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Small and medium-sized enterprises

Small and medium-sized enterprises

Commission Recommendation 2003/361 defines small and medium-sized enterprises (SMEs) as companies whose staff numbers and economic weight fall below certain limits.

  • A medium-sized company has up to 250 employees, a turnover of up to €50 million and a balance sheet total of up to €43 million;
  • A small company has up to 50 employees and a turnover or balance sheet total of up to €10 million;
  • A micro-company has up to 10 employees and a turnover or balance sheet total of up to €2 million.

There are over 23 million SMEs in the European Union (EU), accounting for 99% of businesses and two out of every three private sector jobs. They are a key driver of the economy.

The EU encourages the use of this definition of SMEs as a reference, including by the EU Member States. Furthermore, it is binding only for certain matters such as State aid and the implementation of structural funds or other EU programmes.

There are various EU programmes supporting work on SME-related issues, in particular the single market programme.

The general aims of the EU single market programme (2021–2027) include improving the functioning of the internal market, notably to protect and empower the public, consumers and businesses, especially SMEs.

  • Within this programme, there is a specific budget (€1 billion) available for projects and activities related to SMEs. The main objective is to help tackle the key challenges these businesses are facing in terms of competitiveness and sustainability. Activities supported under the SME component of this programme also focus on goals such as promoting entrepreneurship, new business opportunities (including access to markets), strengthening the competitiveness of the industrial ecosystems and developing industrial value chains.
  • Projects and activities supported under the SME component of this programme are generally implemented by support providers and other bodies involved in cooperation with SMEs. Some of these projects also provide third-party finance to SMEs involved in designing, testing and implementing solutions or services.
  • The single market programme and its SME component are not an investment programme. Other EU instruments such as InvestEU and the structural funds will provide support for business investments.