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What is an SME?

What is an SME?

Small and medium-sized enterprises (SMEs) represent 99% of all businesses in the EU. The definition of an SME is important for access to finance and EU support programmes targeted specifically at these enterprises.

What is an SME?

Small and medium-sized enterprises (SMEs) are defined in the EU recommendation 2003/361.

The main factors determining whether an enterprise is an SME are:

  1. staff headcount and
  2. either turnover or balance sheet total.

Company category

Staff headcount

Turnover

or

Balance sheet total

Medium-sized

< 250

≤ € 50 m

≤ € 43 m

Small

< 50

≤ € 10 m

≤ € 10 m

Micro

< 10

≤ € 2 m

≤ € 2 m

These ceilings apply to the figures for individual firms only. A firm that is part of larger group may need to include staff headcount/turnover/balance sheet data from that group too.

For more details:

What help can SMEs get?

There are 2 broad types of potential benefit for an enterprise if it meets the criteria:

  • eligibility for support under many EU business-support programmes targeted specifically at SMEs: research funding, competitiveness and innovation funding and similar national support programmes that could otherwise be banned as unfair government support ("state aid" – see block exemption regulation).
  • fewer requirements or reduced fees for EU administrative compliance.

Monitoring of the implementation of the SME definition

The Commission regularly monitors the implementation of the SME definition. The independent evaluation study carried out in 2012 concluded that there is no need for a major revision of the SME Definition. The final report of the study (1 MB) recommended to clarify the application of certain rules within the existing Recommendation by providing guidance or by updating the 2005 edition of the SME Definition User Guide.

Supporting documents

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