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Small and medium-sized enterprises (SMEs)

What is an SME?

"SME" stands for small and medium-sized enterprises – as defined in EU law: EU recommendation 2003/361 .

The main factors determining whether a company is an SME are:

  1. number of employees and
  2. either turnover or balance sheet total.

Company category




Balance sheet total


< 250

≤ € 50 m

≤ € 43 m


< 50

≤ € 10 m

≤ € 10 m


< 10

≤ € 2 m

≤ € 2 m

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

For the details of how this works, see:

What help can SMEs get?

There are 2 broad types of potential benefit for a company if it meets the criteria:

  • eligibility for support under many EU business-support programmes targeted specifically at companies of this size: E.g. 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

DG Enterprise and Industry carries out a regular monitoring of the implementation of the SME definition. Building on the results of evaluations performed in 2006 and 2009, an independent study was carried out in 2012, focussing on how the SME Definition works in practice in the implementation phase.
In view of the development of SME demographics since 2003, the disruption that would be caused by any significant change, the policy of ‘less and better targeted state aid’ and the views of a majority of stakeholders, the 2012 study concluded that there is no need for a major revision of the SME Definition at the present time. An eventual update of the Definition to adjust for inflation, labour productivity and changes in the ratio of turnover to balance sheet total is not urgent and may be incorporated into a future revision. Vice-President Tajani agreed with the conclusions of the study that there is no need for a revision of the SME Definition for the time being.

In its recommendations, the study suggested to clarify the application of certain rules within the existing Recommendation, for example by means of further guidance or by updating the current SME Definition User Guide. To this end, an evaluation of the user guide was carried out in 2013-2014. The conclusions and suggestions provided in the final report will be the basis for the revision of the user guide, which should be available in all EU languages by March 2015.



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