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What is a European SME?

EU DEFINITION OF AN SME

AM I AN ENTREPRISE ?

  • According to the definition, an enterprise is ‘any entity engaged in an economic activity, irrespective of its legal form’. An economic activity is usually seen as ‘the sale of products or services at a given price, on a giv- en/direct market’.
  • The category of micro, small and medium-sized enterprises consists of enterprises which:
    • employ fewer than 250 persons; and
    • have either an annual turnover not exceeding EUR 50 million or an annual balance sheet to- tal not exceeding EUR 43 million.

What data do I use?

When making the calculations, you should use the data contained in the last approved annual accounts.
Newly established enterprises that do not yet have approved annual accounts should make a declaration that includes a bona fide estimate (in the form of a business plan) made over the course of the financial year.
This business plan should cover the entire period (financial years) until the entity will generate turnover.

AM I AN AUTONOMOUS ENTREPRISE?

An enterprise is autonomous if:

  • it is totally independent, i.e. it has no participation in other enterprises; and
  • no enterprise has a participation in it or
  • it has a holding of less than 25 % of the capital or voting rights (whichever is higher) in one or more other enterprises; and/or
  • any external parties have a stake of no more than 25 % of the capital or voting rights (whichever is higher) in the enterprise;
  • Or it is not linked to another enterprise through a natural person in the sense of Article 3.3.

AM I A PARTNER ENTREPRISE ?

An enterprise is a partner enterprise if:

  • the enterprise has a holding equal to or greater than 25 % of the capital or voting rights in another enterprise and/or another enterprise has a holding equal to or greater than 25 % in the enterprise in question; and
  • the enterprise is not linked to another enterprise. This means, among other things, that the enterprise’s voting rights in the other enterprise (or vice versa) do not exceed 50 %.

Example of Indirect partners

Situation

My enterprise A is linked to enterprise B through the holding of 60 % that B has in my enterprise. But B also has two partners, enterprises C and D, which respectively own 32 % and 25 % of B.

Calculation

To calculate my data, I must add 100 % of the data of B plus 32 % of the data of C and 25 % of the data of D to the data of my own enterprise.

My total = 100 % of A + 100 % of B + 32 % of C + 25 % of D.