The European Commission is reviewing the definition of micro, small and medium-sized enterprises (SMEs) established by Recommendation 2003/361/EC of 6 May 2003. For this purpose, the Commission has launched a public survey which will be useful to determine how appropriate the current definition is and to identify options for potential amendments.
The current Recommendation is aimed at creating a level playing field and avoiding distortion of competition between enterprises; ensuring equal treatment of all SMEs; and improving the consistency and effectiveness of SME policies.
Currently there are EU policies providing SMEs with the opportunity to obtain financial support, lower fees and reduced administrative burdens, among others. The SME definition is core to determine whether a company can benefit from these policies and, as it stands to date, is built on three criteria: (i) number of staff; (ii) financial parameters; and, (iii) independence/ownership.
As for criterion (i), in order to qualify as SME, it is compulsory that the company has less than 250 workers in annual full-time equivalent. Regarding criterion (ii), the company must have a turnover equal or lower than EUR 50 million or its balance sheet total shall not exceed EUR 43 million. If one of these limits is exceeded, as long as the other is met, the company can still qualify as SME. Finally, with regard to criterion (iii), the EU SME definition differentiates between autonomous enterprises, those with partner relationships (ownership between 25% and 50%) and enterprises with linked relationships (ownership above 50%). Autonomous enterprises are those which are totally independent and are not linked to any partner or entity. In case a company is not autonomous, the staff number and financial criteria of the linked entities must be added to those of the enterprise.
