Changes and innovations within the Internationalization Fund.

Changes were published last week under Fund 394/81 for internationalization, which is aimed at SMEs interested in starting expansion activities abroad.

The most significant changes affect the following financing laws:

• Law 133/08, art. 6, paragraph 2, lett. a - Facilitated financing for programs to enter foreign markets;
• Law 133/08, art. 6, paragraph 2, letter b - Subsidized financing for prefeasibility and feasibility studies and technical assistance;
• Law 133/08, Art. 6(2)(c). - Capitalization of exporting companies;
• Law 133/08, art. 6, para. 2, lett. c2 - First participation in fairs and exhibitions.

An analysis of the laws follows, starting with the latter, which stands as the main novelty for Internationalization Fund:

Law 133/08, art. 6, para. 2, lett. c2

This is the new law whose purpose is to finance and incentivize participation in international fairs/exhibitions in non-EU markets. Following are the key points of this legislation:

• Only SMEs with registered offices in Italy, either individually or in aggregate (ATI and Networks), are eligible for funding;
• When submitting the application, the company must provide a self-declaration stating that this is the first participation in a specific fair/exhibition;
• Fairs can only be in non-EU countries;
• The maximum amount that can be financed is €100,000 for each SME or aggregation of SMEs that can be traced back to the same ownership; €300,000 for the aggregation of SMEs that cannot be traced back to the same ownership (€200,000 in the case of two aggregated SMEs and €300,000 in the case of three or more aggregated SMEs);
• Expenses eligible for funding are operating expenses, expenses for promotional activities, and expenses for miscellaneous interventions;
• The financing can cover up to a maximum of 85% of the amount of expenses indicated, and the term of the financing is 4 years including 2 years of grace period; the interest rate, as with other financing laws, is very low (currently at 0.5%).

Law 133/08, art. 6, paragraph 2, lett. a

Business combinations (ATIs and Networks) as expressed previously for funding on international trade fairs are also eligible for the first time for funding from the internationalization fund.

Law 133/08, art. 6, paragraph 2, letter b

The main changes concern the reduction of the amortization period of the financing so that now the financing will be 3 years including 1 year of pre-amortization. Single or aggregate participation is also allowed in this financing.

Law 133/08, Art. 6(2)(c).

This funding, which had been on hold since December 2012 due to lack of funds, has been resubmitted with important changes. They concern:

• the threshold or entry level (the index that refers to the SME's capital strength), which increases from 0.65 to 0.8 for manufacturing firms (1.0 for trade and service firms);
• the amount financed which is capped at €300,000 as opposed to the previous €500,000;
• the admission of only those SMEs that are incorporated as joint stock companies at the time of the loan disbursement and have a foreign turnover of at least 35% of total company turnover (previously it was 20%).

We invite all companies interested in further information and insights on this issue to contact the Octagona team at the following email address: [email protected] or by phone: 059.9770184.

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