(Reuters) - Milan has asked the Rome government for tax breaks on new start-up companies in the area, in a bid to attract fresh investments and maintain its role as Italy's business capital.

Milan's Lombardy region - Italy's richest - has been hard hit by the recession which is crippling the euro zone's third-largest economy.

Corporate bankruptcies have been relatively more frequent here than elsewhere in the country, given the higher number of companies operating in the region.

"The government is asking us to create favorable conditions for new companies that get started in our region," Milan's Councilwoman for Economic Development Cristina Tajani said in a statement.

"The city is doing its part ... We now ask the government to add to our measures some incentives, including on taxes, to turn Milan into a no-tax area for young companies."

The statement said a government decree was expected in July containing measures to help start-up companies.

Cash-strapped Italy is striving to come up with initiatives to prop up its shrinking economy and counter the damaging impact of harsh austerity measures adopted to stave off the threat of contagion from the euro zone's debt crisis.