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New boost for small businesses - 23/02/2011

Man at a desk using a computer © EU

New proposals are set to lighten the regulatory burden on small businesses, help them rebound from the economic crisis, and encourage new start-ups.

Accounting for 99% of all businesses in Europe and employing more than 90 million people, small businesses are central to the EU's economy. A recent review of EU policy highlights the many benefits they have reaped from the 2008 Small Business Act, which has made it cheaper and easier to start a new company in the EU.

However, the review also shows more can and must be done to encourage entrepreneurship and bolster existing small to medium-sized enterprises (SMEs).

These firms need help to regain the ground lost during the economic crisis, when they shed some 3.25m jobs. Helping them grow and create jobs is crucial to reaching the EU employment target of 75% by 2020, as they employ two-thirds of all private-sector workers.

Problems facing smaller business include: finding financing, coping with administrative requirements and accessing markets in other countries, in the EU and elsewhere. The new proposals include measures to:

  • cut red tape further – creating one-stop centres where small businesses can apply for European, national and local grants, and simplifying accounting and other legal requirements
  • improve access to finance by streamlining procedures and expanding loan guarantee schemes
  • help small businesses reach overseas markets through increased support and free-trade agreements
  • harmonise corporation tax, and make it easier for companies to recover debt in other EU countries
  • promote entrepreneurship and job creation by reducing to one month the time it takes to get licences and permits

The review also proposes better oversight of what EU governments are doing to implement the Small Business Act .

Though governments have made good progress in recent years, they have still to agree on a new law allowing small companies to register as a European Private Company. This new form of company would remove the need for firms to register separately in different EU countries, cutting costs and paperwork.

The Commission calls on governments to pass the law quickly.

EU’s small business portal

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