AIM Italia, an opportunity for SMEs willing step into financial markets
Stefano Quaglia (PKF Studio TCL) analyzes advantages and disadvantages of listing on the Multilateral Trading Facility AIM Italy
Similar to big corporations, SMEs also dream of getting themselves listed on the stock exchange, but they generally lack of necessary standards to proceed with an IPO on the MTA (Mercato Telematico Azionario). Anyway SMEs may adopt a different way to step into the financial markets. A possible solution is the AIM, a Multilateral Trading Facility entirely dedicated to small and medium-sized enterprises, where a lighter listing regulations is in force.
The SMEs with a high growth potential, willing to list on AIM, shall prove: an outstanding business strategy, a balanced financial structure, a sustainable and reliable production plan, and, last but not least a consolidated competitive advantage to guarantee the long term profitability.
Considering the number of requirements to fulfill it is understandable that innovative start-ups are not allowed to carry out an IPO on AIM because the entrepreneurial idea is perfectly outlined, but profits and the business position are still far from being interesting for Institutional Investors.
Financial operators base their investment decisions not only on the financial statement, but they include all parameters necessary to analyze the business capability to generate value over time. So here it comes the need to develop an attractive and compelling equity story to convince the Institutional Investors to finance the company. The equity story represents the key of success to carry out an extraordinary IPO.
The formal admission requirements are: the company's float shall not be lower than 10%, the last financial statement has to be certified by a Statutory Auditor, and at least 5 institutional investors shall be involved in the listing.
An independent financial advisor, such as an investment bank, is necessary to evaluate the feasibility of the project, to test the investors sentiment and to guide the SME through a successful IPO.
Nomad (Nominated Advisor) plays a fundamental role in the listing process. He is responsible for advising and guiding the company on its responsibilities in relation to its admission to AIM as well as its continuing obligations once on market. Nomad regulatory role ensures the company meets its on-going obligations and safeguard the integrity of AIM market.
Listing advantages are many, but the most relevant are: increasing the visibility on local and international markets, the strengthening of the business position towards competitors and a considerable improvement of the bargaining power.
A successful IPO skyrockets the securities value and it provides a larger liquidity for sellers, facilitating the exit for investors that are no longer interested in being shareholders.
The main costs related to IPOs on AIM concern: legal and tax due diligence, the drafting of the Admission Document released by NOMAD, the Comfort Letter provided by the Auditor, listing fees, and there are also variable costs depending on the capital raised. Despite this, the listing process is way easier to access and less expensive than what required by Regulated Markets.
The Law No. 205/2017 grants a tax credit to small and medium-sized enterprises that start an admission to listing. The tax credit is 50% of the consulting costs incurred from 1st January 2018 up to the date the listing has been performed and, in any case, the deadline of the tax credit is 31th December 2020. According to Law No. 205/2017 the maximum value granted is 500.000 Euro.
If initially the market was composed mostly by Green and Digital sectors, in the latest years it took place a massive investments diversification, involving companies belonging to the industrial, services, fashion and food sectors.
According to data provided by the AIM Italia Observatory of IRTop, the number of listed companies tripled compared to 2014; the value of the average capitalization of the companies grew by + 67% compared to 2014, and the average value of the revenues rose from 28 to 43 million euro.
For companies that are not frightened of financial markets, the listing on AIM is an opportunity to evaluate carefully: it could be an interesting stepping-stone towards the success!
PKF Studio TCL - Tax Consulting Legal
Genova – Milano
Water transports: a new VAT regime introduced by Finance Act 2017
The Italian Income Revenue Authority provided resolution no. 50/2018 to clarify taxpayer doubts on the correct VAT regime to apply on urban transports of passengers according to the regulations change introduced by the Finance Act 2017.
The authority stated water transport services are exempt article 10 D.p.r. n. 633/1972 if the service is rendered by water taxy (like gondolas and speedboats) within the municipal territory. Thus all transports of passengers carried out by means different from water taxy category are charged of 5% VAT rate.
Whenever the transport exceed the municipal territory 10% VAT rate is applied, in this case is not relevant the vehicle used to perform the service, but only the distance traveled.