefit under the Plan. Signing the application form, prepared by the Board in order to ascertain the existence and maintenance of the subjective requirements, will complete the participation in the Plan and conclude an agreement supplementing the original employment contract. 
The Regulation shall also identify the financial instruments subjected of the Plan, distinguishing among the allocations of shares, quotes, and financial instruments and the one of stock options to purchase shares, quotes and financial instruments in favour of the beneficiaries (employees, directors, continuative collaborators). The assignment of shares or quotes to the employees can be accessed through a free capital increase as well as through a pay capital increase at the price determined by the extraordinary shareholders’ meeting. Furthermore shares or quotes can be acquired and subsequently sold to the beneficiaries.
In the event of allocation of stock options, the beneficiary will have the right to purchase shares, quotes and financial instruments on subsequent occasions, in accordance with the meaning described above. The allocation of stock options, which shall be dealt with by a BoD resolution and a further one by the shareholder’s meeting, is given for free and is not transferrable to any other person.
The Regulation shall also establish the periods following which the beneficiaries acquire the equity instruments. The financial instruments can be effectively enjoyed as of a given date as well as they can be tied to the economic results of the beneficiary or of the company.
Finally, the Regulation shall define the means to outstand the financial instruments in the case of the termination of employment due to a situation for which the employee is not responsible (“good leaver clause”) as well as the cause of cessation of financial instruments accrued or to be accrued in the event of the termination of employment due to a situation attributable to the employee (“bad leaver clause”).

It is also important to consider that the labour income, arising from the exercise of stock options to purchase financial instruments does not contribute towards the beneficiary’s taxable income, for the both purposes of social security and taxation, under the condition that these instruments are not re-purchased by the company as well as by its direct or indirect subsidiaries. In the case of breach, the labour income still excluded from the taxable income will be taxed on the taxable period during which the re-purchase occurred.