(Finance) – Entrepreneurs interested in listing their companies on the Stock Exchange and operators working on the Borsa Italiana markets seem destined not to know in the short term whether the tax credit on listing costs. According to press rumors, the measure may not find space in the budget bill that will go to the council of ministers and therefore the hopes of the market would be entrusted to parliamentary amendments.
The scenery appears similar to what happened last year, when the extension only arrived at the end of December. Furthermore, for 2022 the tax credit for consultancy costs relating to the listing of small and medium-sized enterprises (SMEs) – established by the 2018 budget law – was reduced to the maximum amount of 200,000 euros from the previous 500,000 thousand euros. The measure provides that SMEs that decide to be listed on a regulated market or in multilateral trading systems can take advantage of a tax credit equal to 50% of consultancy fees incurred, with a fixed maximum limit.
The costs that a company that intends to face the listing process incurs depend on the corporate complexity and the standing of the market. According to Deloitte’s Capital Market team, the main ones are: costs of legal related to contractual aspects (including those relating to the preparation of the Information Prospectus and the Admission Document); costs of Sponsors; cost of auditing firm and/or other consultants; contributions and rights paid to Consob it’s at Italian stock exchange; expenses of marketing, presentation to institutional investors and expenses for press communications. In addition to the fixed costs, there are the costs of placing the shares carried out by the brokers who assist the company, generally calculated as a percentage of the capital raised.
Since its introduction in 2018, the IPO Bonus has represented a strong incentive for listing on the Euronext Growth Milan (EGM) market, the segment of Borsa Italiana dedicated to SMEs with high growth potential. In years when delistings have increased, the strong flow of new companies on EGM has helped Piazza Affari remain competitive. The tax incentive on listing costs in the four-year period of application 2018-2021 has favored over 90 IPOs with a overall use of the measure by SMEs of around 40 million euroaccording to IR Top Consulting’s Euronext Growth Milan Observatory.
There capitalization total market share of Euronext Growth Milan, as at 30 September 2022, was almost 10 billion euro (down compared to over 11.5 billion at the end of 2021 due to price reductions) and the segment is made up of 183 societyincluding 5 from the professional segment, according to CFO SIM’s EGM report.
The number of IPOs and the average size of deals has increased significantly over the years, peaking in 2021 when 44 new companies were listed on Euronext Growth Milan (including 2 as SPACs) raising €843m in proceeds (€485m excluding SPACs). Looking at IPOs, companies currently listed on Euronext Growth Milan have raised an average of €14.2m (the median is €5m).
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